There are several types of trading account that you can open to trade Singapore stocks. For a start, you'll only need to know the 3 main types. The global, local and custodian accounts.
I have summarised some features and did a comparison of the 3 types of trading account available in Singapore in the table below.
|Account Features & Comparison|
|Product Range||Stocks, Forex, Indices, Commodities||Mainly Stocks||Mainly Stocks|
|Commission||0.1% for stocks CFD||0.28%||0.28%|
|Identity Verification||Notary Public||Face to Face||Notary Public|
|Ownership of shares||No||Yes, in CDP account||Yes, with broker|
1) Global Account
Th global account allows you to trade in multiple assets class such as Stocks, Forex, Indices, Commodities, and Options through CFDs. It offers the lowest commission among the 3 account types and account opening can be done online.
You can open a global account with IG, a listed company on the London Stock Exchange, by following the steps in their account opening page
2) Local Account
Only for the local account would you be opening both a 'securities account' with the Central Depository (CDP) and a trading account with your local broker. In the case of the 'securities account' where your shares are deposited, face to face verification is required to open the account.
The local trading account allows you to buy and sell stocks, and maybe other stock related variants such as unit trusts. Since I left the local brokerage industry back in 2012, I was no longer able to help my website visitors to open a local account with a Singapore broker.
3) Custodian Account
This account works pretty much the same as a local account but the shares are deposited with your broker instead of CDP. Maintenance fee is also payable on a quarterly basis.
Deciding on a stock trading account
While there are many criteria that one should consider when opening a stock trading account in Singapore, I will focus on 2 factors.
1) The purpose of opening the account - trade for capital gain or invest for dividend
2) Residence of account holder
|Recommended Trading Account Base On Purpose & Residence|
|Residence / Purpose||Resident S'porean/ PR||Non-Resident S'porean/ PR||Resident Foreigner||Non-Resident Foreigner|
|Trade for Capital Gain||Global||Global||Global||Global|
|Invest for Dividend||Local||Custodian||Local||Custodian|
The global account is more suitable for people looking to trade for capital gains regardless of your residence while a local account is ideal for people looking to invest for dividends.
A word of caution though. While most people think they want to invest for dividend, my experience with retail investors (through their actions) tell me they are not. Just make sure you have the correct mindset when participating in the stock market.
Opening a stock trading account in Singapore
When I was a licenced trading representative with a local brokerage firm, I was able to assist my website visitors with opening local or custodian accounts. Since I left the brokerage industry in 2012, I was no longer able to do so.
Recently however, I was approached by IG group, a listed company on the London Stock Exchange, to offer its global trading account services in Singapore.
If you are looking to trade for capital gains, you can open a global account with IG by following the steps in the account opening page. As usual, I only recommend trading services that I personally use.
If you have other enquiries on opening a trading account in Singapore, you may wish to contact me via the form below.