Singapore is one of the leading financial hubs in the world, and if you stay in Singapore, you have several options for investing in US stocks. You can either buy mutual funds or seek services of some of the best brokers to trade US stocks in Singapore. Buying unit trust is perhaps the easiest way, but you will trade through your local bank; but with brokerage firms, you will have to open an account with the company.
How to trade US stocks in Singapore
To open an account with any of the best brokers to trade US stock in Singapore you will require a central depository account (CDP), which will hold your share. The brokerage account is for trading equities via your broker, and the CDP account will let you hold the stock as the owner. You can easily trade US stock in Singapore or any other international stock’s global depository receipts (GDRs) on the SGX.
If you are planning to trade US stocks in Singapore, you will buy them in a nominee account held by your broker on your behalf. In the US, the equivalent is a Depository Trust & Clearing Corp (DTCC). There are several reliable stock brokers in Singapore that give you access to US stocks. Here are some of the best brokers to trade US stocks in Singapore:
Interactive Brokers is the best trading platform in Singapore when it comes to international market access and commissions. Their commissions are hard to beat as they offer discounts to their active traders as well as charge minimal fees. If you are interested in US stocks, then Interactive Brokers should be your pick because of low charges for non-Singapore stocks.
They use an advanced platform, Traders Workstation (TWS), that employs the most advanced trading tools and algorithms. The platform has an assortment of trading tools and asset-based layouts that will allow you to personalize your interface. The TWS platform is available on mobile and its ideal for experienced and professional traders as it offers in-depth news, risk analysis tools, and technical analysis research.
The only downside with Interactive Brokers is that it does not have a license to operate in Singapore. The Monetary Authority of Singapore does, thus, not regulate it, which means that because of regulatory restrictions, you cannot trade SGX stocks. The brokerage also charges an inactivity fee for inactive accounts. But besides that, the firm has a good reputation with minimal risks. You need a minimum of $10,000.
Saxo Capital Markets
Saxo Markets is another good brokerage firm offering trade of US stocks in Singapore because of its low costs with a combination of vast market access and a great user interface in a single platform. They charge 0.08% commission on stock trades from as low as S$10 for local stocks and $4 for US stocks. This is almost half what other competitors charge. They have an advantage over Interactive Brokers because you can trade stocks listed on SGX. Saxo Markets also provides trading access to around 36 global markets with access to options, commodities, futures, contracts for difference, mutual funds, and forex.
The brokerage charges lower commissions for traders with at least S$50,000 for platinum and S$1 million for VIP account holders. Equally, their FX spreads area among the least beating rivals by huge margins. If you are a platinum or VIP account holder, Saxo will offer you access to a personal relationship manager and commission fees of 15% and 30%, respectively. The downside with Saxo Markets is that if you are someone who will exclusively trade on CDFs or US stocks, some leading online brokerages offer better commission rates.
For professional and expert traders, City Index should be the ideal trading platform for exclusive buying and selling of CFDs. CFDs are margin trading instruments, which means that you will be investing more than you have. Therefore it can increase your losses and profits significantly, and because of this, it is ideal for seasoned professionals.
If you are looking to trade on CFDs, then City Index should be your choice because of its low-cost options. Although other brokerage firms such as Saxo do offer some of the cheapest options, City Index’s offering stands out because of the diverse market access. Its CFD spreads and commission fees are equally competitive compared to those of other competitors. City Index also offers a competitive and robust forex trading platform.
Ameritrade is a good brokerage alternative for wealthy Singaporeans interested in trading US ETFs and US stocks. Their charges are slightly higher with a minimum of $10.65 commission on trades relative to Saxo’s $4 minimum commission to trade US stocks in Singapore. However, Ameritrade offers a flat fee, notwithstanding your trade size or market. Therefore for those who trade in large amounts of more than S$25,000, they can end up having a lower fee with the brokerage.
Standard Chartered has been a leading broker in Singapore for some time when there was no minimum commission trading. They have since moved, and nowadays, they charge a minimum commission of $10 per trade. However, they still have no custodian fee, which is an advantage, although that won’t outweigh other benefits offered by other brokers.
For investors who can hit priority banking status with the bank, this should be an ideal option to consider. If you hold around S$200,000 with them, then this is an attractive alternative because you will receive no minimum commission trading. If you are a priority banking client, then consider trading US stocks through Standard Chartered.
FSMOne is a relatively new broker in Singapore that has been around for two years. It offers attractive fees with a minimum commission of $8.8 and charges no custodian fees. They also charge other charges, such as a dividend handling fee of 1% and $50 for handling corporate action. It is new relative to the rest of the brokers. So in terms of the reputation, it falls short compared to others because it’s yet to be proven. However, if you are looking for low and competitive fees to trade US stocks in Singapore, then you should try this new kid in town.
(By Neha Gupta)
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