All Posts
More
[Investing for Beginners] Introduction to US Stock and Securities Account Fee Comparison

[Investing for Beginners] Introduction to US Stock and Securities Account Fee Comparison

All Posts » Start Investing

October 11 • 4 min read

語言: 廣東話

The political and economic instability in Hong Kong has weighed on the city’s stock market. More Hong Kong investors are switching to higher-achieving US stocks among which ETFs are one of the most popular choices.

However, before opening a US stock account, there are a few rules that amateur investors must know. Read on learn the basics of the US stock market and have a fee comparison of the most commonly used US stock securities accounts in Hong Kong!

Minimum fees to buy US Stocks

Hong Kong stocks’ minimum trading unit is a “lot”, the number of shares in each “lot” usually ranges from 100 to 2,000.

Let’s say you want to buy HSBC Holdings (0005) stocks. They have a minimum lot size of 400 shares. If each share costs HKD 58, the minimum account of money to buy a lot of HSBC Holdings (0005) would be over HKD 23,000 (400 shares x HKD 58 plus transaction fees).

In the US, however, the minimum trading unit of US stock is a “share”.

Take Apple Inc. (AAPL) as an example, their stock price was around USD 220 (~HKD 1,716) in October 2019 so you could start investing with just HKD 1,716!

Because of this, generally, the minimum amount you need to invest into US stocks is much lower than Hong Kong stocks.

Buying US stocks is pretty easy in Hong Kong as most banks provide US stock accounts but the fees are MUCH lower if you buy it through securities firms or robo-advisors.

These transaction costs can add up really quickly, are easily avoidable and offer no value to an investor – so just pick the broker or company with the lowest costs (based on your trading habits).

HK Market
US Market
uSMART Securities
Custodian Fee
HKD 0
Avg. Trade Cost
HKD 8
Welcome Offer: New clients who successfully open an account via Planto promotion page from Jun 1 to Jul 31 2021, both dates inclusive ("the Promotion Period") with the first time deposit, and fulfil all certain requirements will be eligible to redeem a maximum of HK$4,600 welcome reward: 1. The newly registered clients can reward HK$600 cash promotional coupon; 2. 4 shares of Nongfu Spring (09663.HK);
See more
Latest Offer: 【Limited Time Offer】 From now to 30 June, customers who receive COVID-19 vaccinated & completed the online account registration, they can redeem the correspondence stock coupon; if she/he receives at least one dose of Sinovac vaccine, they can redeem 35 shares of Sino Biopharm (1177.HK) stock coupon: if she/he receives at least one dose of BioNTech vaccine, she/he can redeem 1 share of Pfizer (PFE.US) stock coupon *Applies to newly registered customers who have received the vaccine.
See more
See more
uSMART Securities
Custodian Fee
HKD 0
Avg. Trade Cost
HKD 12
Welcome Offer: New clients who successfully open an account via Planto promotion page from Jun 1 to Jul 31 2021, both dates inclusive ("the Promotion Period") with the first time deposit, and fulfil all certain requirements will be eligible to redeem a maximum of HK$4,600 welcome reward: 1. The newly registered clients can reward HK$600 cash promotional coupon; 2. 4 shares of Nongfu Spring (09663.HK);
See more
Latest Offer: 【Limited Time Offer】 From now to 30 June, customers who receive COVID-19 vaccinated & completed the online account registration, they can redeem the correspondence stock coupon; if she/he receives at least one dose of Sinovac vaccine, they can redeem 35 shares of Sino Biopharm (1177.HK) stock coupon: if she/he receives at least one dose of BioNTech vaccine, she/he can redeem 1 share of Pfizer (PFE.US) stock coupon *Applies to newly registered customers who have received the vaccine.
See more
See more
Webull
Custodian Fee
HKD 0
Avg. Trade Cost
HKD 10
Welcome Offer: Customers applying via Planto are entitled to enjoy the below welcome offers that are valued up to HKD1,000: • 【Webull New Account Offer】HKD0 commission, 1 stock of Alibaba and 1 stock of JD.com Inc when new users open an account and make at least one Hong Kong stock transaction • 【Webull Reservation Reward】Reservations are now open for accounts supporting both Hong Kong and US Markets. Get a free US stock valued at US$50 + 6-month US market quotes within 30 days after the above said account is opened and once a US stock transaction is made. Old customers will get 12 months access to US market quotes upon successful appointment.
See more
See more
Fuyuan Securities
Custodian Fee
HKD 0
Avg. Trade Cost
HKD 0
Welcome Offer: New customer via Planto is entitled to enjoy the below welcome offer:
See more
See more
See more
Fuyuan Securities
Custodian Fee
USD 0
Avg. Trade Cost
HKD 15.5
Welcome Offer: New customer via Planto is entitled to enjoy the below welcome offer:
See more
See more
See more
Futu Securities
Custodian Fee
HKD 0
Avg. Trade Cost
HKD 15
Welcome Offer: Apply via Planto and be eligible for HKD 100 supermarket coupon and 1 free share of AAPL after depositing HKD 10,000. *(Daily average asset of HK$10,000 or above must be maintained for 60-days). [Stock transfer offer] New customers who successfully transfer stock into their Futu accounts are eligible for HKD300 supermarket coupon.
See more
See more
Futu Securities
Custodian Fee
HKD 0
Avg. Trade Cost
HKD 15.5
Welcome Offer: Apply via Planto and be eligible for HKD 100 supermarket coupon and 1 free share of AAPL after depositing HKD 10,000. *(Daily average asset of HK$10,000 or above must be maintained for 60-days). [Stock transfer offer] New customers who successfully transfer stock into their Futu accounts are eligible for HKD300 supermarket coupon.
See more
See more
Valuable Capital Limited
Custodian Fee
HKD 0
Avg. Trade Cost
HKD 15.5
Welcome Offer: Until June 30th 2021, the following will be offered by Valuable when new customers: • Open an account online: HK$600 cash coupon and HK$300 IPO coupon • Transfer stocks worth HK$10,000 or above to Valuable : HK$300 cash coupon • From 1 June – 11 June, free iBond subscription fee on VBrokers App • Deposits HKD20,000: Real-time streaming quotes (worth HK$288/m) for HK stocks for 30 days. After 30 days, the real-time streaming quotes continue if your average assets or month-end assets reaches HK$50,000, and you trade 10 times per month in the HK market • Up to 95% margin service with least 1.6% interest rate for IPO subscriptions
See more
See more
Valuable Capital Limited
Custodian Fee
HKD 0
Avg. Trade Cost
HKD 15
Welcome Offer: Until June 30th 2021, the following will be offered by Valuable when new customers: • Open an account online: HK$600 cash coupon and HK$300 IPO coupon • Transfer stocks worth HK$10,000 or above to Valuable : HK$300 cash coupon • From 1 June – 11 June, free iBond subscription fee on VBrokers App • Deposits HKD20,000: Real-time streaming quotes (worth HK$288/m) for HK stocks for 30 days. After 30 days, the real-time streaming quotes continue if your average assets or month-end assets reaches HK$50,000, and you trade 10 times per month in the HK market • Up to 95% margin service with least 1.6% interest rate for IPO subscriptions
See more
See more
Saxo Markets
Custodian Fee
HKD 0
Avg. Trade Cost
0.08%
(min. HKD 40)
See more
See more
Saxo Markets
Custodian Fee
From 0.06% p.a.
(min. HKD 38)
Avg. Trade Cost
From HKD 0.05 / share
(min. from HKD 23)
See more
See more
Charles Schwab, Hong Kong, Ltd.
Custodian Fee
USD 0
Avg. Trade Cost
USD 0
See more
See more

Custodian Fee
Avg. Trade Cost
BOC Hong Kong
HKD 100 - 150
per half year
HKD 0.16 / share
(min. HKD 140)
BOC Hong Kong
Custodian Fee
HKD 100 - 150
per half year
Avg. Trade Cost
HKD 0.16 / share
(min. HKD 140)
HSBC
HKD 25 - 30
per month
> HKD 140
per trade
HSBC
Custodian Fee
HKD 25 - 30
per month
Avg. Trade Cost
> HKD 140
per trade
Citibank
Free
HKD 100 if inactive for 6 months
0.5% - 1%
(min. HKD 230)
Citibank
Custodian Fee
Free
HKD 100 if inactive for 6 months
Avg. Trade Cost
0.5% - 1%
(min. HKD 230)

Like we said, it's cheaper to start investing with a broker and you get a much better user experience.

How to start investing in 3 steps

1
Open an account
You can open an account with most brokers 100% online and it only takes about 10 minutes. In most cases, you will need your HKID and address proof and that's about it.
2
Transfer money in
Once your account is opened, you can transfer money through bank transfers or even FPS. You'll need to deposit HKD 10,000 if you want to verify your account online (but otherwise, you can visit them in person!). Your money will usually be received within the same day.
3
Start investing
Once the broker receives the money and your account is verified, you can start investing - that's literally it!

US Stock Exchange Fees and Taxes

Apart from commissions and platform fees charged by banks and securities firms, investors will also be charged by US regulatory authorities. Yet, it is still generally cheaper than buying Hong Kong stocks. The main fees are as follows:

Charged Items Fees (in USD)
SEC Fee* Adjusted seasonally, commonly varies from 0.00213% to 0.00218% of the transaction amount
Trading Fee $0.003 per share
Transaction Fee* $0.000119 per share
Dividend Tax Rate 30%

*For sale trades only

Trading Hours for the US Stock Market

The trading hours of the US stock market are different in winter and summer times. In summer, the trading hours are from 9:30pm to 4am in Hong Kong time. They are one hour late in winter – from 10:30pm to 5am in Hong Kong time.

3 Major US Stock Indices

Similar to how we have the Hang Seng Index (HIS) in Hong Kong, there are 3 major US stock indices which indicate the overall market performance in the US.

  • Dow Jones Industrial Average (DJIA) – Founded in the 19th century, it measures 30 listed companies including Coca-Cola (KO), Boeing (BA) and Goldman Sachs Group (GS).
  • NASDAQ Composite (NASDAQ) – Founded in 1971, its 100 constituent stocks are mainly from IT, Telecommunication and Biotech sectors, including Google (GOOG), Apple Inc. (AAPL) and Microsoft (MSFT)
  • S&P 500 Index (S&P 500) – Founded in 1957, its constituent stocks are more diversified, measuring 500 listed companies including Facebook (FB), Johnson & Johnson (JNJ) and ExxonMobil (XOM)

Pros of US Stock

  • They have lower entrance fees: The minimum trading unit of US stock is only a share! And the management fee is relatively cheap. You can start investing with less money.
  • They offer more and better choices: Many of the world’s top companies chose to get listed in the US. You can easily find a quality stock of interest and there are more ETFs in the US too.
  • You are exempt from profits tax: Americans are required to pay investment income tax but luckily Hong Kongers don't have to! Just fill out the W-8BEN form (most securities firms will help you with this!) and declare you’re a foreigner when you open a US stock account and you’re exempt from the tax.
  • They are highly regulated and transparent: The US regulatory authorities put a lot of effort into combating insider trading, market manipulation, financial fraud, etc. so its market transparency is high.

Cons of US Stock

  • The time difference: The opening of the US stock market is at night in Hong Kong. It could be hard for Hongkongers to stay close to the market. If you’re following a long term strategy, then it’s not too big a deal though!
  • The exchange rate: As US stocks are traded in USD, investors must pay attention to the currency conversion cost.
  • More expensive monthly stock investment plans: Investors have to pay for administrative fees of about 5% of contribution in monthly stock investment plans which makes it very hard to justify! Although, since the entry cost for US stocks is much lower, you may not need a stock investment plan at all. You could just buy a few shares of various ETFs to get a diversified portfolio!
  • High dividend tax rate: The US dividend tax is 30% which might weaken the returns on dividend investing.

(Banks and securities firms’ fees and service information are for reference only. Actual charges depend on in-time information provided by banks and securities firm.)

Invest in US ETFs with a Robo-advisor
Robo-advisors can create your US stock portfolio using AI, and you can start with as low as HKD 500!

#US Stock Investing
Share:

Track. Plan. Get advice.

Making your finances easier

Follow us on social for more useful news!
Instagram
@planto.hk
Facebook
@Planto.HK
LinkedIn
Telegram
@Plantohk
22/F, 3 Lockhart Road, Wan Chai, Hong Kong
Planto Limited © 2021