Best Investment Brokerage Platform for SG Stocks 2024

Shares have the potential to increase in value over time. When we buy shares in a company, we are essentially owning a part of the business. Over time, the business can have growth in their profits when their business expands. Hence, the value of our ownership in the business will also increase resulting in a growth in share price. This growth in share price is known as capital growth and if we sell the shares, the profit earned is termed as “capital gains”. In the event if we sold the shares at a lower price than the price we got it for, it will result in a “capital loss”. When buying Singapore stocks, there is no income tax due on sales of shares as there is no capital gains tax.

Besides selling shares, shares can generate returns when we hold them in the form of dividends. When a company makes a profit, it can use the profits for multiple purposes. The company can reinvest their profits into the company to grow the business, keep it for future opportunities and/or distribute it amongst the shareholders as dividends. Dividends can be paid annually, semi-annual or quarterly. For those who are looking to earn a passive income, you can look for companies that have consistent dividend payouts. Similar to capital growth, dividends paid by a Singapore resident company is not taxed which is an advantage of buying Singapore stocks.

Investors can invest in shares of different companies with small amounts of money as only a minimum of 100 shares is required each. There are over 700 listed companies on the Singapore Exchange. Each of these companies are of different businesses targeting different markets with varying growth. By investing in more than one company, we are not making a huge investment on a single company which allows us to spread our risk. An alternative to diversify our investments can be done through Exchange Traded Funds or Unit trusts.

The liquidity of shares is a selling point for many investors as we can purchase or sell shares easily when we want to. The only requirement is that the number of shares (or ETFs) bought or sold has to be a minimum of 100. This can be done via a brokerage’s online services or the broker’s representatives.

When buying into SG shares (or ETFs), we are able to easily check the market price of the shares which is the price the shares are bought and sold at. This is because the shares are listed and traded on the Singapore Stock Exchange. By knowing the market price, we can then decide whether to sell or purchase the shares at the current market price or to wait for our desired pricing which may take a longer time.

When investing in stocks, you have to sign up for a investment brokerage account before you can start your investments regardless of the stocks you want to buy on the SGX. By having a brokerage, it enables you to purchase and sell stocks on the SGX and some brokerage allows you to do so on other stock exchanges. There are many things to take note of when choosing an investment brokerage firm, with commission fee being one of them.

Based on the investment brokerage you have chosen, you may be required to open a Central Depository (CDP) Account, a subsidiary of Singapore Exchange (SGX). It provides integrated clearing, settlement and depository facilities for investors. Certain brokerages allow you to apply for both a brokerage account and a CDP account at the same time. Alternatively, you can apply directly via the SGX website.

Do take note if the brokerage account you have opted for is a prepaid account. If so, you are required to transfer funds into your account before you can start buying shares. In most cases for online brokerages, you can do this conveniently via PayNow transfer or bank transfer.