If you want to invest using your CPF Investment Account (CPFIS) or Supplementary Retirement Scheme (SRS) funds, you can choose between our Cash Plus Account and Cash Management Account. Both account types allow you to trade using your CPF/SRS monies. Read on to find out how they differ!
Cash Plus Account
Cash Plus Account offers a significantly lower brokerage rate of 0.08% with no minimum commission for trading on the SGX market. To place a BUY order, you will need to prefund your account with cash. A minimum of 50% of the expected trade value* is required as buying power before a trade can be placed or submitted online.
The good news is that cash is only required temporarily. Once the CPF/SRS trade is settled, the prefunded amount can be withdrawn or used for the next trade. This could potentially result in significant cost savings for smaller trades and Dollar Cost Averaging (DCA) strategy!
*Full amount is required for non-marginable counters
Cash Management Account
Cash Management Account offers greater convenience as no prefunding is required. We will increase your trading limit after reviewing your CPF/SRS statements. This allows you to place trades directly using the approved trading limit. However, the brokerage fee is higher at 0.28%, subject to a minimum commission of S$25.
Example:
BUY 100 shares of DBS at S$64.38 per share
Trade Value: S$6,438
Under Cash Management Account:
- Approx. Brokerage Fee: S$25 (Minimum commission applies)
Under Cash Plus Account:
- Approx. Brokerage Fee: S$5.20
By prefunding the required amount on Cash Plus Account, you could save approximately SGD 20 on brokerage fees for this trade alone.
Which account should you choose?
If you are comfortable prefunding your account with cash, the Cash Plus Account can help you reduce trading costs substantially. The prefunded cash can be withdrawn after the CPF/SRS transaction has been settled.
If you prefer the convenience of trading without prefunding, Cash Management Account may be more suitable, although the brokerage charges will be higher.
For investors looking to minimize trading costs, the Cash Plus Account is generally the more cost-effective option.
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