If you want to "put your money to work," you might have considered buying stocks, bonds or unit trusts to plan for life events. However, with so many online brokerages available, how do you know which one offers the best deal? The average investor without hundreds of thousands of dollars to trade should minimize their trading commission cost, as those can eat into returns quickly. To help you understand what it costs on average to trade stocks online in Singapore, we have prepared the guide below on the average cost of trading stocks. Besides commission, we also assess other important characteristics like international coverage to help you make a better-informed investment decision.
Table of Contents
Average Commission Rate for Trading Stocks Online
In Singapore, there are 13 major brokerages that you can use to trade stocks. Most of them are owned by big financial institutions like DBS, Citi and Standard Chartered, while some are still independent. All of these brokerages have minimum commission per trade, which scales as the size of your trade increases. For instance, many brokers will charge around S$10-S$25 of minimum fee for every trade. However, if your trade is large enough, then the trade commission can scale between 0.08% to 0.18%. Some brokers also change their commission rates based on how much you have in your account. For instance, the average commission rate for trading under $50,000 is 0.24%. However, the average commission rate declines to 0.19% if you're trading amounts between S$50,000-S$100,000 and 0.16% if your trading amounts are S$100,000 and above.
Of note, Tiger Brokers is an online brokerage firm that offers the lowest possible fee on most securities available to a retail investor in Singapore. Below, we have prepared a summary table listing commissions as well as market access of different online trading firms.
|Online Brokerage||Min. Fee||< S$50k||S$50k-S$100k||> $100k|
|City Index (CFD only)||S$10||0.08%||0.08%||0.08%|
|IG (CFD only)||S$15||0.10%||0.10%||0.10%|
|POEMS||No min. commission fee||0.08%||0.08%||0.08%|
|i*Trade||S$25||0.275%||0.22%||0.28%; min $15|
|Maybank Kim Eng||S$25||0.275%||0.22%||0.18%|
|Lim & Tan Securities||S$25||0.28%||0.22%||0.18%|
|Online Brokerage||US Commission & Min. Fee||Japan Commission & Min. Fee||HK Commission & Min. Fee||# Intl. Markets|
|Tiger Brokers||$0.01/trade; min. $1.99||N/A||0.06%; min. HKD 15||4|
|Saxo Markets||0.06%; min. S$4||0.15%; min JPY 1,500||0.15%; min. HKD 90||36|
|City Index (CFD only)||$0.15/share||0.05%||0.15%||26+|
|IG (CFD only)||$0.2/share||0.20%||0.25%||30+|
|Interactive Brokers||$0.0035/share; min. $0.35||0.05%; min. JPY 80||0.08%; min. HKD 1||24|
|Standard Chartered||0.25%; min. $10||0.25%; min. JPY 1,000||0.25%; min. HKD 100||10|
|U Trade||0.275%; min. $19||N/A||0.28%; min. HKD 139||4|
|POEMS||$20 (flat)||0.18%; min. JPY 1,500||0.18%; min. HKD 100||21|
|iOCBC||0.3%; min. $30||0.75%; min. JPY 3,000||0.25%; min. HKD 240||26|
|KGIFraser||0.3%; min. $20||0.5%; min. JPY 1,500||0.275%; min. HKD 100||15|
|i*Trade||0.275%; min. $15||N/A||0.275%; min. HKD 125||6|
|Citibank Brokerage||0.3%; min. $25||N/A||0.3%; min. HKD 120||3|
|DBS Vickers||0.18%; min. $25||0.35%; min. JPY 3,000||0.18%; min. HKD 200||7|
|RHB Securities||0.3%; min. $20||N/A||0.25%; min. HKD 115||7|
|Maybank Kim Eng||0.28%; min. $12.50||0.5%; min. JPY 3,000||0.25%; min. HKD 100||9|
|Lim & Tan Securities||N/A||0.8%; min. S$70||0.18%; min. HKD 100||12|
|TD Ameritrade (thinkorswim)||S$14-S$15(USD10.65) for US stocks, USD10.65 + $0.81 per contract for options|
|FSMOne||0.08%; min. $8.80||N/A||0.08%; min. HKD 50||12|
|Market Average||0.20%; USD $15.73||0.40%; JPY 1,746||0.18%; HKD 100|
Singapore is a relatively small market with only a limited number of options for investors. For instance, the Straits Time Index comprises only 30 companies, while other options like New York Stock Exchange and Hong Kong Stock Exchange offer hundreds and thousands of options. Furthermore, some investors might be more interested in emerging markets like the Philippines, Malaysia and Thailand. If this is the case, you might wish to find an online brokerage that allows you to access international markets at the lowest rates possible.
One example is Saxo Markets, which gives customers access to 26 markets worldwide at low fees ranging from 0.05%-0.15%. Furthermore, their minimum fees you must invest are also lower compared to other online trading platforms. Other brokerages do not carry this variety at such a low price. If you are looking to exclusively trade in the US, however, check out our recommended online brokerages.
Size & Frequency of Your Trades
All in all, commissions matter more for people who tend to trade more frequently with smaller amounts. For instance, let’s consider a hypothetical comparison. Over a course of 1 year, Bob has a portfolio of S$100,000 that he trades once a month, while Jane has a portfolio of S$50,000 that she trades once a week. For simplicity, let’s assume they trade 20% of their portfolio each time they make a transaction.
Since Bob’s trades will be S$20,000 each, he will be paying 0.25% per dollar of transaction, while Jane’s S$10,000 trades will cost her S$25 per transaction (0.25% of S$10,000 is equal to the S$25 of minimum commission). After a whole year, although Bob is running twice as much capital as Jane, Jane will have paid more than double the commission that Bob will have paid. As you can see, this is because Jane is trading every week while Bob only trades once a month. Therefore, you need to consider how much and how often you will be trading before choosing an online broker. For portfolios with large amounts of capital with infrequent trades, commission rates will generally matter much less than they do for portfolios with small amounts with frequent trades.
|AUM (SGD)||Transaction Size||Amount Traded||Commission Rate||Commission Dollars||As % of AUM|
Other Services to Consider
In some cases, an investor may care more about other services like data link, cost of margin financing or borrowing stocks (for shorting), availability of options, etc. In many cases, only certain brokers can provide a great user interface coupled with live data integration. While this may not matter to some, the minute-by-minute data upload may be crucial for some strategies.
Also, if you have a simple strategy with a long-term time horizon, you may only need to care about low trading commission cost. Those who prefer to engage in short-term strategies, or are fairly new to online trading, might want a trading platform with foreign exchange currency trading and futures trading capabilities.
Be sure to do you own research in terms of what kind of strategy you want to employ, and what services will matter most to you. This way, you can focus on picking stocks, bonds or unit trusts that's the most ideal for you instead of worrying about commission costs that will eat into your returns.