Saxo slashes commissions – Best Stock Broker now?

By
Financial Horse
-
70

So… Saxo has slashed stock trading commission and FX fees across the board.

 

It’s really, really big news.

Saxo was already one of my top stock brokers for investing sums below US$100,000.

And after this set of changes, I think Saxo has solidified its position as the best stock broker at the US$100,000 AUM.

Tiger Brokers, TD Ameritrade and FSMOne are a distant second after this change.

What did Saxo change?

I’ve set out the changes below, emphasis mine:

Currency conversion fee reduced

  1. Currency-conversion fee between sub-accounts slashed from 0.75% to 0.30%
  2. Free sub accounts, e.g. in SGD and USD, for accounts of any size/balance (up to 4 sub accounts + 1 main account)

SGX equities – No minimum commission

  1. Promotion ‘til 30 April 2021 – No minimum commission on SGX equities, available to all new clients
  2. Commission rate remaining at 0.08%, the lowest rate in the market
  3. Existing clients’ minimum commission on SGX equities halved from SGD 10 to SGD 5

Free live prices

  1. Free live prices on SG, US and other exchanges available by refund, with a minimum of four trades placed each month (six trades on ASX)

No hidden fees, no new fees

  1. Transparent pricing up front, with no hidden fees (no inactivity fee, no platform fee, no maintenance fee etc)
  2. No new fees are being introduced or other fees increased as part of this suite of price reductions

Breaking down the changes at Saxo

The 3 big ones to me, are:

  • Free sub accounts for FX
  • 0.3% FX fee for currency conversion between sub-accounts
  • SGX minimum commission halved

FX fee slashed to 0.3% for currency-conversion between sub-accounts

This one is really big.

Before this, the FX spread for Saxo was on the high side, which led to a situation where some of us had to transfer our own currency into Saxo to save on fees.

For example, if I wanted to trade a USD stock, I may change the USD at Transferwise/Revolut, then transfer the USD into Saxo to get a more competitive spread.

Saxo has slashed their Forex spread from 0.75% to 0.3% for currency conversion between sub-accounts.

For the record, 0.3% is really good, and better than the rates you’ll be getting at Tiger Brokers or FSMOne. It’s even better than the rates at DBS Multicurrency account.

Most of the other options on the market use about a 0.5% spread, so Saxo has become really competitive on Forex after this change.

So now if you want to buy a USD / GBP / HKD stock, you can just fund Saxo in SGD, and convert the currency directly in Saxo itself.

Amazing stuff.

Free sub accounts for FX

In the past, you needed about a $10,000 minimum balance to open a sub account in a different currency.

For example, you can have a SGD main account, and a USD sub account.

This helps because it gives you control over when to convert the forex.

For example:

SGD Account only

If you sell Netflix in the US, the USD will be automatically converted into SGD to be deposited into your SGD account, and you lose a small amount on FX.

SGD Account and USD sub Account

If you sell Netflix in the US, the USD will be credited into your USD sub account.

You can then decide when to convert the USD into SGD, or you can use the USD to buy another stock.

So the sub account is a vastly superior approach when buying foreign stocks.

Now you get 5 accounts for free, which is probably more than you need.

SGD, USD, GBP, HKD are probably the big ones that a Singaporean investor would use.

SGX minimum commission halved

Finally, SGX minimum commission has been halved from $10 to $5 for existing investors.

And for new investors (up till 30 April 2021), there is no minimum commission.

I’ve set out the table of fees for SGX fees above, and after this change, Saxo has become one of the best stock brokers for Singapore stocks.

The 0.08% minimum commission is the cheapest on the market – equivalent to Interactive Brokers and Tiger Brokers.

Versus Tiger Brokers, Saxo is superior because it gives you access to far more markets.

Versus Interactive Brokers, Saxo is superior because Interactive Brokers has a US$10 minimum fee if your account value is below US$100,000, so it really depends on the AUM you’re investing.

How good is Saxo?

After this set of changes, I think Saxo is just the best stock broker at the < US$100,000 AUM price point.

You get:

  • Access to almost any market you can think of (US, Europe, APAC etc)
  • Very cheap stock trading commission
  • Very cheap FX
  • Up to 5 FX accounts
  • No corporate action fee
  • User friendly interface

And, it’s a big Danish bank as well, which does give you peace of mind.

The only gripe is the 0.12% custody fee. But this doesn’t apply to SGX stocks, and to put things in context, it’s $12 on $10,000 a year. You’ll save it back on FX and Fees alone after a few trades.

But I don’t think Saxo will dethrone Interactive Brokers at the > US$100,000 AUM price point though. Once you hit that AUM, the US$10 monthly fee at Interactive Brokers is waived, and I think Interactive Brokers becomes a very solid choice.

But below US$100,000, I think Saxo has solidified its position. I would use Saxo ahead of Tiger Brokers, FSMOne, and TD Ameritrade now.

What you are paying with the local brokers

For comparison though, these are some of the fees charged by some of the local brokers.

Trading Fee: Minimum USD 25 or 0.3% of trading principal (whichever is higher)

Custodian Fee: SGD 2 per counter per month, capped at SGD 150.00 per quarter.

A lot more compared to the USD4 minimum and 0.04%-0.06% trading fee for Saxo.

So yes, if you’re still using one of these accounts to buy US shares, it really is time to switch to Saxo.

Financial Horse x Saxo Affiliate Link

If you’re keen on opening a Saxo account, Financial Horse has partnered with Saxo for a special account opening bonus if you fund $3000 and make 1 stock trade. The link is below, drop me an email at [email protected] for the next steps!

Note: If you’re interested in this bonus, please do make sure you click through the link to open an account!

Referral Link: FH Account Opening Bonus. 

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70 COMMENTS

  4. Hi FH,

    thanks for the article, SAXO really giving tiger and TD a run for their money… I’m having thoughts about opening an account with them after reading the article.

    the main pros are:
    + more mkts than tiger (especially the LSE)
    + better FX rates (0.3% vs 0.5%)

    = Commission rates at 0.08% (same as tiger/ibkr)
    = no min. commission until apr 2021 (same as tiger/ibkr)

    cons:
    -after apr 2021, what’s the min commission?
    -0.12% custody fee ($12 per $10k)

    Do you know if they have plans to keep or revise the no min commissions after Apr 2021?

    • After Apr 2021 min commission for SGX stocks is $5 SGD. Not sure whether it will be extended.

      There’s an account opening bonus if you go with Saxo that will really tip the scales in favour of them though. You can drop an email to [email protected] for the full steps.

  5. Hi FH. How does a custodian fee work? I’m with StanChart right now, so I’m wary of any regular fees I’d need to pay. What is the amount that the 0.12% is calculated from? The AUM at a given point in time? Or the initial amount invested in a stock? If I invest 10k, which then grows to 100k, I’m paying for 0.12% x 100k, yeah? Not the initial 10k.

    Does the number of different stocks I have matter? I’m looking for a broker for the long term, so if this custodian fee gets too big years down the road, that’s far from a good thing.

    • Yes that is correct. So a bit of forward planning is required. If you expect the moneys to grow to 100k soonish, makes more sense to go with IBKR from the get go. 🙂

  6. Hi there, I’m an investing noob. Doesn’t the 0.12% custody fee for $10K add up to $1200, and not $12? Can you please explain why it’s only $12? Thanks!

  9. Dear FH, thanks for sharing the news! As an existing Saxo account holder thru your referral, how do I proceed to create the free FX sub-accounts?

  10. Hello,

    A super newbiz question. Looking at the comparison table above, i notice that for SAXO, it is indicated as “No” for stock being credited to CDP account. Does it means that stock that i buy using SAXO need to be sold using SAXO platform?

    Thanks

  12. Does your referral count as being referred by broker/money manager? According to SAXO’s terms and conditions, Clients that have been referred or introduced to Saxo by an Introducing Broker/Money Manager, cannot count as existing customers for referrals.

    If I use your referral, would I be able to get the existing referral bonus if I refer others in the future?

    • You could change $1 between your FX Sub accounts and note the rates, if you wanted to confirm it before making a bigger FX conversion.

  14. don’t know how much Saxo paid u to promote their product so heavily, their APP is simply sucks, I gave it one start on google play which on average gave it 3.2 points. Horrible APP experience. user experience with Tiger is far more intuitive and convenient, and BTW, Tiger is far behind Futu, which unfortunately haven’t got the license from MAS (so u see, too much protection by regulator results in inevitable high price and poor service).

    • Haha well app usage is very personal. If you dislike it, don’t use it! Tiger’s FX rate will not be as good as Saxo after the change from Saxo though.

  16. Hi FH,

    Great article thanks for informing us I wasn’t aware of these changes. Can I clarify, are you now saying with the forex fee cut, it is now no longer cheaper to transfer USD via TransferWise in my USD sub account? Now it’s just as cheap to convert it within the Saxo platform?

  17. Hi FH, if my main account is in USD but i have a sub-account in SGD, when i transfer SGD using FAST, will it get converted to USD by Saxo or will the SGD land to my sub account instead?

    • Yes website hasn’t been updated. If you do a transfer between your sub accounts you will be able to confirm the latest rates. 🙂

    • Because of the 0.3% rates for sub account transfer, it will be more efficient to create a SGD sub account (free), FAST transfer in as SGD, and convert the SGD to USD via the sub account. 🙂

  20. Thanks FH!

    Will there be any fees incurred for Fast transfer from SGD account into newly sub SGD account in Saxo ? And if I sold my position using my USD account, does it makes more sense to withdraw out from my usd acc or should I transfer into my SGD sub account first ?

    • No fees for FAST transfer if I recall. Yes – you want to use the sub account FX rate rather than the account withdrawal exchange rate.

  21. I still don’t see how with these changes, Saxo is the best. The custody fees (0.12%) really eats into the profits. Say, for a USD100k over 10 years, Saxo versus SC, lump sum of USD10K a year, with SC you will end up paying lower fees.

    • SCB has a poor FX spread though, and higher rates. So you’re paying the money upfront instead of over time (and lose the impact of compounding on the fees).

      It would be interesting to model which has better returns over a 10 year period assuming 7% pa returns, based on your scenario.

  22. hi FH, there have been many complaining about the high currency conversion fee 0.75%, can i clarify is it that after we open a USD sub account, deposit sgd into sgd account and change it to usd in the usd account, there overall currency fee will only be the FX fee (0.3%)?

  23. Hi FH , currently I have USD main account with Saxo . If I open SGD sub account , can I fund deposit SGD into SGD sub account ? Can I withdraw from SGD sub account and any fee ?Thanks

  25. Hello. I noticed that I was charged an exchange rate of 0.75 when I transfer SGD to my USD sub account. Am I doing something wrong to not qualify for the exchange rate of 0.3 ?

    • How did you work out the 0.75%? There might be an error in your calculation if you double count the spread when restating back to your base currency.

      You can also check with Saxo customer support, they will check that you’re getting the right FX rates.

    • Spot rates + 0.3% spread. That’s very competitive, ahead of the rates you’ll get at DBS/Tiger. But IBKR should have better rates because IBKR offers almost spot rates.

  28. Hi FH! Sorry if this question has been asked before. I am currently on a SGD base account and got a bad shock from the obscene conversion fees the last time. Just to confirm, if I open a USD sub account, fund my SGD base account and then transfer the SGD over to the USD sub account, the conversion fee will be 0.3%? If I continue using my SGD base account to buy US stocks, the conversion fee will still be 0.75%?

    Noted that these fee changes are still not reflected on Saxo’s website.

  29. You mentioned above that Saxo does not have inactivity fees. However, the website states that there is a US100 fee if never use for 180 days. Since I am looking to lump sum invest into a S&p500 etf and hold for many years, I will likely incur the US100 inactivity fee. shouldn’t I use TD AMERITRADE instead of Saxo? TDA does not have inactivity fees to punish buy- and- hold investors who do not trade frequently. TDA also does not have custodian fees like saxo. While saxo gives access to Irish domiciled etfs, won’t custodian and inactivity fees add up for saxo such that it makes sense to just buy VOO with TDA?

  30. But Saxo has US100 inactivity fee if never execute any trade for 180 days. And it has 0.12% custodian fee per year. Seems like saxo is not suitable for buy-and-hold investors looking to lump sum invest into a S&p500 etf. Won’t TDA be more suitable? Although saxo gives access to Irish domiciled etfs, seems like custodian and inactivity fees will add up for investors who don’t trade frequently.

  31. Hi FH, love your insights! There is a new brokerage called MooMoo in Singapore that offers commission free trading of US and HK stocks for a year. What is your opinion on MooMoo? Will you now prefer MooMoo for the purchase of US and HK stocks? it does not have custody fees too so it is like a Robinhood. Do you foresee any potential future problems for MooMoo? thanks in advance FH!

    • Very similar views to Tiger Brokers as well. They’re a decently big name in China, but I do have my concerns over their long term strategy in Singapore.

      Definitely okay to put some money in to try it out, but personally, not sure if I would be funding significant chunks of my net worth into those brokers.

  32. Thanks FH! Can I ask what is the USD account withdrawal rate if I transfer to my SG bank account ? As compared to sub account 0.3% transfer fee.

    • It should be 0.75%. Why not just transfer to the SGD sub account and then transfer it out? You get much better FX.

    • Hi Sean,

      Interbank SGD-USD is 0.742, so based on the rates in your screenshot that is a 0.3% spread to interbank?

  35. Sorry I don’t quite understand what do you mean by is the rate 0.742 is a 0.3% spread to interbank. Appreciate if you can guide along.

    • 0.7398 / 0.742 is about 0.997 which indicates you’re paying approx a 0.3% spread against the interbank FX rate. So that’s roughly in line with the 0.3% spread.

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