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
- Currency-conversion fee between sub-accounts slashed from 0.75% to 0.30%
- 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
- Promotion ‘til 30 April 2021 – No minimum commission on SGX equities, available to all new clients
- Commission rate remaining at 0.08%, the lowest rate in the market
- Existing clients’ minimum commission on SGX equities halved from SGD 10 to SGD 5
Free live prices
- 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
- Transparent pricing up front, with no hidden fees (no inactivity fee, no platform fee, no maintenance fee etc)
- 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.
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.
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.
- 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.
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.
Share your comments below!
Support the site as a Patron and get access to my personal stock watch list, as well as my personal portfolio allocation.
Join our Facebook Group to continue the discussion, everyone is welcome!
Looking for a comprehensive guide to investing that covers stocks, REITs, bonds, CPF and asset allocation? Check out the FH Complete Guide to Investing.
Or if you’re a more advanced investor, check out the REITs Investing Masterclass, which goes in-depth into REITs investing – everything from how much REITs to own, which economic conditions to buy REITs, how to pick REITs etc.
Both are THE best quality investment courses available to Singapore investors out there!