Mr Salty had explained in a few posts about basic terms relating to stock trading, how profits from stock trading isn’t simply “sell price minus buy price”, and the rationale why some people invest purely for dividend payouts. Behind all these, there’s a question that needs to be answered: How do we start investing in stocks in Singapore?
For retail stock investors, we have to buy and sell stocks via brokerages. And as also mentioned in the earlier post, administrative fees charged by brokerages affect the eventual profit to be made. In this post, we will break down the brokerage fees and explain what they mean. We will also look at the fees of some brokerages for comparison.
Recap On Administrative Fees
In the post “How to Buy Stocks in Singapore – What Is The Real Profit From Stock Buying?”, we listed down the common items we can find in the administrative fees:
- Minimum Commission Fee (flat amount depending on broker houses)
- Variable Commission (a percentage of Contract Value)
- SGX settlement instruction fees (flat fee of $0.35)
- SGX Trading Fee (0.0075% of Contract Value)
- Clearing Fee (CDP imposed) (0.0325% of Contract Value)
- GST (charged on fees)
At the same time, we explained in Lesson 5 of “How to Buy Stocks in Singapore – What Is The Real Profit From Stock Buying?” that Variable Commissions are tiered. Below a certain amount, we have to pay X% of commission based on Contract Value. As one spends more per transaction, the commission rate changes (usually drops).
The Minimum Commission is actually part of the Variable Commission;; if the Contract Value is so small that the Variable Commission is lower than that of the Minimum Commission, then the Minimum Commission will be applied.
Categories of Administrative Fees
Based on the list above, we can group the fees in various ways.
The first way we can do this is splitting them into Brokerage Fees and Regulator’s Fees.
| Brokerage Fees | Regulator’s Fees |
| – Minimum Commission Fee – Variable Commission | – SGX Settlement Instruction Fees – SGX Trading Fee – Clearing Fee – GST |
We can also group them according to how they are applied:
| Based on Contract Value | Based on Fees | Flat Fees |
| – Variable Commission – SGX Trading Fee – Clearing Fee | – GST | – Minimum Commission Fee – SGX Settlement Instruction Fees |
In the post explaining some basic terms in stock buying, we also explained that Contract Value is Share Price * Number of Shares.
Meaning of The Fees
Minimum Commission and Variable Commission
As explained in Lesson 5 of “How to Buy Stocks in Singapore – What Is The Real Profit From Stock Buying?” that Variable Commissions, regardless of the brokerage, these 2 components are inter-connected. Below a certain amount (between $8,900 to $10,000, depending on brokerage), the Minimum Commission is in play and is independent of the Contract Value. Beyond that said amount, the Variable Commission takes over, and is dependent on the Contract Value.
Regardless of the Contract Value, the brokerage commission makes up the biggest component of the fees,
SGX Settlement Instruction Fees
This is a flat fee, currently at $0.35 per transaction, imposed by SGX. If we look at the table of the brokerage fees below, some brokerage absorbs this fee.
SGX Trading Fee
This is a variable fee, payable to SGX, at 0.0075% of Contract Value. Since it is imposed by SGX, there is no difference in rates between the brokerages.
Clearing Fee
This is a variable fee imposed by CDP, at 0.0325% of Contract Value. Similar to SGX Settlement Instruction Fees and SGX Trading Fee, they are paid to “regulators” and therefore, all brokerages charge the same rates for this component.
GST
The Goods and Services Tax, currently at 7%, is charged on the total of all the fees listed above. So, yes, the Contract Value is not charged GST.
List of Some Singapore Brokerage
The list of some of the well known brokerages in Singapore and their corresponding fees can be found in the table below.
| DBS Vickers | OCBC Securities | Phillip Securities | Phillip Securities (Cash Plus Account) | KGI Securities | RHB Securities | UOB Kay Hian | Maybank Kim Eng | Citibank | |
| Minimum Commission: | $25.00 | $25.00 | $25.00 | $8.00 | $25.00 | $25.00 | $25.00 | $25.00 | $28.00 |
| SGD50,000 and below | 0.280% | 0.275% | 0.280% | 0.080% | 0.275% | 0.275% | 0.275% | 0.275% | 0.250% |
| Above SGD50,000 – SGD100,000 | 0.220% | 0.220% | 0.220% | 0.080% | 0.220% | 0.220% | 0.220% | 0.220% | 0.200% |
| Above SGD100,000 | 0.180% | 0.180% | 0.180% | 0.080% | 0.180% | 0.180% | 0.200% | 0.180% | 0.180% |
| SGX settlement instruction fees | $0.00 | $0.35 | $0.35 | $0.35 | $0.00 | $0.35 | $0.35 | $0.35 | $0.00 |
| SGX Trading Fee | 0.0075% | 0.0075% | 0.0075% | 0.0075% | 0.0075% | 0.0075% | 0.0075% | 0.0075% | 0.0075% |
| Clearing Fee | 0.0325% | 0.0325% | 0.0325% | 0.0325% | 0.0325% | 0.0325% | 0.0325% | 0.0325% | 0.0325% |
| GST | 7.00% | 7.00% | 7.00% | 7.00% | 7.00% | 7.00% | 7.00% | 7.00% | 7.00% |
As we can see from the table, the brokerage commissions are almost identical. You will only enjoy better rates if you open special accounts with them (in the case of Phillip Securities) or if you carry out a transaction of $50,000 – $100,000 (in the case of Citibank).
In the end, we can only rely on non-monetary factors to consider which brokerage to use.
User Experience of Singapore Brokerages
Mr Salty himself used Phillip Securities’ POEMS in the early days of stock trading, and moved to DBS Vickers. In terms of user interface, DBS has a modern and visually pleasing one compared to that of POEMS. Yup, looking at POEMS felt like using SAP and Lotus Notes. However, much could have changed in the 10 years since Mr Salty abandoned POEMS.
Mr Salty also stuck with DBS Vickers because he could view the charts of the stocks and compared them side by side. In POEMS, such viewing of charts are under subscription service plans.
In terms of customer service, Mr Salty had no experience with POEMS. This can be inferred that although their free version of POEMS was basic, it gave no trouble at all. When Mr Salty screwed up his transactions while using DBS Vickers, the CSOs were patient and polite. On the other hand, Mr Salty’s friend was very upset with OCBC Securities’ customer service. They were inefficient in linking his CPFIS to his trading account. He could only get through the hotline at night, and when he did, the operator told him the staff would call him in the day. He waited for about a week to receive that follow up call.
Mr Salty is partial when it comes to OCBC. His own experience with OCBC had not been stellar. Their staff came across as not interested in small customers like Mr Salty. DBS has a much friendlier service.
Parting Words
Singapore’s market is so saturated that the brokerages are literally offering identical rates. As a typical oligopoly, they barely differentiated themselves from each other. It is most probable that they make so little money from retail investors like Mr Salty that they are just providing the service just to maintain their presence.
However, beggars can’t be choosers. Retail investors still have to rely on brokerages to start trading stocks in Singapore (and to a more advanced stage, in the overseas stock markets like Hong Kong and US).
Since it is free to set up a trading account with the brokerages, one can simply open an account with a few selected brokerages (like the big ones of DBS Vickers and Phillip Securities) and try their online trading platforms out. From there, based on personal preferences, you can just go with the one that you enjoy using.
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Source of Brokerage Fees
DBS Vickers: https://www.dbs.com.sg/vickers/en/pricing/fee-schedules/singapore-accounts
OCBC Securities: https://portal.iocbc.com/assets/pdf/ospl/ConsolidatedCommissionCharges.pdf
Pillip Securities: https://www.poems.com.sg/products-services/singapore/ KGI Securities: https://www.kgieworld.sg/securities/pricing
RHB Securities: https://equities.rhbinvest.com.sg/faq_general.aspx?info=10 UOB Kay Hian: https://www.utrade.com.sg/home/Faq.html
Maybank Kim Eng: https://www.maybank-ke.com.sg/pricing/pricing-listing/stocks/
Citibank: https://www.citibank.com.sg/gcb/investments/brokerage.htm