What should we look out for when choosing an online brokerage? - Seedly
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Serene Toh

Asked on 04 Oct 2019

What should we look out for when choosing an online brokerage?

I'm looking to invest in some European stocks, which are not covered by SCB which I'm currently using. Was looking at Saxo. It seems relatively safe but fees wise lose out to interactive brokers, which has a less user-friendly platform (according to reviews- https://brokerchooser.com/best-brokers/best-online-brokers)

What would be the key factor for you? Additionally, anyone knows if Saxo & IB have custodian fees & how much?

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If it may help you, although POEMS has a custody charge, idle funds in POEMS account will earn returns in a money market fund, which does help clients offset their custody fee.

As an alternative way to look at it, returns from a good stock will more than pay for the custody fee, so the custody fee helps you to be more critical of what shares to buy.

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Serene Toh
Serene Toh

04 Oct 2019

Thanks. Unfortunately poems don’t have access to the market I’m interested in that leads to this question.
Kishor Bhagwat
Kishor Bhagwat
Level 5. Genius
Answered on 05 Oct 2019

Just do an excel sheet and compare the trading commissions, fixed fees etc for the amounts you plan to invest and trades. Will take 15min to figure out the cheapest.

IBKR has another advantage - really cheap FX conversions. Add that to your sheet too.

IBKR has a PC version, a mobile app and a simpler Web trader option.

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Serene Toh
Serene Toh

07 Oct 2019

Thank You!
Frankie Rappaport
Frankie Rappaport

23 Feb 2020

Yes super idea
Frankie Rappaport
Frankie Rappaport
Top Contributor

Top Contributor (Jul)

Level 9. God of Wisdom
Updated on 23 Feb 2020

Hi, Serene,

I hope, you were successful with your European stocks, though I'd rather recommend ETFs instead of single stocks.

as to the brokers:

  • should give you access to the markets you wish for

-commission fees are generally already so low that they (exception: heavy traders) are in fact neglegible if your single investment sums exceed a certain threshold

-account maintenance fees are maybe more of an issue

-look also for other fees (stock transfers ...)

-you could download and read carefully online the complete fee schedules of the interesting ones

always mentioned are Saxo, Interactive Brokers, TD Ameritrade, Charles Schwab;

for Singapore these should be O.K.:

Standard Chartered, FSMone, POEMS.

I feel the prudent investor does not need much platform technology, the platform should be fast and reliable, you (almost) need only an easy way to enter limit order and "good till ..." selector, year end tax summary would also be nice

bye

more on my thinking:

https://seedly.sg/questions/what-is-your-general-investing-philosophy-strategy​​​

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Frankie Rappaport
Frankie Rappaport

23 Feb 2020

Don't forget to do currency switches/transfers (even within Singapore!) via safe services like Transferwise or Currencyfair, since when your broker or bank does the currency switch (f.ex. SGD to EUR for your european stocks) they charge hefty but 'hidden' fees
Angeline Teo
Angeline Teo, Calculator at The Internet
Level 6. Master
Answered on 04 Oct 2019

Interactive brokers for its low fees, and nope, they have no custodian fees.

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Frankie Rappaport
Frankie Rappaport

23 Feb 2020

Thank You!
Liam Lim Yu Zheng
Liam Lim Yu Zheng

11 Mar 2020

However, IB charges an "equivalent" of the custodian fee, in the form of a "low activity fee". If fewer than 10 trades/mth, you get charged 10usd/mth=120usd/yr. Waived if your account balance exceeds 100k usd. 120/100k=0.12%, which is equal to custodian fees charged by other brokerages....So, this is the "custodian fee" that you're paying https://www.google.com/amp/s/financialhorse.com/stock-brokers/%3famp
Model Investor
Model Investor
Level 3. Wonderkid
Answered on 04 Oct 2019

I would definitely recommend SAXO, if you do not trade often, SAXO is having a referral promotion which you can refer here: https://www.home.saxo/en-sg/accounts/referral. The referral fees are more than enough to cover commission costs and miscellaneous costs for quite a number of trades.

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Serene Toh
Serene Toh

07 Oct 2019

Thank You!
Harvey Tan
Harvey Tan
Level 6. Master
Answered on 04 Oct 2019

Cost and availability of options.

Go with Interactive Brokers. IB has no custodian charges.

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Liam Lim Yu Zheng
Liam Lim Yu Zheng

11 Mar 2020

@serene exactly. Ppl seem to hv the misimpression that there's no custodian fee, yes, but... IB charges an "equivalent" of the custodian fee, in the form of a "low activity fee". If fewer than 10 trades/mth, you get charged 10usd/mth=120usd/yr. Waived if your account balance exceeds 100k usd. 120/100k=0.12%, which is equal to custodian fees charged by other brokerages....So, this is the "custodian fee" that you're paying https://www.google.com/amp/s/financialhorse.com/stock-brokers/%3famp
Liam Lim Yu Zheng
Liam Lim Yu Zheng

11 Mar 2020

If infrequent investment amounts, chk out TD Ameritrade. Also, Low fees too, (truly) no custodian fees, no minimum mthly trades required. If keen, PM me, we can split the referral 😆! Obviously better than applying yourself -.-... (Of course, do ur own due diligence first) https://www.tdameritrade.com.sg/tdaa/index.html#!/whytdaa/commissions
Cedric Jamie Soh
Cedric Jamie Soh, Director at Seniorcare.com.sg
Level 9. God of Wisdom
Updated on 04 Oct 2019

I love interactive brokers

  1. great forex rates (most brokers have a low commission but there is hidden "charges" in the forex rates)

  2. great low fees on many products

  3. a wide range of products

As far as I know, no custodian fees for IB.

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Serene Toh
Serene Toh

04 Oct 2019

Thanks
Aleš Klinger
Aleš Klinger
Level 2. Rookie
Answered on 14 Dec 2019

I don't know about Saxo, but Plus500 features around 2 000 assets, 1500 from which are shares. According to TradingBeasts's review - https://tradingbeasts.com/plus500-review/. It is a solid broker with decent spreads and strong regulatory framework. So you might want to look at this company as well.

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Brian
Brian
Level 4. Prodigy
Answered on 15 Nov 2019

Hi Serene!

There are certain factors you should consider while choosing an online brokerage:

  1. Commission Fees based on the Asset Classes

  2. Account Fees

  3. Minimum amount for account

  4. Trading Styles

The key factor would depend on the amount and the trading styles (the amount and the frequency of investing) that you are adopting. If your trading amount is high, the low costs (margins and currency exchange rate) that Interactive Brokers offer would be an advantage. On the other hand, Saxo's platform offers a great advantage in terms of its user interface.

You can find out more information on the detailed fees for Interactive Brokers here: https://www.stockbrokers.com/review/interactivebrokers/fees-features

https://solutions.kristal.ai/seedlypost

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