Best Online Brokerages and Trading Platforms in Singapore: A 2024 Guide

In the bustling financial hub of Singapore, the array of online brokerage options can seem endless, presenting a challenging landscape for both novice and seasoned investors alike. To streamline this complex decision-making process, we have looked into the finest trading platforms across, helping you dissect the fee structures, global market access, and favorable exchange rates.

The investment world has been profoundly transformed by the unexpected developments of the COVID-19 pandemic, catalyzing a remarkable uptick in market participation. A telling example of this shift can be seen in the notable rise of retail investment globally. In an era marked by unpredictability, individuals across the globe are gravitating towards the stock market, driven by the desire to take control of their financial destinies.

This newfound enthusiasm for investing has resonated deeply within Singapore. Confronted with the realities of inflation and the erosive impact on savings, Singaporeans are increasingly looking towards investments as a means to safeguard and potentially grow their wealth. 

Getting Started with Stock investing in Singapore

It's essential to understand the foundational steps required to get started. Two key components in this process are setting up a brokerage account and a Central Depository (CDP) account. 

What is a Brokerage Account and CDP Account?

• Brokerage Account: This is your gateway to buying and selling stocks, bonds, ETFs, and other securities. A brokerage account is held by a financial institution or brokerage firm, acting as a middleman between you and the stock exchanges. Through this account, you can place trades, monitor your investments, and manage your portfolio according to your financial goals.
• Central Depository (CDP) Account: Specifically unique to Singapore, a CDP account is operated by the Singapore Exchange (SGX) and helps you hold the shares you own. It's essentially a safekeeping account for all the securities you purchase through the local stock market, ensuring that your assets are securely held and accurately recorded.

CDP-linked vs Custodian Account

When you open a brokerage account in Singapore, you'll have to choose between linking it to a CDP account or opting for a custodian account. Understanding the difference between these two is crucial:

CDP-linked Account: 

• The shares you buy are directly registered under your name and stored in your personal CDP account. This direct ownership grants you all the rights associated with the shares, including voting rights in company meetings and receiving dividends directly. 
• A CDP-linked account offers greater transparency and control over your investments.
• However, it also means a higher brokerage fees and higher minimum commission amount.

Custodian Account: 

• The shares you purchase are held by the brokerage firm on your behalf. The shares are registered under the brokerage's name, and the firm acts as a custodian for your investments. While you still own the shares and are entitled to dividends, you may not have the same voting rights as with a CDP-linked account. 
• Custodian accounts often come with lower fees and may provide access to a wider range of international markets compared to CDP-linked accounts.

Choosing between a CDP-linked and custodian account depends on your investment strategy, preferences for control and ownership, and your goals as an investor. Each option has its advantages and considerations, so it's vital to assess your needs and understand these fundamental aspects before embarking on your investment journey in Singapore.

Comparing Best Online Brokerages and Trading Platforms

Before we look into the online brokerages and their fees. It's essential to understand the fees associated with the investment in Singapore stocks.

The only cost component that may vary is the commission fees charged by the brokerage firm we use. It is also the largest cost component when we buy and sell stocks. If we buy stocks listed on overseas exchanges, we may incur different fees associated with our trades.

CDP-linked Online Brokerage Accounts

Traditional brokerages that link directly to a CDP account often apply a commission rate of 0.28% per transaction, subject to a minimum fee of $25. This structure means that the impact of commission fees can significantly affect the returns on smaller trades. For instance, consider making a trade worth $1,000, while the 0.28% commission on such a trade should technically be only $2,80, the minimum fee of $25 is enforced instead. As a result, the actual commission rate on this transaction escalates to 2.5% — effectively tripling the cost to four times the expected rate of 0.28%. 

Some of the online brokerages that offer service include

• CGS-CIMB Securities
• DBS Vickers
• FSMOne
• KGI Securities
• Lim & Tan Securities
• Maybank
• Kim Eng Securities
• OCBC Securities
• Phillip Securities (POEMS)
• RHB Securities
• UOB Kay Hian

 Custodian accounts (based on SG stocks)

 Custodian accounts (based on SG stocks)

Do You Know You Can Also Invest with Wealth Management Platforms like StashAway?

Exploring the best online brokerages in Singapore opens up various investment avenues. StashAway, a distinguished wealth management platform, offers a straightforward, low-fee option for both novice and seasoned investors seeking to diversify their portfolios effortlessly. Why consider Stashaway as another investment option?

Transparent, Low Fees:

Invest with clarity as StashAway charges a competitive management fees of only 0.2% to 0.8% annually., significantly lower than traditional investment channels, with no hidden costs.

Three Distinctive Stashaway General Investing Portfolios:

• General Investing by StashAway: Focuses on maintaining a consistent risk level while optimizing for returns. Designed to outperform in the long term, it occasionally deviates from immediate market trends to ensure risk consistency. The portfolio comprises 7 to 13 underlying funds, strategically selected to balance performance and risk management effectively.

• General Investing Powered by BlackRock®: Managed by BlackRock, one of the world's largest asset managers, this strategy is designed to navigate both the ups and downs of the market, aiming for long-term outperformance. It includes a broad array of 15 to 25 underlying funds, providing extensive market exposure and diversification.

• Responsible Investing (ESG): Allows you to invest for both profit and purpose with a diversified, ESG-focused approach. The portfolio includes 7 to 13 underlying funds, each selected based on strict environmental, social, and governance criteria.

Selecting the Ideal Brokerage Account 

Choosing a brokerage account that aligns with your investment strategy can be a daunting task given the plethora of options available. To navigate this decision, several critical factors need to be weighed.

• Understanding Fees: A significant consideration is the impact of fees on your investment returns. While many brokerage firms enforce a minimum commission fee, it's worth considering larger trades to minimize the proportional impact of these fees on your returns. Additionally, be cautious of offerings that advertise zero-commission trades; they might not account for other hidden charges, such as per-share settlement fees, which can surprisingly escalate costs.
• Promotional Perks: Brokerages frequently offer promotions, including fee waivers or cash rebates, which can enhance your trading experience. Leveraging these promotions for more frequent trading during the promotional period can offer substantial savings.
• Diverse Product Offerings: It's crucial to match your intended investment products with what's available through the brokerage. This includes everything from stocks and bonds to more complex instruments like Contracts for Difference (CFD) and futures.
• Analytical Tools: The quality and range of tools provided can significantly impact your trading effectiveness. Whether you need advanced charting tools, stock screeners, or technical indicators, ensure the brokerage platform supports these functionalities.
• Global Market Access: For investors aiming to diversify internationally, the range of accessible global markets is a key factor. Whether your interest lies in major markets like the U.S., China, and Hong Kong or more niche exchanges, the brokerage should facilitate these investments.
• Platform Usability: The design and responsiveness of the brokerage's platform can greatly affect your trading efficiency, especially for those operating on tighter time frames. A platform's ease of use, speed, and reliability in executing trades are paramount considerations.
• Investment Insights: Many brokerages offer value-added services like investment insights, market analysis, and research reports, which can be instrumental in making informed decisions.
• Experience It First: Utilizing demo accounts offered by brokerages can provide a hands-on way to assess if a platform's interface and features suit your needs without committing real funds.
• More Than Just Fees: While low commission fees are attractive, the "best" brokerage account offers a blend of convenience, tools, and value that aligns with your investment goals. Factors such as access to international markets, user-friendly interfaces, comprehensive analytical tools, and the availability of investment insights should influence your choice.

Ultimately, you're not limited to a single brokerage, and experimenting with multiple platforms could lead to finding the one that best suits your investment style. Taking the time to evaluate these factors can ensure that your chosen brokerage not only meets your financial objectives but also enhances your investing journey.