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Investing With Interactive Brokers (IBKR): Here’s What Investors In Singapore Need To Know

We can now enjoy Interactive Broker’s low brokerage fees for stocks listed in Singapore, U.S., Hong Kong, India, Australia and many others countries.

Listed on the NASDAQ, Interactive Brokers (IBKR) is a pioneer in global online trading with over 40 years of track record. IBKR is best known for its low commission fees, transparent rates, innovative brokerage services and global presence providing access to over 150 markets in 34 countries.

When we fund our IBKR account, we can also earn up to 4.83% on our USD cash balances. We do not need to keep it in any cash management accounts or lock it for any period of time. We don’t earn interest returns if we keep our money in Singapore Dollars or other currencies to invest in the Hong Kong, Australian or other available stock markets.

How To Buy Stocks On Interactive Brokers In Singapore?

When investing on Interactive Brokers, we can simply Buy and Sell the counters that we wish to trade. We can either search for them or have them listed in our watchlist. On IBKR, we also have the option to invest in fractional shares (which we can input through a dollar value) or any number of shares. There are various order types we can choose for our trades, with the most common ones being limit order (i.e. you only trade the stock if it hits your price) or market order (i.e. you take the latest market price).

Similar to investing via many other online brokerages, IBKR also provides comprehensive information beyond prices, such as volume and other financial information and news.

One of the main things we need to understand is that we do not see live market data, and the prices we see are just delayed quotes. For investors, this may be good enough. Of course, we can also choose to get a more current price quote by clicking on the “Snapshot” button. This will cost US$0.01 per quote request.

The Interactive Brokers’ website states three main differentiating factors why investors should choose to invest via its platform.

Read Also: Step-By-Step Guide To Stock Investing In Singapore

#1 Interactive Brokers Charges A Low Fee

Known for charging very competitive brokerage commissions and financing rates, Interactive Brokers claims to offer the lowest commissions and states that if an exchange provides a rebate, Interactive Brokers will pass on some or all of the savings directly to clients. Its commission rates are also transparently listed on its website.

For stocks and other securities listed in Singapore, there is a fixed brokerage commission of 0.08% of the trade value, with a minimum brokerage fee of $2.50. IBKR also charges a tiered commission for those who trade more than $2.5 million each month (which is not exactly applicable to retail investors).

Interactive Brokers commission rate For Singapore stocks
Source: Interactive Brokers

(all screenshots from IBKR)

For US-listed stocks, it charges a transaction fee of just US$0.005 per share, with a minimum charge of US$1. Moreover, IBKR does not charge a fee when we invest in US-listed ETFs.

Interactive Brokers commission rate for US stocks
Its transaction fees for other regions are also very competitive, and you can review the entire list transparently depicted on its website. There are no added spreads, inactivity fees, platform fees or account minimums.

In addition, it also charges competitive margin financing interest rates and allows us to earn an extra income on our shares via its Stock Yield Enhancement Programme. We can also earn up to 3.83% interest on idle cash we leave in our Interactive Brokers account, without having to put it in any cash management accounts- which bears a small investment risk.

Read Also: Singapore Online Stock Brokerage Account Fees Comparison (2024 Edition)

#2 Interactive Brokers Offers Access To Global Markets

Via our Interactive Brokers account, investors in Singapore can access stocks, options, futures, currencies, bonds and funds in more than 150 markets, across 34 countries and in 27 currencies. If we prefer to invest in ready-made portfolios, we can also choose to look into IBKR’s themed portfolios.

This is no small feat as not many brokerages offer such extensive access to so many markets and products via a single integrated platform. This makes it easy to review our investments in one app/platform without having to keep multiple accounts open.

Offering 27 currencies, investors in Singapore (and globally) can fund our accounts in multiple currencies and trade assets in multiple currencies, without incurring foreign exchange costs. Of course, if we fund our account in one currency and want to invest in another currency, we may incur some foreign currency exchange-related costs. However, this also tends to be quite competitive with the IBKR platform.

#3 Providing Innovative Solutions With Its “Premier Technology”

Interactive Brokers offers technological solutions that cater to beginner investors as well as sophisticated traders and wealth managers. These include research and news, free trading tools, reporting, as well as trading platforms and diverse types of orders and algos we can use for our trading/investing needs.

We can visit the Interactive Brokers website to find out more about these technologies and how they can help us.

Interactive Brokers Technology

Opening An Interactive Brokers Account

The process to open an IBKR account is fairly quick and straightforward, and can be done entirely online – without needing to print anything or send in any hard copy documents. We can apply for an Interactive Brokers account in less than 10 minutes, and can be completed even more quickly if we use MyInfo.

At the end of the application process, there will be a notification that it will take a few days before the account application is approved. So, we cannot start trading immediately. This is similar to how most other online/digital brokerages operate, and much more convenient than opening an account with more traditional brokerages which may still require physical copies in the sign-up process.

Read Also: Step-By-Step Guide To Opening A Stock Brokerage Account In Singapore

How To Fund My Interactive Brokers Account In Singapore?

There are two ways to go about funding our Interactive Brokers account: 1) via a bank wire, which IBKR says can take up to four business days (but usually takes much faster in our experience – as little as a few hours sometimes), and 2) by transferring securities we already own from another firm into our IBKR account.

Choosing to wire in money simply means we will receive the account information and need to log into our bank accounts to make the transfer to the account details provided by Interactive Brokers.

We can also choose to transfer multiple currencies, namely British Pounds, Chinese Yuan, Hong Kong Dollars, US Dollars and Singapore Dollars, into our accounts.

Interactive Brokers only offers a custodian account, which means that we will store our investments with Interactive Brokers rather than in our CDP Account after buying stocks. There’s virtually no extra charge for holding our investments this way since IBKR does not charge any custodian account fees.

We can also choose the Basic FOP Transfer option, which allows us to transfer our securities kept in another custodian account in Singapore, or with another brokerage internationally, to Interactive Brokers, free-of-charge. While transferring in our securities may be free-of-charge, we may have to incur a cost when transferring our securities out of another brokerage account.

Using Your Interactive Brokers Account

While waiting for our Interactive Brokers account application to complete, we can also explore some features offered by Interactive Brokers “Education” suite.

This gives us access to:

  • IBKR Campus – where we can learn about trading, financial markets and IBKR’s trading tools.
  • Traders’ Academy – where we can take free courses on Advisor  Tools, IBKR Portfolio & Risk Analysis, Investment Analysis, Taxes, IBKR Trading Tools and more. These courses are also provided by well-known providers such as IBKR themselves, and CME Group, State Street Global Advisors, Wisdom Tree and more.
  • Traders’ Insights – providing high-quality content and articles on the latest happenings in the financial markets
  • IBKR Podcast – an insights podcast for investors and traders to learn more about the investing landscape.
  • IBKR Quant Blog – providing trading-related content
  • Webinars – which allows investors and traders to understand interesting ideas and markets
  • Student Trading Lab – a free online resource for educators. Educators can use it to provide students paper trading account, with a full complement of trading tools and $1 million paper trading equity.
  • Short Videos – giving us insights, in video format, on trading methodologies and functions
  • Traders’ Glossary and Traders’ Calendar for more general information on investment terms and upcoming events we need to know.

Read Also: Robo-Advisory In Singapore: What You Need To Know Before Investing

This article was first published on 21 July 2020 and updated with more information. 

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