How to Choose an Online Stock Broker in Singapore: The 5 Key Factors

How to Choose an Online Stock Broker in Singapore: The 5 Key Factors

Trading can be tricky, especially when it comes to a trading platform. It’s not only the higher commission fees that cause potential profits loss, but it’s also the result of picking the non-user-friendly trading platform.

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So, before deciding which online stock broker you’ll choose, it is crucial to know the five critical factors for consideration.  

1. The Pricing

The trading fees depend on the product, market access, and trading size. It is also part of the costs you will pay to the broker.

When trading, it is crucial to know that the fees should be part of your investment cost. It will also affect the return of investment in the future.

There would be a higher percentage of deduction for every purchase and stock sales when you have higher trading fees.

Fees vary from one stockbroker to another. Also, keep in mind that the prices are not solely for the trading fees, but you also have to pay for taxes, goods, CDP clearing fees, and exchange fees.

Typically, brokers’ commission fee is between S$25 and S$28 for every transaction lower than S$50,000.

You can opt with the SAXO if you want a lower commission rate, but your stocks are in the custodian account rather than the CDP.

2. Stocks Trading Account with a Bank or Brokerages

It’s not new to Singapore to open a stock trading account with a bank or brokerages. Some of the familiar retail investors are Maybank Kim Eng, iOCBC, and DBS Vickers.

Opening a stock trading account with a bank is more convenient since you can quickly transfer funds directly from the bank account to your trading account.

3. The Trading Platform

Most traders are trading by themselves online instead of hiring a broker unless you are too busy to work on your stocks.

In this case, you need a reliable and user-friendly trading platform to let you do the job efficiently.

Moreover, traders love the idea of having a professional platform since it has the essential features and functionalities.

For example, a professional trading platform lets you access historical pricing and various technical indicators.  

However, make sure to request a free trial first before opening an account with your desired platform.

4. Volatile Market Access

Some investors find Singapore’s stock market less inviting because they are too small or less volatile. Brokers have access to Singapore stocks, but they do not typically access other trading markets.

Other product classes you might want to try are the Exchange-traded funds and contracts for difference (CDA).

It is essential to check out the trading platform—whether the broker gives access to different asset classes or not—before signing a contract or creating an account with them.

5. Broker Types

There are different types of brokers. Some online brokers are foreign, international, or local. In Singapore, most brokers are giving complete services to provide all your trading needs.

Singapore’s broker’s jobs are stocks research, account opening at their local offices, platform demos, and broker-assisted trades.

You will get better customer service when you choose a local broker. However, a foreign or international broker comes with a lower fee. One of the disadvantages is the lack of customer service since they live in different time zones. There would be less straight-forward funding of your account.

Before You Decide

Lower trading fees indeed bring benefit in the long run when you are investing regularly. With lots of brokers competing with one another, trading fees offered by them could be competitive.

But it’s not all about the fees alone. Make sure to consider these five critical factors before you choose an online stock broker in Singapore.

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