3 Step Guide to Start Investing in Singapore


When I first started investing in the stock market in Singapore, quite a few of my friends were curious about the process to start investing in Singapore. Thus, I decided to write this article to show a simple 3 step guide to start investing in the Singapore stock market.

1. Open a CDP account

The first step to start investing in the stock market in Singapore is to open a CDP account. A Central Depository Account (CDP) is an account to store all the shares you bought through Singapore Exchange (SGX). It is operated by SGX and acts as a save for all the stocks that you bought. You can apply for a CDP account online here.

2. Open a Brokerage account

The second step is to open a brokerage account to access and buy the stocks listed in the SGX market. There is a wide variety of brokerage accounts to choose from online. The top 3 most popular brokerage accounts in Singapore are OCBC securities, DBS vickers, and Standard Chartered trading account. OCBC securities and DBS vickers have similar transaction fees starting at a minimum of $25 plus additional fees depending on the volume of shares you bought. The stock bought through OCBC securities and DBS vickers would be stored in your CDP account. On the other hand, Standard Chartered trading account only charges a minimum transaction fee starting from $10 plus additional fees depending on the volume of shares you bought. The catch is that stocks purchased through Standard Chartered trading account would not be stored in your CDP account but in a custodian account instead. This means that technically Standard Chartered has ownership of the stock on behalf of you. To put it simply, if Standard Chartered were to collapse one day like Lehman Brothers, the stocks that you purchased through them would be gone.

3. Research and decide what kind of investing suits you

Lastly, you should always do your research online and decide what kind of investor are you before you start investing. There are many ways and strategies to invest in the stock market. You should always do your due diligence before diving head in the stock market (It is very easy to crash and burn). Do you prefer dividend or growth stocks? Do you prefer to do active trading or hold long-term? My advice is to take your time and go online to do some research and reading to decide for yourself before you purchase your first stock on SGX. It is important to know what you are doing and what you are trying to achieve in the stock market. After all, the legendary investor Warren Buffet once said 'The No.1 rule of investing is to not lose money'. 


 

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