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Choosing the right broker

How to choose stock broker Malaysia

After knowing the difference of CDS account, you might now wonder which broker should you go for? In the market, there are nearly 20 brokers that offer their services.

While choosing for the right broker, several factors that need to be considered include:

  1. Trading fee
Whenever a transaction is made, no matter is to buy or sell a stock, one must pay for trading fee. This trading fee is made up of three kinds of fee – brokerage fee, clearing fee and stamp duty. As name implied, brokerage fee charges differs based on the broker themselves. Hong Leong for example, offer a competitive rate of 0.10% while Public Bank offer a rate of 0.42%. Clearing fee is fixed to be 0.003% while stamp duty is RM1 per RM1000 of transaction value.
  1. Trading limit
A trading account is opened in default as cash upfront type. This means that the maximum amount of trading is limited by the cash in the account itself. Another type of account is known as collateralize account, which the trading limit could be up to 2x, 3x or even 4x of cash. However, this comes with a higher trading fee of normally up to 0.42%.
  1. Ease of payment / withdrawal
How convenient is it if you want to transfer money into and out from the account? Certain broker such as Hong Leong and CIMB allow online payment. While some doesn’t. The other methods include direct bank in through cash or cheque and fund transfer.
  1. Quality of online trading portal
The ease to use a broker’s online trading portal is also very important. Certain portal often experiences downtime. Imagine yourself experiencing this when you want to do a transaction.
  1. Accessibility and readiness of customer service
Last but not least, personally, I prefer to choose a broker which has a better reputation and more widely known by the public. This is because such company are more reliable. Furthermore, one should also try contacting the broker and see how efficient they are in answering phone and clearing your doubts. You definitely wouldn’t want to have a broker that will only answer your call after 5th attempts.

For comparison, please refer to http://klse.i3investor.com/jsp/hti/brokers.jsp.

Personally, I am using HongLeong Value Trade account.

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