Best Online Brokerages in Singapore 2025

Online Brokerage Review 2024

An online brokerage is a platform that allows individuals to buy and sell securities digitally over the internet. Users are able to trade in various securities such as bonds, stocks, ETFs, mutual funds, and many more. Online brokerages serve as a cost-effective option for investing due to their lower fees when compared to traditional brokerage firms. Online brokerages also offer so much more in terms of convenience as it can be accessed anywhere as long as a user has an internet connection.

Why do People Invest Instead of Saving Money?

There are many reasons why people invest:

• Accumulating wealth: Investing gives individuals the opportunity to earn a higher return on their money
• Generating passive income: Certain types of investments such as rental properties and dividend-paying stocks can provide a form of passive income for an individual
• Beating inflation: The reason why saving is not quite an effective way of accumulating wealth is due to the erosion it experiences from inflation.
• Diversifying portfolios: Investing in a wide range of assets can mitigate the risk of all your investments being wiped away due to unforeseen consequences. With the diversification of your portfolio, you will have something to fall back on when one or some fails
• Meeting long-term financial goals: Investments enable users to save for long-term goals such as owning a property, education, retirement, and many more
• High cost of living: Due to the high cost of living in Singapore coupled with low-interest rates, savings might not keep up with inflation. Hence, investment is a good remedy to that.
• Government support: The Singapore government enables and incentivises investments by introducing various schemes such as the Central Providence Fund and the Supplementary Scheme which makes it easier for Singaporeans to invest

Comparison Of The Best Online Brokerages In Singapore 2024

How to Choose the Best Brokerage Firm For You?

Choosing the right online brokerage might prove the difference between success and failure. With plenty of options available in Singapore, it can get a little bit overwhelming when making a choice for the best and most suitable online brokerage for you. Here are some of the key factors to consider when choosing an online brokerage

Brokerage fees

It is important for you to fully understand the types of brokerage fees charged by online brokerages as it may impact your returns. When looking at brokerage fees, ensure that the brokerage charges competitive fees and is also very transparent about all the costs behind it.

User experience of the platform

With the interface of online brokerage being mostly digital, it is ideal that the platform is user-friendly to make your investment experience smooth and hassle-free.

Ease of opening account

The platform should make it easy for a user to open an account providing clear and concise information and prompts for those who are uninitiated.

Type of products you can invest In

An online brokerage need not necessarily have the widest range of products for you to invest in. What it needs instead is the availability of investment products that fit into your investment strategies.

Access to content and educational resources

Since, online brokerages are investment good platforms for beginners, access to content that educates users or provides ways to visualize or track investments is definitely a value-add that will help users make much more informed decisions.

Minimum funding

Some online brokerage firms require a minimum deposit for a user to open an account. Make sure to factor this in case it might impact your investment strategy negatively.

Mobile-friendly trading

Having a mobile-friendly platform means you can trade on the go as long as you have an internet connection

Quality of customer service

The quality of customer service, especially when it comes to accessibility and speed of response will help you alot in your investment experience. With everything being digital, sometimes human interaction is required in order to address issues or bugs happening in the platform.

Online reviews

Online reviews of platforms can give you a picture of the quality of the online brokerage platforms, but of course, you should not only rely on what others have to say and do your own research on top of it.

What are the Different Investment Strategies?

Investors come in all shapes and sizes and most have backgrounds and financial situations that are different from one another. Hence, a certain way of investing might not be applicable to all. A sound investment strategy takes into consideration a lot of factors such as a person's financial situation and risk tolerance. Failing to identify those different factors may set you up for failure and potential loss of funds. So here are some of the different investment strategies out there.

Buy and hold

The Buy and Hold strategy involves buying stocks or other assets and then holding on to them for an extended period of time - which typically lasts for years or even decades without any trading activity for them going on in between. The goal of this strategy is to benefit from potential long-term growth.

Value investing

Value investing involves picking stocks or other assets that are undervalued by the market so an investor can purchase them at a discount with the expectation that the market will eventually recognize the value resulting in an increase in the price hence making a profit.

Growth investing

Growth investing means investing in a portfolio of stocks or assets that are expected to grow rapidly in value in the future and making a profit from that increase.

Income investing

Income investing involves investing in stocks or other assets that generate regular income and these can come from bonds or dividend-paying stocks.

Index investing

Index investing involves investing in assets or stocks that track a market index. These indexes include S%P G500 or STI Index with the goal of achieving returns that are in line with the overall performance of the market.

Momentum investing

Momentum investing focuses on assets that have recently been performing well with the expectation that their performance continues to do so.

Contrarian investing

Contrarian investing looks at stocks or assets that the market currently views unpopular or out of favor which typically means the price of those products is relatively lower. The expectation here is that these stocks or assets will eventually come good and increase in its value.

Hands-off investing

Hands-off investing involves relying on financial advisors or robo-advisors to manage your investment portfolio on an investor's behalf.

Passive investing

Passive investing involves investing in low-cost index funds or ETFs with the goal of trying to achieve steady, long-term returns without having to actively manage your portfolio.

Why Should You Diversify Your Portfolio?

Diversification of a portfolio aims to spread the risk across different groups of assets so that if anything detrimental happens in the market, most or some of your assets you've invested will remain unscathed. An investor in Singapore who diversifies his or her portfolio may have investments in technology as well as real estate, finance, and healthcare.

Diversification not only mitigates risks from market volatility but also may help in improving your returns due to each group of investments having different and separate levers that impact its performance. Diversification of a portfolio is important as Singapore's economy has a strong reliance on global trade and geopolitical events.

Why is it Important to do a Risk Assessment?

Risk assessment is a very important step to carry out when investing and it is recommended that you carry it out when coming up with your investment strategies. As it may mean the difference between being able to achieve your investment goals or losing money due to a misalignment of goals versus your current situation.

• In order to do a risk assessment, things you need to look at are:
• Your age might impact the time horizon of your investments. Older investors might not be able to fully realize the benefit of a long-term investment strategy.
• Your current financial situation can help you identify the leeway you have for absorbing losses and how losses may impact you. Look at your assets, liabilities, expenses, and income - understanding which will enable you to find out how much you can afford to invest and also lose.
• Your investment goals might dictate the amount of money you would like to earn and the time horizon of your investment and also ultimately the number of risks you're allowed or are willing to take.
• Your own personality may also play a role. If you are the type who's comfortable with taking risks, you may want to go for the high-risk high-return way of investing or the opposite if you are quite conservative with regards to taking risks. Of course, do look at other factors to truly understand if your personality aligns with everything else in determining the level of risks you are willing to take versus how much you are allowed to take.

There are risk assessment tools out there to help you determine your risk tolerance or you can also speak to a certified financial advisor.

Types of Investment Brokerage Fees or Costs

Understanding the types of brokerage fees and costs will help you maximize the value you get out of your investments. These fees vary and are dependent on a number of things such as the platform, the type of investments, and the level of services provided. Here are some of the common investment brokerage fees you should be aware of.

Commission fees

Commissions are charged by brokers for executing a trade on behalf of the investors. The number of commission fees usually are charged at a percentage of the total trade value and the percentage varies depending on the brokerage.

Spreads

Spreads are the difference in value between the bid and ask price of a security and it is typically charged on forex trades. The amount can be a fixed or variable amount depending on the brokerage.

Clearing fees

Clearing fees are fees typically charged to investors by brokerage firms in order to clear and settle trades.

Custody fees

Custody fees are charged to the investors for holding and maintaining investor assets such as bonds or stocks. The brokerage usually charges investors Custody fees that are a percentage of the asset value.

Inactivity fees

Inactivity fees are charged to investors by the exchanges if an account remains dormant and no trades have been made after a certain period of time.

Exchange fees

Exchange fees are charged to the investors by the exchange for the use of their trading platform and services and the fees may vary depending on the type of investments and the exchange.

Forex fees

Forex is charged typically for trading in the foreign exchange market. The fee might be inclusive of spreads, commissions, and other charges.

Types of Products Offered by Online Brokerages

The types of products available for investing, such as bonds, commodities, cryptocurrencies, ETFs, and many others, may impact how you invest as each product come with its own set of factors that impact performance. Understanding what each product is and the different factors that impact it may help you get the most value out of your investments if it aligns with your strategy.

Commodities

Commodities are an asset class that refers to raw materials or primary agricultural products that can be traded in the market. Common commodities include wheat, corn, oil, gold, and silver.

Equities

Equities, also commonly known as stocks or shares, represent ownership in a company. This type of investment has the potential for long-term capital appreciation and dividends.

Bonds

Bonds are debt securities that are issued by governments or corporations in order to raise capital. Bonds may provide a steady stream of income via interest payments.

ETFs

ETFs track the performance of a particular stock market index, such as the S&P 500 or the STI in Singapore. Investing in index ETFs may provide investors with access to a diversified portfolio of stocks.

CFDs

Contract for Difference or CFDs is financial derivatives that enable investors to speculate on the price movement of an underlying asset which includes stocks or commodities without actually owning the assets.

Futures

Futures contracts are agreements to trade an underlying asset at a predetermined price and date in the future. This provides investors with the opportunity to carry out speculation on the price movements of commodities or currencies.

Mutual Funds

Mutual funds invest in a diversified portfolio that is not limited to bonds, stocks, and other assets using money pooled from multiple investors. This provides investors with access to a wider range of investments with lower risks attached compared to investing in individual securities.

Certificates of Deposits

Certificates of Deposits are timed deposit accounts offered by banks. What an investor is doing is essentially lending money to the bank for a fixed period of time at an interest rate that is fixed which offers a low-risk investment option with a guaranteed rate of return albeit at lower rates compared to other types of investments.

Difference Between Stocks CFDs and Stocks

CFDs and Stocks are two different ways of investing in the stock market with the main differences being:

• Stocks give ownership of a company while CFds do not
• CFDs allow leverage which may impact profits and losses
• Stocks typically have higher fees attached while CFDs have lower fees but may come with additional costs.
• Stocks are generally understood to be more liquid than CFDs
• CFDs allow investors to engage in short selling which might not be possible with physical stocks.
• Both CFDs and stocks are regulated by MAS but CFDs come with additional regulations in order to protect retail investors from excessive risks.

How to Start Investing with an Online Brokerage?

Check if you are Eligible

Before the actual investing begins, you will have to check if you are eligible to invest in the stock market. In Singapore, you have to be at least 18 years old and you must be able to provide a valid form of identification. You will also have to not be and undischarged bankrupt in order to invest in an online brokerage. Some other documents or information you have to prepare in case it is a requirement would be your bank account balance and your residency status.

Open a CDP account

Next, in order to start buying and selling stocks listed in the Singapore Exchange, you will be required to open a Central Depository (CDP) account. An investor can choose to open an account with a brokerage of choice or directly with CDP.

Pick your investments

After your brokerage and CDP account are created, it is time to start choosing your investments. Things to consider when choosing investments are your investment strategies, investment goals, risk tolerance, investment horizons, and your current financial situation among other things. It is recommended that you do your research on the different types of investments so you fully understand what each investment entails and find out if it aligns with your goals and strategies.

Place your trades

Now that you've picked your investment, it is time to make your trade. In order to do so, you will have to log in to your online brokerage platform and place your order. Ensure that you double-check and understand each and every detail of your trade such as the price and quantity before you submit your trade order. Explore using investment tools that provide real-time market data and analysis to help you make the most informed decisions.

Review and monitor your portfolio

After you have made your trade, it is important that you monitor your portfolio closely and do periodic reviews to determine if you need to adjust your investments or come up with other forward steps to bring out maximum value.

What is a CDP account?

A CDP account is a requirement for investing in the Singapore stock market with an online brokerage. Your CDP account will be the account that holds and transfers securities listed on the SGX. The CDP account effectively makes you the legal owner of the securities you purchased on the SGX as opposed to those that are in custodian accounts. Added benefits of using a DP account are the easy transfer of securities and the automated crediting of dividends and corporate actions.

How Do You Open a CDP Account?

Follow these steps to open a CDP account:

• Step 1: Decide on a brokerage firm
• Step 2: Fill out the application form as accurately as possible. Details you will have to provide include but is not limited to your personal information such as your name, address, and your identification documents.
• Step 3: Submit the application form and await approval
• Step 5: Fund your account in order to being trading. This can be done by transferring funds from your bank account to your brokerage account
• Step 6: Link your brokerage account to your CDP account which allows you to start buying and selling stock on the Singapore Stock Exchange (SGX)

Frequently Asked Questions

What does an investment brokerage firm do?

An investment brokerage firm assists individuals and institutions in the buying and selling (trading) of securities on the financial markets. On top of that, they also have the proper expertise to offer investment advice based on research and analysis. Investors will then be charged fees and/or commissions for the services they engage with the brokerage.

What's the best way for a beginner to invest?

The best way for a beginner to invest in Singapore varies between individuals and it is up to the investor's goals, risk tolerance, and financial situation. However, here are some tips to follow if you are a budding investor:

• Educate yourself on the ins and outs of investing. Read up on subjects such as fees, the different investment types, and strategies. Also, you will have to look internally to understand your financial situation and your tolerance of risks. These will all help you find the right brokerage and products to invest in that aligns with your situation.
• Pick a reputable brokerage company. Look at reviews and identify the pros and cons of using a specific brokerage. Do pay closer attention to reviews that talk about the user experience of the platform so you can have a smooth investment experience.
• Start small so you can get a hang of how each different investment types and strategies work without having to bear heavy risks.
• Diversify your portfolio to mitigate the risk of losing all your investments in one go.
• Seek to advice from real professionals in the field as they might provide a more detailed explanation on topics related to investing in brokerages.

What's the difference between a CDP and a Custodian Account?

A CDP account is used for owning Singapore-listed securities while a Custodian account holds foreign securities. Stocks housed in CDP accounts are legally owned (in their own name) by the investor while in a Custodian account the securities are held in the name of the custodian. CDP accounts also typically charge lower fees than Custodian accounts and on top of that the fees. On the regulations front, CDP accounts are subject to regulations set by MAS in Singapore while Custodians are subject to regulations set by the country where the securities are listed.

Are online brokerages safe?

Online brokerages in Singapore are generally safe as it is regulated by the MAS and it applies security measures in order to protect clients' interests and their funds. Online brokerages in Singapore are also required to provide insurance coverage for clients' assets which adds another layer of security and assurance to its users.

Can you lose money investing in online brokerages?

As with all forms of investments, risks are involved and investments with online brokerages are no exceptions to that rule. Investments with online brokerages are still subjected to market volatility, company-specific risks, interest rate risks, leverage risks, and market volatility. It is recommended an investor do their research to avoid any misalignment and ultimately ensure their investment experience is a positive one.

Can you invest in the US Stock Market?

Yes, online brokerages in Singapore typically allow investors to trade in US stocks and other securities. In order to do so, you will have to open a brokerage account that provides access to the US markets.