Smart Millennials Series #7: Opening a CDP account and Stock Trading account in Singapore
What is a CDP Account?
A brokerage account is a type of account which allows you to buy and sell your investment products, mainly stocks, exchange-traded funds (ETFs), real estate investment trusts (REITs), and certain bonds.
Brokerage accounts act as a middle platform that allows you to invest through it.
In Singapore, one will need a CDP account and a brokerage account to invest.
Before opening a brokerage account, one needs to open a CDP account first.
The Central Depository Account, or commonly known as CDP, is an account to safe keep all the shares you bought through the open market.
Operated by the Singapore Stock Exchange (SGX), a CDP acts as a safe for all your stocks.
Stocks and bonds that one buys on the SGX are deposited into his personal CDP account.
How to Open a CDP Account?
Step 1: Have a bank account with local bank
To open an individual CDP Securities Account, one is required to have a bank account with one of the following banks in Singapore:
Citibank
DBS/POSB
HSBC
Maybank
OCBC
Standard Chartered Bank
UOB
Do also note that one needs to be at least 18 years old and not an undischarged bankrupt before he goes on to the next step.
Step 2: Sign up using Myinfo or fill up an online application account
There is now a faster method to open your CDP account.
Since November 2019, you can choose to open a CDP account online and get your account sorted out within 15 minutes.
Step 3: Have the required supporting documents
Before you dive in and start filling up all the information in the application form, ensure that you have these supporting documents with you.
There will be official information that you need to submit when opening a CDP account.
Here’s a set of supporting documents you need when opening your CDP account:
Your NRIC/ Singapore Armed Forced Identity Card/ Singapore Police Force Identity Card/ Malaysia Identification Card/ Passport
One of the following documents or e-statements (dated within the last 3 months) – Bank statement from any Monetary Authority of Singapore (MAS) licensed banks; or – Central Provident Fund (CPF) statement; or – Latest Notice of Assessment for Income tax
A Singapore Bank Account
Photographed/ Scanned copy of your signature
Tax Identification Number (TIN) for tax residency status outside Singapore – Country/ Region of Tax Residency
Tax Identification Number (TIN)
Completed Form-W9
For application through a broker, the supporting documents needed are:
Photocopy of NRIC/ Singapore Armed Forced Identity Card/ Singapore Police Force Identity Card/ Malaysia Identification Card/ Passport
How to open stock trading account?
option 1:
1. Open a cash trading account with a securities broking firm and link it to a CDP account
Transactions on your stocks and securities listed on Singapore Exchange (SGX) will be deposited to your Central Depository Account (CDP). In other words, purchases of your stocks and securities listed on SGX that you have purchased will be deposited into this account. It serves as safe keeping of your stocks and securities you have purchased.
This account also provides integrated clearing, settlement and depository functions for account holders.
After you have opened your trading account, you can place your order for stocks and securities transactions through the securities broking firm that you open the trading accounts with.
Option 2:
2. Open a sub-account with a securities broking firm
You can choose to have your stocks and securities purchased to be held under a nominee account of the securities broking firm. All transactions will have to go through the securities broking firm where you have opened the trading account with.
Your buy and sell orders for shares and other types of securities are submitted through a securities broking firm. If the trade is executed, you pay a commission either to the firm or its dealer. Securities broking firms provide traditional broker-assisted services as well as online trading platforms for self-trade.
These are the 10 securities broking firms who are members of the Singapore Exchange you can choose from:
CGS-CIMB Securities International Pte. Ltd.
DBS Vickers Securities
iFAST Financial Pte. Ltd.
KGI Securities (Singapore) Pte. Ltd.
Lim & Tan Securities Pte. Ltd.
Maybank Kim Eng
OCBC Securities
Philip Securities Pte. Ltd.
RHB Securities Singapore Pte. Ltd.
UOB Kay Hian