I’ve been looking at several brokerages that can allow me to start investing through a lazy portfolio in Singapore, and it seems like these 3 brokerages are the most popular:
- Standard Chartered (or StanChart / SCB)
- Saxo Capital Markets
- Interactive Brokers
I’ve created a spreadsheet of the commission charges that these brokerages charge me on ETFs on the London Stock Exchange (LSE), as follows. Note: Saxo has recently increased its commissions for counters on the LSE from a minimum of GBP8 to GBP25. Also, the currencies in the spreadsheet are NOT EQUAL. Even though the ETFs that I’m looking at are based in USD, Saxo is charging commissions based in GBP. StanChart and IBKR are in USD.
SCB vs Saxo vs IBKR
Conclusion
- Saxo is really expensive.
- If you’re planning on making multiple small trades, then StanChart looks to be the cheapest. Especially since they have no minimums.
- If you’re planning on making bigger trades (above USD3,000 per trade), then Interactive Brokers is going to be MUCH cheaper.
Personally, I have been using Saxo for several months, and they have awesome customer service. Their office is at Raffles Place and anything you need is a phone call away – plus their officers actually follow up on your case. Funding and withdrawal is also same-business-day if you have a HSBC account (Saxo is using HSBC).
However, because I intend to trade more frequently, I decided to setup an Interactive Brokers account, and I’ve been loving them since. Account set up was fast, I can fund the account in SGD and/or USD, and the interface is straight-forward. The best thing is, IBKR has really, really good spot forex rates, unlike what StanChart charges (typically you’ll face around a loss of 1-2% on forex conversion charges).
Thank you Alvin for sharing this information. I understand as a Singaporean investor when we buy stocks in US, do we need to pay tax for capital gain?
My friend told me for Stocks no capital gain tax but for other products there are tax. Like USO (Oil). Is there any place we can get all information? Do we need to pay tax for S&P 500 or DOW or Nasdaq Index? How about ETF in the US Market when trading through InteractiveBrokers.
Appreciate your inputs.
Capital gains tax is not applicable to foreigners. Dividends are taxed by the USA, and are automatically deducted from dividends that you receive (Singapore does not tax this further). Best to seek professional help regarding this though 🙂
Hi Alvin,
When you fund the IB account in SGD, are you using a local Singapore bank for the fund transfer or we need to setup an account with a foreign bank?
How does IB charge for the exchange rates?
Thanks.
You can use a Singapore bank for the transfer. I use my DBS/POSB account to send SGD to IB (local bank account). When the funds are received at my IB account, I can then convert them to whatever currency that I want, at spot forex rates. I can’t stress enough that IB probably has the best forex rates around that you can find.
Hi Alvin,
Where did you find IB’s local bank account details to fund the account? Also, are there any fees DBS or IB charged you for funding your account in SGD?
Have you tried withdrawing SGD back from IB to DBS? Were there any fees in this scenario?
Basically, I am trying to understand if there are any fees for a round-trip funding / withdrawal on either side?
Many thanks for your help.
IIRC, there are no fees for up to one withdrawal a month, but I’m not sure how much they charge for anything above one a month.
They will provide you the details to fund the account in SGD when you select that option in your online panel. IIRC, it’s a Citibank SGD account.
Thnx for sharing such a great information
Hi Alvin,
I am wondering since IB is US brokerage, If trading using US brokerage will those investments or shared hold under US brokerage subject to those estate tax?
Thank you.
As far as I know, only those instruments that are USA-domiciled (such as VT, AAPL, etc) will be subjected to US law (i.e. US estate tax)
Thank you for your sharing. I notice there are IB UK and IB US and IB HK also. Are you currently using the IB US?
I currently is also looking for brokerage and deciding between SC or IB. Can you share a bit of your experience with the IB so far?
Thank you.
I think it’s all linked – but I remember signing up at interactivebrokers.com, and these days when I log in, I get sent to interactivebrokers.com.hk. Same login details though
Alvin, Good post. Thanks to you I am exploring IB using paper trading. I got to know that you cannot trade on SGX though IB if you are a Singaporean. Is that correct? Have you bought/sold any SGX products on IB?
Hi Alvin,
thanks for taking time out to write the post. I am at a similar cross roads, I would like to buy Ireland-domiciled Vanguard ETFs on LSE(S&P 500, VWRD, REITS and a Global Bond Fund), but not sure which brokerage to use.
The standard banks (StanC, Citi) kill you in the forex conversion, so I signed up for Saxo. But Saxo is quite expensive when it comes to LSE brokerage fees for making 1000 SGD trade per ETF and though their forex conversion is cheaper than the banks, it is still 50 bips markup
IB seems the cheapest, but not sure how it is for BoggleHead/passive kind of investing. Most of the online reviews from Singapore seem to be from active single stock traders.
So could you pls. share your experience in using IB for your passive ETF purchases? Did you do any sell off and get the money back to your primary savings account? thanks
Hi Alvin, thanks for sharing! Do you know what’s the forex conversion charges for SAXO capital market?
Great post Alvin! Thanks a lot!
Hi Alvin! Thanks for this sharing. I’m facing some frustrations choosing a good broker and while IB is ideal, I think Singaporeans can’t buy local stocks /etfs right?
Dear Alvin,
SCB doesn’t charge anything for inactivity. However IB does have inactivity charges if I’m not wrong. So only if one is trading regularly, SCB may still be a better option
Investing in US ETFs will be subject to estate tax? how can this be handled?
Hi Alvin, Thanks for the article. Need your advice what would be best broker/platform for the following: US Equities, Singapore Equities, Singapore Corp Bonds, Hong Kong Equities. Thank you for your kind help.
I use Interactive Brokers for US equities and HK equities. They have ETFs too. Stanchart is pretty affordable for Singapore equities, but it depends on your trading volume.
Hi Alvin,
Thanks for the post.
It’ll be good to do a comparison with TD Ameritrade as well.
Hi Alvin,
I am interested to know how you can fund the account in USD?
I am also a Singaporean and have a bank a/c with POSB, but purely SGD account only.
Andy
Open a multi-currency account, like the DBS Multiplier account