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Save 50% of your brokerage fee and store your shares for FREE at CDP

Posted on by careyourpresent

Custodian VS CDP

There were many interesting discussions in Investingnote on using FSMOne buy shares and then transfer to CDP for free.

I always thought many people know about this hack long ago.

I guess I was wrong.

In simple summary, just buy shares using FSMone, pay 50% less in commissions as traditional brokerages (for both Joint with Beneficiary account or personal account in FSMone) and then fill a form to transfer the shares to CDP for free or until FSMone remove this “free”. But this has been there for years! Hope they don’t remove. If FSMone saw this, please continue to have this feature 🙂

For the benefits of everyone, let me repost the articles that I have posted before.

—–I took this part from my old article —–

Background

Many people love to trade Singapore Stocks and for the safety of your stocks, many would prefer to keep their shares in the Central Depository (Pte) Limited (CDP) instead of Custodian with the brokerages. However, the commissions are not cheap if you trade with traditional brokerages that are linked to your CDP. Hence, the most natural question that came to most people mind would be:

What would be the cheapest and best way to trade Singapore Stocks while still keeping your shares in CDP?

What is Central Depository (Pte) Limited (CDP)

The Central Depository (Pte) Limited (CDP) was established in 1987 and is a wholly owned subsidiary of SGX. CDP provides integrated clearing, settlement and depository services for a wide range of products in the Singapore Securities Market. In the realm of securities trading, the Central Depository (CDP) of Singapore plays a vital role in ensuring the smooth functioning, efficiency, and security of the market.

The Central Depository (CDP) serves as a trusted custodian and clearinghouse for securities traded on the Singapore Exchange. It acts as a central registry, holding and safeguarding securities such as stocks, bonds, and treasury bills, in an electronic form. Through its infrastructure, the CDP facilitates the settlement, transfer, and safekeeping of securities, providing investors with a reliable and efficient platform to buy, sell, and hold their investments.

How it work?

Before one can buy/sell any shares/bonds that listed through Singapore Exchange, investors need to open a personal CDP account or joint CDP account with someone.

If you buy/sell any Singapore shares through traditional brokerages (such as Poems, Lim & Tan, DBS Vickers, iOCBC etc that is link to your CDP accounts), the brokerages will become the middleman in the selling/buying process, but your shares would be transferred/stored via your personal/joint CDP. You can buy using brokerage A, store shares in CDP, then sell your shares using brokerage B.

This is something very unique in Singapore Context because overseas shares are stored via custodian accounts with the brokerages such as Interactive Brokers, Saxo, Moomoo, Webull etc. One can only buy/sell through the custodian brokerages that your shares are with.

CDP is something very unique in Singapore Context. For oversea shares, definitely, the shares will be stored with the custodian brokerages.

By right, these brokerages would provide separate account for the investor, segregated from the company’s accounts. Hence, in the unlikely scenario of any bankruptcy of the custodian brokerage, your shares would still be safe. However, in real life, it may or may not happened.

However, as a more conservative investor, most would prefer to store their shares via CDP. However, with new brokerages operating in Singapore, one has another option to opt and use these brokerages instead of through CDP.

Why so?

The main reason(s) would be the commissions.

If one use traditional brokerages, one would need to pay about $35 commissions for a trade of around S$1 to S$9000. Yes, you didn’t see wrongly, $1. Hence, minimally one would need to make each buy around $9k to make the commissions worth it.

With the new companies such a WellbullSG, Moomoo, Tiger on board, one can buy very little Singapore shares with little commissions, but what is the catch?

I am not sure about you, personally, I prefer to keep my shares that I want to keep very long term with CDP such that buy/sell the shares with any CDP link brokerages. However, I also want to have my cake and eat it too! Hence, what is the solution?

—–I took this part from my old article —–

The Hack!

Everyone knows that many of the brokerages offering buy shares and kept in their custodian. But for many investors, many would prefer to put them to CDP.

For all the normal brokerages that link to CDP (means the buying and selling will be in CDP), every normal transaction of 10k worth of shares would cost about $30+ per transaction. However, if one use other brokerages like Tiger, Webull, Moomoo etc, the shares would be stored at their custodian account although the fees are much cheaper.

Best of Both Worlds

Is there the best of both world? Cheaper fees but shares still stored in CDP?

There are two options:

  • Method 1: Use DBS Vickers Upfront account. But this method can only be use for personsal CDP account. For those with Joint account CDP, this doesn’t work.
  • Method 2: Use FSMone to buy the shares. Then transfer to CDP for free (until FSMone change the rule). You will get cheaper commission of around $12-15+ per $10k purchase. Of course, the comms is $8.80, thus if you buy more, it would still be very cheap.

How to get this?

You can read some of my previous posts on this:

You can read the full write up here:

Cheapest and best way to trade Singapore Stocks with CDP

And the follow up posts here!

$0 Free of Charge Transfer of SGX Shares from FSM to CDP and updates! – Done in less than 3 days!

$0 Free of Charge Transfer of SGX Shares from FSM to CDP and updates!

Simplified Guide to the Key Gist of Grant of Probate and Estate Planning

Hope this hack has helped you save Money!

Deal 1:

Webull – Get free money!

Good deal! Do not miss this! Sign up here now for free money!!

Deal 2:

Trust Bank New Clients → Free SGD$35 FairPrice Vouchers

  • Sign up using referral code KNDBPEPT (Free $10 FairPrice E-Voucher). Key in this code after you download the Trust Bank App from Trust Bank Website
  • Receive a S$25 FairPrice E-Voucher from your first card spend as a credit card customer or when you make your first S$500 deposit for Savings account
  • Many other attractive vouchers in the app – refresh every month
  • No minimum balance account and can earn up to 2.5% for the first 125k
  • No foreign transaction fee, great exchange rates when overseas. See my review via Trust Card – Excellent Card for overseas usage.

Deal 3:

FSMone – Cheap Comms and can transfer your shares to Personal/Joint CDP for Free

I am using FSMOne.com to invest in funds & ETFs (including money market funds). FSM is good due to the low comms and the free transfer from FSMOne to CDP (typically takes less than a week to transfer). If you do not have an account, you can sign up here. Please use my FSMOne referral code: P0413007.

Deal 4:

Eskimo – Best Option for Roaming!

For now, you can get 500MB for free just by signing up with my referral link, no purchase required (I get 500MB only too, but only if you buy a paid plan). Referral code: CHING104915

You can read my review here.

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Category: Investment and Finance

2 thoughts on “Save 50% of your brokerage fee and store your shares for FREE at CDP”

    1. yes. Worth it.

      But I also see it from estate point of view.

      In case some unfortunate event happened to me, my cdp is joint account with spouse.

      Hence preferred to put in cdp.

      Additionally, once I put cdp, less tendency for me to sell. Buy sell buy sell I do via FSMONE, for those buy and keep I will transfer to cdp.

      Reply

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