How does Cash Plus Account flat fees benefit investors? April 27, 2021
At a glance:
- POEMS’ Cash Plus Account offers promotional brokerage rates for US stocks from 1 April 2021 to 31 December 2021
- Custody fees for US and Hong Kong shares have also been waived during the promotional period
- If you are an active investor of US markets or trade US and Hong Kong shares in bigger lots, flat fees are more cost-effective than per-share commissions.
Even since US brokerages, Interactive Brokers and Charles Schwab, did away with commissions for US online trading in 2019, Singapore brokerages have followed suit. As a result, trading commissions have gotten lower and lower. Whether you are a seasoned investor of US stocks or new investor looking to dip into US markets, you will want to maximise your profits and minimise your trading costs.
The good news is, POEMS’ new Cash Plus Account offers promotional brokerage rates for US stocks from 1 April 2021 to 31 December 2021. Custody fees for US and Hong Kong shares have also been waived during the above promotional period (refer to Tables 1 and 2 respectively).
Table 1:
| Cash Plus Starter (less than S$30,000) | Cash Plus Premier (S$30,000 to S$250,000) | Cash Plus Privilege (more than S$250,000) | |
| US shares | US$3.88 flat | US$2.88 flat | US$1.88 flat |
Table 2:
| Cash Plus Starter (less than S$30,000) | Cash Plus Premier (S$30,000 to S$250,000) | Cash Plus Privilege (more than S$250,000) | |
| Waiver of foreign custody fees | Waiver for US and HK markets only | Waiver for US and HK markets only | Permanent waiver for all foreign markets |
Benefits of trading through Cash Plus Account
1. One advantage of trading US shares with flat fees via the POEMS Cash Plus Account is that you are able to ,strong>buy and sell in larger quantities at a lower cost. For big trades, flat fees are more cost-effective than per-share commissions.
2. Another plus of trading US shares using the Cash Plus Account is that there is no additional platform fee or settlement fee per share. A POEMS Cash Plus client enjoys flat brokerage rates regardless of the quantity of shares he or she trades in a single contract. There are absolutely no additional fees.
3. Furthermore, with the waiver of foreign custody fees for US and Hong Kong shares, investors can trade these shares without the need to worry about the cost of holding foreign-market shares.
Note that we are only discussing custodian-type accounts and not trading accounts linked with The Central Depository or CDP. This is because CDP is only able to hold Singapore stocks, not foreign stocks. Foreign stocks are held, instead, in the custodian accounts of your brokerage firm.
Quick comparison of fees: Cash Plus Account vs. other online trades
Table 3:
| Brokers with per-share | Brokers with 0 commission promotion | POEMS Cash Plus Starter (less than S$30,000) | POEMS Cash Plus Premier (S$30,000 to S$250,000) | POEMS Cash Plus Privilege (more than S$250,000) | |
| Brokerage fee | US$0.005 per share min. US 0.99 | US$3.88 | US$2.88 | US$1.88 | |
| Platform fee | US$0.005 per share min. US 1 | US$0.005 per share min. US 1 | – | – | – |
| Settlement fee | – | – | – | – | – |
| Total fees | US$0.01 per share min. US 1.99 | US$0.005 per share min. US1 | US$3.88 | US$2.88 | US$1.88 |
Brokers with per-share in Singapore charge brokerage commissions of US$0.005 per share as well as a platform fee of US$0.005 per share with minimum commission. These charges add to US$0.01 per share and minimum of US 1.99. At a quick glance, this may seem cheaper than trading through a Cash Plus Account but as your trade size increases, the advantage of flat fees will become apparent.
| Traded quantity | Brokers with per-share | Brokers with 0 commission promotion | POEMS Cash Plus Starter (less than S$30,000) | POEMS Cash Plus Premier (S$30,000 to S$250,000) | POEMS Cash Plus Privilege (more than S$250,000) |
| 1 | US$1.99 | US$1 | |||
| 10 | US$1.99 | US$1 | |||
| 100 | US$1.99 | US$1 | |||
| 200 | US$2 | US$1 | |||
| 500 | US$5 | US$2.5 | |||
| 1,000 | US$10 | US$5 | |||
| 5,000 | US$50 | US$25 |
In the above illustration, an investor is looking to trade 100 shares of Palantir Technologies (PLTR.NYSE) at US$22 per share. A per-share commission – inclusive of platform fees – would cost the investor US$1.99. Even with POEMS’ lowest-tier Cash Plus Starter account, a flat rate of US$3.88 would be more cost-effective.
If the investor holds a POEMS Cash Plus Premier or Privilege account, the flat rates of US$2.88 and US$1.88 are even more economical.
Another broker with 0 commission still charges a platform fee of US$0.005 per share with minimum US$1. With same counter, it would cost the investor US$1.
In short, POEMS’ Cash Plus Account offer larger savings if you trade in bigger lot sizes.
With recent competition, commission difference for smaller contracts is marginal difference like less than US$1. Therefore, other factors are important like easy accessibility to call centres, platform capabilities, order execution reliability, good track records and reliability. You may want to choose your broker wisely which entrusts your hard earn moneys.
Do note that the promotional rates only apply for Cash Plus Accounts from 1 April 2021 to 31 December 2021.
For more information, visit https://www.poems.com.sg/cash-plus/ or you may call your respective broker, or our Customer Service hotlines at 6531 1555.
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About the author
Chua Boon Siang
Equities Specialist
Boon Siang holds a Bachelor Degree of Social Science in Economics from National University of Singapore, with a specialization in monetary and financial economics. He is proficient in stock trading using Technical Analysis and has a good grasp of macroeconomics and fundamentals in the SGX market. Apart from providing dealing services, he also conducts training seminars to further introduce financial knowledge to the public..
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