How to lower fees for trading SGX stocks with a custodian account

This post was created in partnership with Moomoo SG. All views and opinions expressed in this article are Beansprout's objective and professional opinions. 

CDP or Custodian Account for Trading SGX stocks?

When it comes to choosing a broker, one of the first questions we need to start by asking ourselves is whether we would prefer a custodian or CDP-linked account.

Earlier, I shared the difference between a custodian and CDP-linked account. 

This led to some questions on what are the options if we would like to transfer our CDP-linked account to a custodian account to lower our trading fees. 

In this post, I will share how you can transfer-in your CDP-linked SGX stocks to MoomooSG and earn attractive rewards by doing so. Read on to find out more!

CDP Account vs Custodian Account

Let us take a closer look at what the differences are between a CDP and custodian account.

A Central Depository (CDP) account directly registers legal ownership of stocks and shares in your name, giving you full ownership and voting rights.

In Singapore, your CDP account is centrally operated by the Singapore Stock Exchange (SGX) which offers clearing, settlement and depository services for customers.

A custodian account, on the other hand, is where your stocks are held under the broker’s name on your behalf.

In the case of MoomooSG, stocks in your MoomooSG universal account will be held in a custodian account on your behalf.

This ownership arrangement provides investors with lower fees as your shares are pooled with others and managed by the broker.

In summary,

• CDP account: Individual investors directly purchase securities owned in their name, which goes into their CDP account. They are the legal owner of the shares and become shareholders of the respective SGX-listed companies. This arrangement comes with higher costs in the form of clearing, trading, settlement and processing fees.
• Custodian account: Individual investors purchase securities through a broker which are held in custody. Legal ownership lies with the broker who holds the securities on behalf of the investor. This arrangement typically incurs lower fees.

Why should I transfer from CDP to MoomooSG?

#1 - Lower Trading Fees

Generally speaking, CDP-linked broker accounts come with a higher fee for buying and selling shares as well as corporate actions.

With just a 0.03% trading fee (minimum $0.99 per order) during the 1-year for new users, MoomooSG presents a very attractive option when compared to CDP-linked brokers.

Thereafter, the total trading fees will be increased to 0.06%. However, this remains lower compared to most CDP accounts. 

For example, most CDP-linked brokers impose a trading commission of 0.275% or more, with a minimum fee of $25 per trade.

If I am an investor who only trades in small amounts, a $25 commission could very well eat into my returns.

A buy order for 1,000 shares of the Nikko AM Singapore STI ETF at $3.50 per share would be $3,500 before fees.

This trade would incur $25 in commission fees even though 0.275% of the transaction value is only $9.625.

#2 - Easy Transfer

The transfer-in process from CDP (or other brokers, for that matter) to MoomooSG is not completely done online.

Better yet, MoomooSG will handle all the paperwork and administrative actions for you.

#3 - Reliable custody

MoomooSG is a broker-dealer and custodian licensed with and regulated by the Monetary Authority of Singapore.

Since opening its doors to Singaporean retail investors in March 2021, MoomooSG has gained popularity with investors looking for a next-generation online trading platform.

Moreover, MoomooSG was the first digital broker to receive the SGX Group’s full membership across securities and derivatives markets.

How to transfer your SG stocks to MoomooSG

For your easy reference, here is a step-by-step guide on how to initiate the transfer process.

Step 1: Begin the transfer-in process by going to ‘Accounts’ inside the MoomooSG app and select the option to transfer stock in. Select ‘SG Market’ when prompted.

Step 2: Enter your CDP account number (or account number from external broker). You will be asked to upload a recent account statement in PDF format containing your full name, address and share quantity.

Step 3: Complete the electronically signed transfer form and upload your ID for verification. If you are transferring from another broker, contact your current broker to initiate a transfer-out request on their end.

What would Beansprout do?

If I am looking to transfer my SGX holdings from a CDP-linked account to a custodian account, I would consider opening an account with MoomooSG to save on commission fees.

After all, the difference I can save on commission fees can make a difference on my overall portfolio return, especially over a longer period of time.

MoomooSG is running a promotion which allows you to get up to $1,020 rewards if you transfer-in your securities (depending on their stock value!).

This campaign will last until 9:59pm SGT on 19 September 2024 and is open to Singapore residents.

Both new and existing customers of MoomooSG may participate in the transfer activity and are eligible for the rewards.

For more details, you may refer to the complete terms and conditions here.

You can get updates about the latest promotion here, as MoomooSG updates it regularly.

Additionally, if you do not have a MoomooSG account, you can sign up for a MoomooSG account and enjoy new user rewards of up to S$1034.

Join the Beansprout Telegram group for the latest insights on Singapore stocks, REITs, bonds and ETFs. 

Important Information

Neither Moomoo Singapore or its affiliates shall be liable for the content of the information provided. This advertisement has not been reviewed by the Monetary Authority of Singapore.

Any information provided in this article is meant purely for informational and investor education purposes, and should not be relied upon as financial or investment advice, or advice on corporate finance.

The information provided in this article are on an “as is” and “as available” basis without warranty of any kind, whether express or implied. Beansprout does not recommend any particular course of action in relation to any investment product or class of investment products. No information is presented with the intention to induce any person to buy, sell, or hold a particular investment product or class of investment products.

You may wish to seek advice from a financial adviser before making a commitment to purchase the product; and in the event that you choose not to seek advice from a financial adviser, you should consider whether the product in question is suitable for you.

The information provided herein may contain projections or other forward looking statements regarding future events or future performance of countries, assets, markets or companies. Actual events or results may differ materially. Past performance figures are not necessarily indicative of future or likely performance.

Please refer to the Moomoo Financial Singapore Pte. Ltd’s website for more information on the full T&Cs and disclaimers.