Easy (But Detailed) Steps To Opening Your First Brokerage and CDP Account

This article was updated on 8 October 2018 to include latest information

If starting your investing journey by buying stocks is on your to-do list, then you will need to first start off by opening a couple of accounts. Mainly, there are the brokerage and Central Depository (CDP) accounts. In this article, we will share some basic information that you need to know on both these accounts.

Opening A Brokerage Account

To open a brokerage account, you can go to the individual websites of brokerage firms to apply. Alternatively, just walk in to any branch.

Due to the competitive nature of the industry, the commission fee across brokerage firms are quite similar. However, if you are intending to buy small amount of stock at any one time, go for brokerages that charge a lower commission fee such as FSMOne and Standard Chartered.

For example, if you are buying 1,000 shares at $0.30 each, the total cost of the shares would be $300. Most brokerage firm will charge a minimum fee of $25. If you work out the maths, this is about 8.3% of your investment! It does not take a genius to figure out that an 8.3% transaction cost (one-way) is not going to do you much good as you intend to grow your wealth.

It is also important to note that transaction is a two-way charge, commission applies for both the purchase and sale of shares. Therefore, it is important to choose a brokerage firm with commission that suits the investment amount you have budgeted for. If you intend to invest $200 each time, go for one without a minimum charge. If you intend to invest $20,000 each time, go for one that has a low commission percentage. Alternatively, you can also consider using a Regular Shares Savings Plan, also known by some as Monthly Investment Plans, to set aside a small amount to invest each month.

Read Also: Step-By-Step Guide To Investing Using Regular Shares Savings (RSS) Plan

It is also worthwhile to note that different brokerage firms use different trading platforms. Hence, it will be good to check out the different features they could offer so as to facilitate your trading.

Stock Brokerage	Min Fees (S$)	Trading Fees
		<S$50K	S50K – S$100K	>S$100K
PhillipCapital	25	0.28%	0.22%	0.18%
DBS Vickers	25	0.28%	0.22%	0.18%
AmFraser Securities	25	0.275%	0.22%	0.18%
CIMB Securities	25	0.275%	0.22%	0.18%
Citibank Brokerage	28	0.25%	0.20%	0.18%
RHB Securities	25	0.275%	0.22%	0.18%
Maybank Kim Eng Securities	25	0.275%	0.22%	0.18%
Lim & Tan Securities	25	0.28%	0.22%	0.18%
OCBC Securities	25	0.275%	0.22%	0.18%
UOB Kay Hian	25	0.275%	0.22%	0.20%
Standard Chartered (Custodian Account)	10	0.20%	0.20%	0.20%
SAXO Capital Markets (Custodian Account)	25	0.15%	0.15%	0.15%
FSMOne (Custodian Account)	10	0.08%	0.08%	0.08%

 

Opening A CDP Account

A CDP account is an account that “keeps” all the stocks you have. You can think of your CDP account as a safe deposit where stocks and bonds that you buy on SGX are automatically deposited and stored in your personal CDP account, rather than held with the broker you used to complete the transaction. Your CDP account also provide services such as securities lending and borrowing; transfer, deposit and withdrawal of securities etc. 

If this is the first time you are signing up for a brokerage account, your broker will likely aid in providing you the CDP application form to fill in and submit them, on your behalf, to CDP. This saves you the hassle of having to deliver the application form on your own. Alternatively, you can sign up for a CDP Account by downloading and completing the CDP application form. More information can be found on the SGX website.

To open an individual CDP securities account, you must meet the following conditions:

• 18 years old and above.
• Not an un-discharged bankrupt.
• Have a bank account with one the following banks in Singapore – Citibank, DBS/POSB, HSBC, OCBC Standard Chartered Bank and UOB.

If you meet all of the above criteria, you can proceed to apply for your CDP account.

Step 1: Download and complete the CDP application form on the SGX website.

The form can be found on the SGX website. Here’s the link for easy access.

Step 2: Print a photocopy of your Singapore NRIC, Malaysia Identification Card, or Passport.

Investors, both local and foreign, can open a CDP account.

Step 3: Attach one of the three following original documents or e-statements, dated within last 3 month, to your application form.

This can be either your bank statement from any of the Monetary Authority of Singapore (MAS) licensed banks

Or

Your Central Provident Fund (CPF) statement (available on the CPF website)

Or

Your Latest Notice of Assessment for Income tax (available on the IRAS website)

Step 4: Submit the signed application form and supporting documents through one of the following channels

The broker that you are opening a brokerage account with

Or

Send it by mail to CDP – The Central Depository (Pte) Limited, 11 North Buona Vista Drive, #06-07, The Metropolis Tower 2, Singapore 138589

Or

Drop off the form physically at The Central Depository (Pte) Limited, 9 North Buona Vista Drive, #01-19/20

For more information, visit CDP website.

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