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How To Buy US Stocks: A Singaporean's Guide to the Cheapest Brokerages (2022)

profileSudhan P

Do you wish to invest in US stocks but don’t know how to?

Have you been hearing how US stocks can offer higher growth potential than Singapore-listed ones?

If you would like to invest in the US market, let us break down the nuances for you in a simple manner….

… in this one-stop guide to investing in US shares.

Source: Giphy

TL;DR: Cheapest Brokerages to Buy U.S. Stocks (2022)


Before we look at buying shares using the cheapest brokerages available, let’s explore the following topics:

  • The US offers larger exposure in terms of growth than many local stocks. However, there are risks to note too.
  • There are different US indices such as the S&P 500 index, the Dow Jones Industrial Average, and the Nasdaq Composite Index.
  • The US stock market trading hours are from 9.30 am Eastern Time (ET) to 4 pm ET from Monday to Friday (in local time, it’s from 9.30 pm or 10.30 pm till 4 am or 5 am depending on daylight savings).
  • In the US, we can buy one share, unlike in Singapore, and that helps in position sizing.
  • There are additional things to note, such as dividend withholding tax.
  • To help us choose the best US shares, we can make use of stock screeners.

Note that information is accurate as of 29 December 2021. Prices and promotions are subject to change without prior notice.


Why U.S. Stocks?

Just imagine the vast geographical reach companies in the US have against companies in Singapore. 

A quick Google search shows Singapore’s landmass is 721.5 km² while that of the US is 9.834 million km². 

As for population size, Singapore had 5.7 million people while the US had 58 times more people at 332.5 million. 

The US is the third most populous country in the world, behind China and India. 

Those statistics show just how much growth companies in the US have. 

A company starting out in a small area in the US can expand into various cities of the state and then to multiple states in the country. 

There’s just so much growth before the company is “forced” to expand overseas. 

In comparison, a Singapore company can probably expand from one town to another and hit saturation point quickly in our country. 

Expansion overseas brings about its own set of risks. 

As a case in point, let’s explore the stocks of four different food and beverage companies — two from Singapore and two from the US. 

Those companies are Old Chang Kee (SGX: 5ML), Jumbo Group (SGX: 42R), Chipotle Mexican Grill (NYSE: CMG) and Starbucks (NASDAQ: SBUX). 

Over the past five years, the US-originated companies of Chipotle and Starbucks have grown tremendously compared to the local companies of Old Chang Kee and Jumbo. 

Although there are many differences between the companies that drive stock returns, with the vast difference in performance, we can safely attribute geographical reach to be one key difference. 

Source: Yahoo! Finance

Having said that, US stocks do not fit all investor profiles. 

If you are looking for income, Singapore stocks could be the better choice. 

We are not taxed on dividends here compared to buying US dividend stocks (more on taxes later). 

There are also other risks involved with investing in US stocks such as currency risk, which investors should be aware of.  

What Are the Different Indices Available?

As a Singapore investor, you might be familiar with our local stock market benchmark, the Straits Times Index (STI)

Similarly, in the US, there are three major indices, and they are the: 

The S&P 500 index, as the name might suggest, includes 500 of the top US companies in leading industries. 

The Dow Jones Industrial Average is a stock market index tracking 30 large companies listed on two major US’ stock exchanges of New York Stock Exchange (NYSE) and the Nasdaq.

The Nasdaq Composite Index consists of over 2,500 companies listed on the Nasdaq stock exchange. Many of those companies are involved in the technology sector. 

What Time Does the US Market Open and Close?

The NYSE and the Nasdaq have the same market hours. 

They open at 9.30am Eastern Time (ET) and close at 4pm ET from Monday to Friday. 

In local time, it’s from 9.30pm or 10.30pm till 4am or 5am (depending on daylight savings). 

The exception is during stock market holidays, of course. 

Trading can occur outside of normal stock market hours as well. 

There is “pre-market” trading, which can be as early as 4 am ET and “after-hours” sessions, which typically span from 4 pm to 8 pm ET. 

But do note that trading outside of the normal hours means you have to deal with less liquidity, wider spreads, more competition from institutional investors, and higher volatility. 

So, to keep things simple, retail investors should focus on buying and selling shares during normal stock market hours. 

Do I Have to Buy 100 Shares at a Time In the US Too? 

For US-listed stocks, we can just buy 1 share. 

This is unlike for Singapore stocks, where we have to buy 100 shares at a go. 

The low barrier to US shares also allows us to position size our portfolio better. 

And manage our risk exposure to a particular stock better. 

Let’s say you are just starting out and have a S$5,000 portfolio.

If you were to buy 1 share of Facebook (NASDAQ: FB), you would spend around US$346 or S$468, without commission. 

That equates to 9 per cent of the portfolio. 

However, if you were to invest in DBS Group (SGX: D05) at a share price of S$29.64 per share, you would need to fork out S$2,964, excluding fees, to buy 1 lot or 100 shares of the bank.  

The outlay translates to 59% of your portfolio size.

Therefore, we may end up exposing our portfolio to higher risk than we would like. 

How Do I Open a Brokerage Account? 

To buy US shares, you must open a brokerage account that allows access to the US market.

To choose the best brokers (on top of low commissions), Seedly’s online brokerage review platform is the place to go!

Over there, you can sort according to “Most Popular”, “Most Reviewed”, and “Highest Rating”.

Once you have chosen the broker for you, you can simply head over to the broker’s site to start opening an account.

The brokerages can be generally broken down into traditional Singapore brokers and overseas brokers. 

Let’s look at each category here (for online trades only).

Singapore Brokers

BrokerageMin. Fees/Trade (US$)Trading Commissions/TradeCustodian Fees
Cash Funded Trading Accounts
Syfe TradePromotional Offer: Enjoy 5 free trades/month & 0.99/trade thereafter from now till 31 Mar 2022

After 31 Mar 2022: Enjoy 2 free trades/month & 1.49/trade thereafter
FlatNo inactivity, withdrawal or platform fees
SAXO Markets4.00 (Bronze)
to
1.00 (Diamond)
0.06% (Classic)
to
0.02% (Diamond)
0.12% p.a. (Bronze)
to
0.06% p.a. (Diamond)
(custodian fee calculated daily using the end of day values and charged on a monthly basis)
ProsperUs
(by CGS-CIMB)
5.00FlatNo custodian fee
Phillip Securities
(POEMS Cash Plus)
3.88
(SG$0 - S$29,999 asset value)

2.88
(SG$30,000 - S$249,999 asset value)

1.88
(>S$250,000 asset value)
FlatWaived until 31 Dec 2022

Charges thereafter:
S$2 + GST per counter/month
(capped at S$150/quarter)
or
Waived with minimum 2 trades done per month or
6 trades per quarter or
minimum S$132 brokerage
per quarter for the
Account
FSMOne8.800.08%No custodian fee
Maybank Kim Eng Securities
(Prefunded)
10.000.12%S$2 + GST per counter/month (capped at S$150/quarter)

Custody Fee Waiver:
At least 2 Trades per month or
6 trades per quarter
Standard Chartered10.00
(Personal Banking Clients)
0.00
(Priority Banking Clients)
0.25%
(Personal Banking Clients)
0.20%
(Priority Banking Clients)
No custodian fee
DBS Vickers
(Cash Upfront)
18.00
(Cash upfront rates applicable to Buy trades only & Multi-Currency accounts)
0.15%S$2 + GST per counter/month (capped at S$150/quarter)

Custody Fee Waiver:
At least 2 Trades per month or
6 trades per quarter
CGS-CIMB Securities iTrade
(Cash Upfront Trading)
18.000.18%S$2 + GST per counter/month (capped at S$150/quarter)

Custody Fee Waiver:
At least 2 Trades per month or
6 trades per quarter(end Mar, Jun
Sep, Dec)
Duration of a suspended Counter
UOB Kay Hian
(UTRADE Edge)
20.000.18%
None stated for US equities
Basic Trading Accounts
CGS-CIMB Securities20.000.30%S$2 + GST per counter/month (capped at S$150/quarter)
KGI Securities20.00US$0.03/shareNone stated
Lim & Tan Securities20.000.30%S$2 + GST per counter/month (capped at S$150/quarter) +
GST
or
0.0025% pa of market value of shares whichever is applicable

Custody Fee Waiver:
At least 2 Trades per month or
6 trades per quarter
Maybank Kim Eng Securities20.000.30%S$2 + GST per counter/month (capped at S$150/quarter)

Custody Fee Waiver:
At least 2 Trades per month or
6 trades per quarter
OCBC Securities20.000.30%S$2 + GST per counter/month (capped at S$150/quarter)

Custody Fee Waiver:
At least 2 Trades per month or
6 trades per quarter
Phillip Securities20.000.30%Waived until 31 Dec 2022

Charges thereafter:
S$2 + GST per counter per month
(capped at S$150/quarter)
or
Waived with minimum 2 trades done per month or
6 trades per quarter or
minimum S$132 brokerage
per quarter for the
Account
RHB Securities20.000.30%S$2 + GST per counter/month (capped at S$150/quarter)

Custody Fee Waiver:
At least 2 Trades per month or
6 trades per quarter
UOB Kay Hian20.000.22%S$2 + GST per counter/month (capped at S$150/quarter)

Custody Fee Waiver:
At least 2 Trades per month or
6 trades per quarter
DBS Vickers25.000.18%S$2 + GST per counter/month (capped at S$150/quarter)

Custody Fee Waiver:
At least 2 Trades per month or
6 trades per quarter

(Note: Custodian fees are waived if certain conditions are met. Typically, the fees will be waived if you trade at least two times per account per month or at least six times per account per quarter.)

For this category, Syfe Trade is the cheapest option with five free trades a month and a minimum fee of US$0.99 per trade thereafter when you sign up for the waitlist and open an account from now till 31 March 2022.

But after the promotional period ends on 31 March 2022, users will only get two free trades a month and will have to pay a minimum fee of US$1.49 per trade.

The neobroker also offers fractional trading. With fractional trading, investors can now buy into the world’s biggest companies starting with as little as US$1, regardless of share price, and own a portfolio of stocks or ETFs for a fraction of the usual cost. 

Overseas Brokers

BrokerageMinimum Fees (US$)Trading CommissionsAdditional Fees
Firstrade0.00Flat US$25 per withdrawal
TD Ameritrade0.00Flat US$25 per withdrawal
Moomoo
(Powered by Futu)
1.99
[Commission fee (0.99) + platform fee (1.00)]
US$0.0099/share
[Commission fee (0.0049) + platform fee (0.0050)]/share
N/A
Interactive Brokers
(Tiered Account)
0.35 (base tier) US$0.0035/share, up to a maximum of 1% of trade valueN/A
(Inactivity fee removed as of 1 July 2021)
Tiger Brokers1.99
[Commission fee (0.99) + platform fee (1.00)]
US$0.010/share
[Commission fee (0.0050) + platform fee (0.0050)]/share
N/A

On top of brokerage and custodian fees for the brokers, investors also have to note other fees such as Securities and Exchange Commission (SEC) fees and dividend handling charges (if any), among others. 

(Note: Firstrade is not regulated by the Monetary Authority of Singapore (MAS). We have added it here to provide a comprehensive comparison for readers. We would recommend investors trade through MAS-regulated brokers only.)

As for the overseas brokerages, I would look at TD Ameritrade because you can’t beat free. But do take note of the hefty US$25 (S$33.80) withdrawal fee.

Otherwise, your next best option would be the Interactive Brokers Singapore’s tired account’s base tier with its low fees of US$0.0035 per share (min. US$0.35) and one free withdrawal every month (S$15 per withdrawal thereafter).

The best part? You can buy fractional shares on Interactive Brokers as well!

For those who want to have an in-depth comparison between Interactive Brokers (tiered account), Moomoo, and Tiger Brokers, here’s something for you.

Are There Taxes Involved? 

Yes, there are taxes involved when investing in US shares as a Singaporean. 

Investors need to take note of withholding tax for dividends, currency conversion fees, and US estate tax. 

How to Research on US Stocks?

Researching US stocks to buy is made easy with stock screeners

StocksCafe, Investing.com, MSN Money and Yahoo Finance provide screening of US-listed stocks. 

From there, you can understand more about the companies by analysing their economic moats and financial statements, among other criteria

Have Burning Questions Surrounding The Stock Market?

Why not check out the investing group on Seedly and participate in the lively discussion regarding investing!

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Disclaimer: The information provided by Seedly serves as an educational piece and is not intended to be personalised investment advice. ​Readers should always do their own due diligence and consider their financial goals before investing in any stock. The writer owns shares in Starbucks. 

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About Sudhan P
It isn't fair competition when only one company in the world makes Monopoly. But I love investing in monopolies. Before joining the Seedly hood, I had the chance to co-author a Singapore-themed investment book – "Invest Lah! The Average Joe's Guide To Investing" – and work at The Motley Fool Singapore as an analyst.
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