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Interactive Brokers (IBKR) Singapore Review 2021: Best for Global Trading with Low Costs

IBKR Singapore
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Interactive Brokers (IBKR) are pretty popular due to their low trading costs that are hard to beat compared with other trading firms. With IBKR, you get a chance to invest globally using single brokerage accounts with no minimum balance required. This makes it one of the cheapest trading platforms in the market. However, IBKR Pro users require a maintenance fee if they do not make the minimum trades required.

 

Who are Interactive Brokers?

Interactive Brokers is an established online brokerage brand that operates in Singapore. The firm is one of the largest brokerage firms in the United States, with a powerful presence in Asia authorized by the monetary authority.

The Interactive Brokers platform lets you invest in stocks, options, futures, currencies, bonds, and funds and not forgetting metals Minimum commission fee in more than 135 markets and multiple currencies.

It is one of the cheapest trading accounts available in the Singapore market today. Interactive Brokers Singapore offers dedicated on-ground support for their active traders and wealth management community.

Its local office provides its brokerage clients with avenues to engage with value-added services.

 

What are IBKR Pros and Cons?

Listed on the NASDAQ in 2007, Interactive brokers is one of the most popular online brokerage firms in Singapore today. But just like other trading platforms, IBKR has its upside and downside as well.

The Pros

  • Offers low trading costs
  • Access to markets globally
  • It required no minimum balance
  • IBKR’s trading tools that take trading to the next level

The Cons

  • IBKR pro users incur a maintenance fee if they do not make the minimum trades required
  • IBKR lite account is not open to everyone

 

What Are the Reasons for Choosing IBKR?

IBKR is one of the many options for investors in the country. IBKR has a large Singapore client base that continues to grow by the day. Here are the reasons why more and more people are choosing Interactive Brokers.

1. IBKR Offers Low Trading Cost

Interactive Brokers offers trading at pretty competitive and very affordable trading fees. These low rates do not only apply to stocks but all the trade assets on the IBKR portfolio.

Trading fees start at 0.08% of trade value for the Singapore stocks, 0.11% of trade value for Singapore CFD shares, US$0.005 per share of US stocks and0.005% per share for the US share CDFs.

It is important to note that to start trading frequently in Singapore, you will be charged a minimum fee of S$2.50.

2. IBKR Has Global Access

Investors who have an Interactive Brokers account in Singapore have access to stocks, options, futures, currencies, bonds, and funds in more than 134 markets in 33 countries, in 23 currencies.

This is a huge deal since most brokers cannot offer many markets in one platform and from one account.

Investors in Singapore can invest worldwide and fund their accounts with multiple currencies without paying for the foreign exchange cost.

3. IBKR Requires No Minimum Balance to Invest In

Most investors fail to start early because they cannot meet the minimum capital imposed by most brokerage firms.

Whether using IBKR lite or IBKR Pro, you do not need a minimum amount to start, making it easy for most investors.

Interactive Brokers platform has also removed the US$10 minimum maintenance fee. This means even if you do not make the minimum trades each month, you will still enjoy IBKR low-cost trades. The charges are the same whether you trade frequently or not.

4. Offers Upgraded Trading Technology

IBKR helps you optimize your trading strategy with different tools with more than 100 order types and algorithms to choose from. The platform also offers trading APIs which allow you to automate trading strategies, build custom trading applications and develop commercial trading software.

Interactive Brokers also have a campus if you would like to do your learning and research. The campus helps you understand and use their facilities at total capacity. The platform also offers market commentary, webinars, and market analyses from professionals.

 

What are IBKR Featured Products?

Interactive Brokers has two products. There are:

  • IBKR Lite
  • IBKR Pro

1. IBKR Pro – for Every Investor

Contrary to what most people think, IBKR Pro is not for active traders and sophisticated investors. The Pro account is designed for the everyday investor.

It is also important to note that the IBKR Pro is the only option for Singaporeans at Interactive Brokers unless you live in Singapore with a US residency or fall under the US Employee tracking.

IBKR Pro is a normal trading platform that is available for non-US residents. I

BKR Pro users enjoy all the platform’s perks, including advanced techs like IBKR APIS, tools, and algorithms. Pro does not have a minimum account requirement. You will, however, need to pay a maintenance fee based on how much you trade.

2. IBKR Lite – For US Residents and Those Under the Employee Track

IBKR Lite is only available to US residents or clients from an introducing Broker. The platform is also available to you if you are an employee of a US company, regardless of your location.

If you are an everyday investor who is not a US resident or an employee of a US company, the IBKR account is not available for you.

IBKR Lite offers unlimited $0 commissions for US-listed stocks and ETF trades with no account minimum required and 0 interactive brokers inactivity fee. With Lite, you get to enjoy a simplified trading experience that comes with free access to the market data.

Here is a list of people eligible for IBKR Lite:

  • US Wealth managers and Family and Friends Advisors
  • Us resident individuals, joint, IRA and trust accounts
  • Broker clients from any residency
  • Employee track individuals, joint, IRA, and trust clients of any residency

 

Here are the main differences between IBKR Pro and IBKR Lite

IBKR Pro IBKR Lite
Has access to advanced technology such as APIs and Web Traders, which allow you to execute advanced order types.

 

Has no access to the advanced tech on IBKR Pro
Clients enjoy commission-free trade on US Exchange Limited Stocks or ETFs Offers fixed or tiered pricing
Interest charges on margin loans are 1% lower for IBKR Pro users and lower rates for high-value loans Interest paid on idle cash is 1% lower for IBKR Lite users
No inactivity fees No inactivity fee

 

What Are the Charges to Look Out for at Interactive Brokers IBKR?

Before you start trading with IBKR, it is essential to note that low fees do not mean any fee at all. Here is a table of what fees you will be expected to pay at IBKR.

  IBKR Lite IBKR Pro
Maintenance commission Fee US$0 US$0
Minimum balance required US$0 US$0
Interest paid on idle cash balances Benchmark minus 1.5% Benchmark minus 0.5%
Interest charged on margin loans Benchmark plus 2.5% Begins at Benchmark plus 1.5%, with lower
Inactivity fee US$0 US$0

 

What are the Two Types of Pricing Under IBKR?

Interactive Brokers charges differently based on the account. They include:

Fixed Pricing:

Here you are charged a fixed rare per share you trade. It includes all the regulatory and exchange fees. It could be a fixed amount per share like US$0.005 per share for US stocks and a set percentage of trade value such as 0.08%of trade value for Singapore stocks.

Tiered Pricing

Here your IBKR commission fees largely depend on your trading volume. The fees charged are affected by regulatory, exchange, and clearing fees.

 

How to Open an Interactive Brokers Account

Here are the steps to take if you want to open an Interactive Brokers account. 

Step 1

  • Create your username and password
  • Select your country/ region
  • Confirm your email address

Step 2

  • Verify your email address

Step 3

  • Add your personal information to your application. This information includes your tax and income information. You can use MyInfo from your SingPass account to speed up your application process. This will help you prefill your application.

Step 4

  • Fill in the part that is left

Step 5

  • All you need to do here is fund your account and start trading. It is important to note that some leverage products will need you to meet specific criteria to start trading in them.

 

Rising coins

How to Fund Your Account

There are different ways in which you can fund your account. They include:

1. Bank Wire

You will need to contact your bank to add funds to your IBKR account from your bank accounts. In most cases, it takes immediately or four business days,

With a bank transfer, there is no limit to the amount of money you can transfer.

2. Transfer Securities

Here you can transfer securities and other financial instruments from another brokerage firm into your account. This takes anywhere between 2 to 8 business days. There is also no limit to the amount you can transfer.

It is important to note that you can transfer British Pounds, Chinese Yuan, Hong Kong dollars, or Singapore dollars into your account.

You should also note that IBKR offers custodian accounts to its users. This means that they will store your investment rather than using a CDP account after trading. There is no charge for holding your investment, which means that there are no custodian fees.

3. Basic FOP Transfer

With this option, you can transfer securities from other custodian accounts in Singapore or another brokerage firm internationally to your IBKR account without any charge.

 

What Does The IBKR Account Give You Access to?

  • Trader’s Insight

The trading platform provides high-quality content on the latest news in the financial markets

  • IBKR Campus

This is where you learn about financial markets, trading, and Interactive Brokers trading tools

  • Webinars

Here investors and traders get to exchange exciting ideas about the markets

  • Trader’s Academy

Here, you can take free IBKR portfolio and Risk analysis courses, Advisor tools, taxes, and trading tools.

  • Short Videos

These videos give insight in video format on trading functions and methodologies.

 

For Whom Is Interactive Brokers (IBKR) Best?

Interactive Brokers is best for investors looking for innovative and affordable brokerage services with access to multiple stock markets, including the Singapore Exchange.

IBKR is scrapping its US$10 maintenance fee, making it an ideal broker for investors who make few trades a month and those who make multiple transactions.

So if you trade in a small amount, IBKR is the brokerage service for you.

 

Final Thoughts

Interactive Brokers is one of the more established international brokerages with affordable and innovative services in the market. It charges low fees for its services. 

Singapore residents get to enjoy the perks of IBKR Pro, which offers advanced tech in trading and low trading fees while still giving you global access. IBKR also offers advanced tools such as APIs and algorithms that help investors make informed financial decisions.

Key Takeaways

  • Interactive Brokers provides investors with access to more than 134 markets across the globe.
  • IBKR has two products: the IBKR pro and IBKR Lite.
  • IBKR has scrapped the US$10 maintenance fee.
  • Unlike most trading platforms, the platform offers education materials for beginner investors who want to increase their investing knowledge.

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