I have gone back to update my previous posts on the brokerage forex spreads as they do change.
These are the spreads at the 3 brokers I use:
- Interactive Brokers - basically equal to spot, just call it a 0.01%
- Standard Chartered - 0.4% (a long time ago it was 1%, then it improved to 0.65%, and now its 0.4% I guess competition is important)
- FSMOne - 0.25%
For completeness Investmentmoats reported in a blogpost that Saxo's charge is 0.75%.
Standard Chartered is a full-service bank so apart from a US$ trading account, I have a Priority Banking USD High Account with USD chequebook (I don't use, they just gave chequebook to all account holders free) and USD Debit Mastercard.
The USD Debit Mastercard is very useful for making online purchases. The 0.4% forex spread is better than regular credit card forex spreads (thats why you can get extra points for overseas spending - you get whacked on the forex spread). And I can spend my US$ dividends using this Mastercard so I don't need to 'withdraw' the US$ into S$ in order to spend it (unlike IBKR and FSMOne - IBKR debit card is not available to SG investors).
The SCB USD Debit Mastercard has 2% cashback which more than offsets the forex spread anyway. Overseas transactions incur a 1% charge so nett the cashback is 1% unless you use paypal SG for the transactions. Paypal SG is considered local transaction so no overseas charge and full 2% cashback - always pay by Paypal if possible!
Frankly, I wouldn't get hung up about the small differences in charges. What is important is to start investing! During the GFC I had to pay $28 for each trade... if i was so paralysed by trading comms I wouldn't have made the returns that I did.
too right. i noticed that sometimes the scb rate can be 0.20%
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