This article was originally published on 7 August 2020 and has been updated on 3 March 2021 to include the latest promotion.
This article was written in collaboration with POEMS by PhillipCapital. All views expressed in this article are the independent opinion of DollarsAndSense.sg based on our research. DollarsAndSense.sg is not liable for any financial losses that may arise from any transactions and readers are encouraged to do their own due diligence. You can view our full editorial policy here.
Before you can start investing in the financial markets, you need to open a trading account with a brokerage. In Singapore, one such brokerage you can consider is Phillip Securities, Singapore’s largest retail broker.
Operating under the PhillipCapital umbrella, Phillip Securities was the first broker in Singapore to launch an online trading platform, Phillip’s Online Electronic Mart System more commonly known as POEMS. Established since 1996, POEMS has become one of Singapore’s most popular trading platforms.
When you open a trading account with Phillip Securities, you can opt for its newly launched POEMS Cash Plus Account. Besides providing access to global stock markets, POEMS Cash Plus Account also offers personalised 24/7 dealing assistance and consultation service at 15 conveniently located Phillip Investor Centres. As a proponent of investor education, PhillipCapital also offers free trading webinars, seminars and research materials on POEMS to raise financial literacy among investors and help them make informed investment decisions.
Markets That You Can Trade With Low Cost POEMS Cash Plus Account
Today, investors are no longer limited to just investing in companies listed on the Singapore Exchange (SGX). With POEMS, you can invest in a total of 26 exchanges globally, including the United States, Hong Kong, China, Australia, Germany financial markets, or regional markets such as Malaysia, Thailand and Indonesia.
For investors who choose the POEMS Cash Plus Account, you will be happy to know that it is one of the lowest-cost trading accounts in Singapore and the US. Charging just 0.08% of your trade value, with no minimum commission, a S$3,000 investment in Singapore stocks will only incur S$2.40 in brokerage commission fees. A flat rate of between USD 5.88 – 8.88 is charged for US stocks. This brokerage rate is applicable for investment using Central Provident Fund (CPF) and Supplementary Retirement Scheme (SRS) money.
Editor’s Note: POEMS is currently running a promotion where it is reducing its regular commission charges to 0% commissions for U.S. shares, 0.05% for Hong Kong shares, and 0.08% for Singapore shares. Please refer to the table below for the current commission fees (as of 3 March 2021).
One interesting observation about the POEMS Cash Plus Account is that it has a tiered pricing model based on the value of assets held in a custodian account with POEMS, rather than the size of each transaction.
This is different from most other brokerage firms in Singapore, where you typically enjoy a lower brokerage rate when your transaction size is higher, typically at S$50,001 to S$100,000, or at S$100,000 and above.
The method POEMS uses to determine your brokerage rate is more advantageous to smaller retail investors, who will find it difficult to achieve a single trade size that is above S$50,000. For example, even if you intend to invest about S$5,000 each month, and decide to save up for 6 months so that you make a one-time investment of S$30,000, you will still be unable to qualify for lower brokerage charges for investment on the next tier, which is typically at S$50,001.
The POEMS Cash Plus Account bases its brokerage rate on the value of assets held under its custody, making it easier for investors to enjoy the lower brokerage rates. An investor who starts investing S$5,000 a month will qualify as a Premier customer (S$30,000 to S$249,000) after six months – and can enjoy a lower brokerage rate for all subsequent trades via the POEMS Cash Plus Account, regardless of how small they are, as long as the value of their assets held with POEMS is S$30,000 and above.
To qualify as a Privileged customer, the asset under management must be at S$250,000 or more. POEMS investors can invest in a combination of stocks, bonds, money market funds or even just hold cash in their POEMS Cash Plus Account. All these are considered as asset under management and makes it much easier for POEMS investors to qualify as a Privileged customer and enjoy the lower brokerage rate.
Pay For Your Investments In Foreign Currencies
Another advantage of the POEMS Cash Plus Account is that it allows you to pay in foreign currency. You enjoy both convenience and cost efficiency when trading overseas stocks. There is a total of nine foreign currencies (USD, HKD, MYR, JPY, AUD, GBP, EUR, CNY and CAD) that you can hold onto, apart from SGD.
For example, if you want to invest in US-listed companies such, as Apple and Amazon, or Singapore listed companies trading in USD, such as Dairy Farm International or Manulife US REIT, you want to ensure that you are not only getting a good price for the stocks, but also a good currency exchange rate. This is because you will need to settle the trades in USD and exchange your SGD for USD. If the exchange rate is not favourable or transparent, then you may be paying more (in SGD) even if the price in USD remains the same.
When the SGD to USD conversion rate is favourable to you (i.e. the SGD is strong relative to the USD), you may want to convert to USD today, even if you are not looking to invest in US-denominated stocks immediately.
The POEMS Cash Plus Account allows you to maintain foreign currencies in your account. As such, you can choose to settle your purchases or sales either in foreign currency or in SGD.
Earn Interest On Funds Deposited In Your POEMS Cash Plus Account
If you have funds in your POEMS Cash Plus Account that are not yet invested, or receive funds in your account after selling some stocks, you don’t need to worry about money being left idle. For any amount above 50,000 held in SGD, USD, HKD and AUD, you will earn interest on credit balance up to 0.15%, find out more in POEMS Cash Plus Account Infosheet.
To enjoy higher returns on your uninvested monies, you can opt for POEMS’s Excess Funds Management facility that automatically parks idle cash in your POEMS Cash Plus Account in the Phillip Money Market Fund, which can earn you interest of about 0.33% p.a. [0.3353% p.a. (SGD), 0.3261% p.a. (USD) as of 1 March 2021].
Whenever you invest through POEMS, funds will automatically be deducted from your holdings with Excess Funds Management facility.
Do note that as with all types of investments, money market funds invested in via Excess Funds Management facility are neither risk-free nor are the advertised interest rates guaranteed since this is based on prevailing market interest rates. You can read up more about Excess Funds Management facility here, or watch a short yet informative Q&A video here.
Assets Are Held In A Custodian Account Via Phillip Securities
Similar to many brokerage firms in Singapore, any assets deposited or transacted through the POEMS Cash Plus Account will be held in a custodian account with Phillip Securities. The only exception is investments made using CPF/SRS monies. Your account will also be automatically credited with dividends and interest payments that you earn from your investments.
One thing we like about the POEMS Cash Plus Account is that you can easily designate it as your primary investment account. Unlike some other brokers that may require you to link your brokerage account to a separate bank account, the POEMS Cash Plus Account can be used not only to make trades and to hold your shares, but also to hold any cash (in SGD or foreign currency) that you may have set aside for your investments.
This way, you minimise conflating your investment returns and investment deposits from other sources of income that you may also receive (e.g. your salary). For self-directed investors, most of the services that you need can be found in the POEMS Cash Plus Account.
There is a maintenance fee payable each quarter. This is at $15 per quarter for SGX stocks (waived if there is 1 trade per quarter) and $2 per counter per month for foreign shares (waived with minimum of 2 trades per month or 6 trades per quarter or minimum of S$132 brokerage per quarter). However, for Privileged customers with $250,000 or more assets under management, account maintenance fee is automatically waived.
Apply For A POEMS Cash Plus Account
Besides the services that you can access via the POEMS Cash Plus Account, Phillip Securities is a full-service broker that provides its customers with research, platform tools, webinars and seminars. You can also invest beyond the stock market, into unit trusts, bonds and receive securities advisory services as well through POEMS.