In this post,i am going to show how to set up a brokerage account with interactive broker.
So, why choose Interactive Broker(IBKR) as a brokerage?Pros
- Good customer service, asked some queries on the account fee using the chat interface and was answer promptly
- Fees of USD 0.005 per share or min $1.00 USD (Cheapest stock brokerage for Singaporean investors to invest in US Stock Market)
Cons
- Singaporean are only able to invest other country stock(US and UK) and cannot use IBKR to invest in Singapore stock
- Must transfer money to your custodian bank account assign to you and they will update your account balance(Updating of balance in the account generally takes an hour not immediate)
- An activity fee of min $10 per month,if your account is below $100,000(This mean that you will have to trade 5 time per month due to the min comission of $1.00)
Onto the step by step guide on how to set up a brokerage account with interactive brokers!
1.Go to https://www.interactivebrokers.com.hk/en/home.php
2.Click on Open account(red circle)
3.A popup box will than appear.Under individual,joint or IRA Account,click Start application
4.You will be brought to a page for creating a username and password.Fill in the email address, username,password and confirm password.Under Country/region,select your residental country.Then click Create Account
5.Go to your mail inbox.You will receive an account confirmation in your mail as shown below ,click verify account
6.You will be brought to this page below.Under the complete a started application,enter the username and password that you have key in earlier and click login
7.Under customer type,select individual and base currency to the currency that your country is in(in my case,i select Singapore).Simply select of the option listed,for how did you hear about us.Then,click continue.
8.You will be brought to the pesonal information page.Fill in your saluatation,first name,middle name,last name,suffix,date of birth ,gender,marital status,number of despondents.
9.Fill in your address #1 and #2,city, state/province,zip/postal code.You do not need to change the default option for the remaining question such as(Do you have a different mailing option?)
10.Fill in your phone number,country issuance,Identification type,Identification number
11.Under tax residency,Select your country and enter your tax identification number(For singaporean,enter your nric number).Then select your employment and leave the default option as no for "Do you have additional sources of income?"
12.Enter your account information(More will be explained later) and also key in the respective security question.
Cash or margin account?
- Will not short mistakenly
- Have to wait T+2day for money to settle.Hence, no day trading.
- You may accidentally leverage or short the stock
*these are just some pro and con that i can think on top of my headPersonally ,I use a margin account as interactive broker has a requirement of min $10 activity fee(including commission) per month and its has a commission fee of $0.005/share or min $1.00 ,whichever is higher.This mean that I must make a minimum of 5 trade per month(buy stock $1 commission, sell stock $1 commission). By the way ,do you know that exchanging your local currency to usd also count as $1 dollars commission?13.Leave the default option for regulartory information as it is.Enter your net worth,liquid networth and annual net income14.Check the investment objectives,select any options15.Select Yes for stock and the respective investment product you wish to trade(e.g Forex,bonds).Do not worry too much as the investment product can be change .Fill up the years trading,trades per year,total trades and knowledge level16.Select the countries that you would like to trade in(Can be changed after you set up your account)17.Fill up the Substitute Form W-8BEN if you are a non-US tax resident individuals.Remember to select the option “I am not a resident in a country with a US tax treaty”18.Select agree to all19.Next,you will have to enter your mobile, upload the respective identity documents.20.You can fund your account after your account has been approved,hence there is no hurry in funding your account(Will touch on how to transfer money from your bank to fund your IBKR in the next few post)Credits mostly to lazybutintelligentinvesting for most of the pictures,do look out for my future post!.Thanks for reading!
