Why I decided not to use 8 Securities

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This post is a continuation of my post dated 23 July 2017 (see below).

  • 8 Securities: Broker to trade US and Hong Kong Stocks (read here)

So yes, 8 Securities does not have holding fees, if I am to buy and hold Hong Kong or US stocks (being a foreigner not residing in HK or US respectively buying these stocks).

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I have always been doubtful as to how do 8 Securities earn any commission by not having any holding fees. So I decided to do a small experiment.

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Well, I did not actually buy or sell stocks using 8 Securities. My experiment is very simple. I simply transfer USD 50 to and from my 8 Securities account.

So on 7 Aug 2017, I transferred USD 50 from my local bank account to 8 Securities account. Now the exchange rate if I am not wrong (converting from USD to SGD) is USD 1 = SGD 1.36. So USD 50 = SGD 68.

I was notified when transferring online, to pay a transfer fee.

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Below, is the statement from my bank account after the transfer. Note that there is another SGD 64.28 on top of the actual amount (SGD 68.55) transferred.

07 Aug 2017 FUNDS TRF – TT
8 Securities Limited
SGD 68.55
07 Aug 2017 SERV CHARGE
8 Securities Limited
SGD 64.28

Now, after I am sure that the amount of USD 50 is reflected in my account, I selected the option to withdraw the amount (without doing a single trade. Then again, what can I buy with USD 50 :p).

book.pngI received a phone call from 8 Securities shortly on the next day, asking me if I am certain about withdrawing the amount. And was told that there would again be a fee. I can’t remember the percentage (or absolute amount).

However, the eventual deposit amount I received after the fee is only SGD 37.38 (see below table). Well, the exchange rate might have changed, but not by much. So in effect, just by transferring USD 50 (to and from 8 Securities), I had to pay approx. SGD 95.45 (or USD 70).

I reckon to transfer a larger sum would involve a much larger sum (fee).

25 Aug 2017 INWARD TRF – TT
8 SECURITIES LIMITED-CLIENT ACCOUNT
SGD 37.38

What initially attracted me to 8 Securities was the below 3 key points:

  1. Stocks in 8 securities will be held in a nominee account without any holding fees. 
  2. No minimum trading activity fee.
  3. No minimum deposit requirement.

However, after weighing the transfer fee, I decided not to use 8 Securities.

I reckon, the fee of SGD 2 per counter per month for using a Singapore Brokerage to hold US or HK stocks may not be that great (in comparison to 8 Securities’s transfer fee).

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About apenquotes

Born in 1976. Married with 2 kids (a boy and a girl). A typical Singaporean living in a 4 room HDB flat. Check out my Facebook Page: https://www.facebook.com/apenquotes.tte.9?ref=bookmarks
This entry was posted in Hong Kong Shares, Portfolio, US Stocks. Bookmark the permalink.

18 Responses to Why I decided not to use 8 Securities

  1. Green Cow says:

    Hi,
    It’s me again.

    Isn’t it obvious? You are doing a TT from USD/HKD > SGD. Hence there will be charges by HK bank.. It’s normal. SGD64.28 = HKD368.500
    https://www.personal.hsbc.com.hk/1/content/hongkongpws/pdf/bank_tariff_new.pdf
    http://www.bochk.com/en/servicecharge.html (see outward remittance)

    Not to mentioned, your second screenshot is most likely a second charge by the receiving bank. (you get charge from HK side and SG side – that’s normal). If you don’t want to get charge from SG side, use Cimb. The only bank which don’t charge you money for incoming TT.

    The best way is 8securities > HK bank account > Transferwise > SG bank account. You won’t get charge so much. The only part you will lose money is at the Transferwise section. That’s also in few dollars.

    Alternatively, use FSM for HK brogerage, withdraw out in cheque and deposit into a local multicurrency account/HKD foreign currency account. This is free. No charges.

    Hope this help.

    Like

    • apenquotes says:

      Thanks for the advice.

      Like

    • SipandInvest says:

      So to clarify, depositing funds into 8securities has an extra charge by the HSBC/BOC but not 8securities?
      and withdrawing funds to my an Overseas bank has no fee but might get charged by the overseas bank for receiving the money?

      Like

    • apenquotes says:

      My question is – as a foreigner, is can I open a HK bank account from overseas (eg. when I am in Singapore). I think not. It would probably be same as my experience in trying to open a US account from Singapore as a Singapore citizen/resident.
      I reckon I would need a valid ‘green card’ / be a permanent resident to so in HK itself.
      Generally, the banking sectors in various countries are fragmented .. either because of security issues / geo-political agendas ( I dunno).
      And I am curious, Geen Cow – are you a Singaporean staying in Singapore? Or a Hong Konger staying in HK?

      Like

  2. Green Cow says:

    The other alternative is use Interactive broker. Convert the USD/HKD > SGD at near spot price and pay straight into your SG bank account. But beware the USD10/month inactivity fees if you have < USD100k with them.

    Like

  3. Jon says:

    Hi there did you try using DBS remittance service? I used that and no additional charges, purely convert SGD to HKD however using DBS FX rate which would have accounted for some spread alr. Hope this helps. I actually kind of like 8Securities low fees and user interface.

    Like

  4. Ken says:

    Dear apenquotes, thank you for taking the time to post feedback. It is always helpful and we take all of it seriously as we strive to make Tradeflix better. Please understand that 8 Securities in no way benefits from foreign exchange fees. That is a fee applied by the bank and we do not have control over it. Our cost to execute a trade is virtually zero and we pass that benefit to our customers with $0 commission. We earn no income on the order flow of our customers. So how do we make money? We will launch an optional margin lending service for active traders in the near future and we earn a little interest income on your cash deposits. Thats it. http://www.8securities.com

    Like

  5. SipandInvest says:

    Hello, just an FYI and an update
    I was able to talk to the customer service. I am from the Philippines and is planning to open an account too. for the benefit of your blog, I was informed the Overseas charge is 200hkd charged by the HSBC bank.
    and the only way to avoid the fee is if you have a Hongkong BOC or HSBC account. The free transfer is basically only for HK and people living overseas will have to deal with expensive wire deposit fees.

    So much for what they advertised. Not FREE at all.

    Like

  6. YJ says:

    Hi apenquotes,

    So which broker you use to trade HK stocks now?

    Like

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