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A Comparison of the Three Cheapest Brokerages in Singapore

Stock investors in Singapore are blessed with a wide array of brokers to choose from. Some offer a wider product offering while others provide local presence and useful online tools like portfolio analysis and chart comparisons.

However, as long-term investors, perhaps the most important consideration when choosing a broker is the cost-effectiveness of the platform. Choosing the cheapest brokerage can save us hundreds of dollars each year. This can really add up over a lifetime of investing. As such, I thought it would be useful to compare the cost of three brokers that offer the most competitive rates in Singapore. The contenders are FSMOne, Standard Chartered and Interactive Brokers.

FSMOne

FSMOne, a Singapore based company, only launched its online trading platform last year. However, it is already gaining a reputation for having one of the best and cheapest platforms in the market. They offer trading in the Singapore, Malaysia, Hong Kong and American market.

Their platform charges a minimum fee of S$10 per transaction for a Singapore stock or 0.12%. For the US market, they have a minimum fee of US$8.80 or 0.08%.

Interactive Brokers

Interactive Brokers has perhaps the lowest commission rates in the world. They charge only US$1 per transaction or 0.05% of each transaction.

However, the significant downside to their platform is the activity fee of $10 per month. If you do not exceed $10 in transaction fees each month, Interactive Broker customers will be liable for the activity fee. Unfortunately, Singaporeans are not able to trade Singapore stocks on this platform either, so the platform is only useful if you are looking to invest in foreign stocks.

Standard Chartered

Standard Chartered is the only bank in this list. It offers the most competitive rates among the banks and has multiple branches in Singapore, ensuring that you can easily get customer support if you have a problem. They also have access to a vast array of markets, including Singapore, Malaysia, Hong Kong, the US and some European Markets.

They charge a minimum fee of $10 per trade or 0.2% of the transaction amount. For US trades, the minimum fee is $10.70.

Comparing annual fees

I did a quick comparison to find out which platform is most suitable for my current needs by constructing a simple cost analysis chart.

Standard Chartered’s cost structure is the most suitable for investors who are making fewer and smaller transactions. As the number of transactions increases, FSMOne’s and Interactive Broker’s platform start to become more cost-effective. The savings increase exponentially as the transaction size increase.

The Foolish conclusion

Looking for the cheapest brokerage can save you a large amount over the long term. The more you save, the more money gets filtered down to your investments, compounding the returns over time. If you are currently using a platform that is not cost-optimal, you may wish to change to a different platform to increase your savings.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice.