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    [Investing for Beginners] Introduction to HK stocks – Banks vs Securities Firms Fee Comparison

    All Posts » Start Investing
    Last updated: Oct 23, 2019•  3 min read

    語言: 廣東話

    Table of ContentsTable of Contents
    • Comparison of Hong Kong stock investment account fees

    • Hong Kong stock basics

    Buying a stock is the first step towards investing. But before you can do that, you need to open a securities account. There's quite a lot of choice between banks and securities firms – so how do you choose?

    Planto will help you compare the most popular Hong Kong stock accounts, show you their fees and share some basic knowledge about Hong Kong stocks to help you get off to a good start.

    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!

    Comparison of Hong Kong stock investment account fees

    HK Market
    US Market
    Robo Advisors
    logo
    Futubull
    Other Fee
    N/A
    Avg. Trade Cost
    HKD 15
    Welcome Offer: Welcome Offer: Enjoy up to HK$2,100 welcome offer Register a new account on or before 31st October 2024 by using Planto exclusive promo code “PLANTO” can enjoy the below rewards: 1) Planto exclusive offer : Enter promo code “PLANTO” BEFORE account opening can enjoy HK$300 flight ticket cash coupon 2) Lifetime commission-free for HK stocks and US stock LV2 real-time streaming quotation services 3) Open an account, deposit a total of HK$10,000 or above into the Futu HK account. Maintain 60 days daily average asset* of HK$10,000 or above to receive : Alibaba (NYSE:BABA) - 1 share or HK$400 supermarket e-voucher or HK$600-equivalent BTC 4) Open an account, deposit a total of HK$80,000 or above into the Futu HK account. Maintain 60 days daily average asset* of HK$80,000 or above to receive : Nvidia (NYSE:NVDA) – 1 share or HK$1,000 equivalent BTC Redemption procedures : Download Futu app; Register an account and go to Activity Centre; Enter “PLANTO” in redemption centre before account opening. Detailed procedures can refer to review article All rewards can be stacked. As of the closing price on 1 Oct 2024, Alibaba (NYSE: BABA) stock price was US$112.74/share As of the closing price on 1 Oct 2024, Nvidia (NYSE: NVDA) stock price was US$117/share Asset calculation method: Sum of the everyday assets/60 days; Including Cash/ Stocks/ Funds/ Options/ Futures Investment involves risks. The fund price may move up or down. Investor should thoroughly study the funds' offering documents and other related documents (including risk disclosure statements). Terms and Conditions apply
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    logo
    Tiger Brokers
    Other Fee
    0
    Avg. Trade Cost
    HKD 0
    Welcome Offer: Successfully open an account through Planto’s exclusive link then complete certain tasks until 11th October 2024 to enjoy up to HK$2,300 worth of reward: - Exclusive HK$400 supermarket vouchers from Planto after depositing HK$10,000 , plus: 1. Time-limited Commission-Free Rewards -0 Commission for HK stock trading (Lifetime) -0 Platform fee for HK stock trading (until 11th October 2024) -NYSE Arca Level 2 Deep Quote streaming for US stocks (until 11th October 2024) -0 Commission for US stock option trading (until 11th October 2024) -US Stock Option Lv1 Real-time Quotes (until 11th October 2024) - 365-day A-share commission-free voucher (available by opening an account before October 31, 2024) 2. New clients account opening awards, fund more for 45 consecutive days to get more (please refer to T&Cs for detailed qualifications) - Net deposit* HK$10,000 or US$1,500 or above : to activate HK$300 stock voucher (3x HK$100 vouchers) and 3-month free HK Stock Lv1 streaming quote - Net deposit* HK$50,000 or above : to activate HK$600 stock vouchers (6x HK$100 vouchers) - Net deposit* HK$100,000 or above : to activate HK$1,200 stock vouchers (12x HK$100 vouchers) 3. Complete 5 non-forex trades with each trade amounting to or exceeding HK$100 within 60 days after successful account opening (applicable to both Hong Kong and US stocks) : to activate HK$700 stock voucher (7x HK$100 vouchers) * Net deposit = deposit amount - withdrawal amount, excluding the part of asset increase or decrease due to normal transactions. ^Daily cumulative net deposits = (from the account opening date) cumulative deposit amount - (from the account opening date) cumulative withdrawal amount, excluding asset fluctuations caused by normal trading activities * Offers are subject to terms and conditions
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    logo
    Webull
    Other Fee
    0
    Avg. Trade Cost
    Welcome Offer: New customers who successfully open a Webull account through the Planto website's link can enjoy Apple shares worth up to HK$1,688! - Successfully open an account, deposit HK$10,000, and maintain the funds for 60 days to receive Apple stocks worth HK$600. - Successfully open an account, deposit HK$80,000, complete 10 buy trades, and maintain the funds for 60 days to receive an additional HK$1,088 worth of Apple stocks. - New users can enjoy 90 days of 0 platform fees for Hong Kong and US stocks upon opening an account. - Trade 50 or more option contracts to enjoy 0 commission and 0 platform fees on option trading.
    logo
    Longbridge
    Other Fee
    0
    Avg. Trade Cost
    HK$0
    Welcome Offer: On or before 31 October 2024, apply via Planto by using promo code「614701」, successfully open an account and deposit HK$10,000 to receive : 1) Planto exclusive HK$200 supermarket coupon 2) Extra HK$100 cash rebate 3) Life-time commission free for HK and US stock 4) APR 6% offer for deposit 5) Deposit HK$10,000 for 60 days with 4 tradings : NVDA.US - 1 share OR deposit HK$60,000 for 60 days with 4 tradings : AAPL.US - 1 share New customers who transfer the stock to LongBridge and meet designated requirement can get either 1) AirPods 4 ; or 2) an iPad mini 6 ; or 3) iPhone 16 Pro Max Terms and conditions apply
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    logo
    Interactive Brokers
    Other Fee
    0
    Avg. Trade Cost
    Welcome Offer: Earn up to 4.83% annual interest rate on positive settled cash balance for accounts with total NAV of US$100,000 or higher. (Accounts with NAV of less than US$100,000 receive interest at rates proportional to the size of the account. Interest rate if for reference only, it may change any time according to market condition)
    See more
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    Custodian Fee
    Avg. Trade Cost
    logo
    BOC Hong Kong
    HKD 100 - 150
    per half year
    0.18% - 0.25%
    (min. HKD 100)
    logo
    BOC Hong Kong
    Custodian Fee
    HKD 100 - 150
    per half year
    Avg. Trade Cost
    0.18% - 0.25%
    (min. HKD 100)
    logo
    HSBC
    HKD 25 - 30
    per month
    0.25%
    (min. HKD 100)
    logo
    HSBC
    Custodian Fee
    HKD 25 - 30
    per month
    Avg. Trade Cost
    0.25%
    (min. HKD 100)
    logo
    Citibank
    Free
    HKD 100 if inactive for 6 months
    0.18% - 0.25%
    (min. HKD 100)
    logo
    Citibank
    Custodian Fee
    Free
    HKD 100 if inactive for 6 months
    Avg. Trade Cost
    0.18% - 0.25%
    (min. HKD 100)

    Trading with brokers is cheaper, opening an account can be done 100% online and the user experience of their apps is often better – there's no reason not to use them.

    How much do you save by investing with a broker?

    Assuming investors put HKD 20,000 each month to invest in stocks and trade on average five times a month. The mainstream banks would cost you ~ HKD 525 each month. If you use the securities brokers mentioned above, the monthly transaction fee is only about HKD 100 per month.

    This difference of 425 HKD each month adds up really fast. In 10 years, it becomes HKD 51,000 in expenses (HKD 425 x 12 months x 10 years)!

    In fact, if you were to invest this difference with an annual return of 6%, you'd be missing out on almost HKD 70,000!

    Using a securities broker obviously reduces the fees – so even though trading with a bank offers some convenience and maybe even some extra credibility, it's hard to argue whether it's worth paying that much in fees for. Especially given these brokers are all regulated (licensed by the Securties and Futures Commission of Hong Kong) and are often successful businesses (like Futu which has even IPO'ed)!

    Hong Kong stock basics

    After completing the opening of the investment account and depositing funds, technically you can start investing immediately. However, it'll serve you well to know the basics of stocks before making a trading decision.

    What is a stock?

    A listed company issues shares to investors, and stocks are the evidence that investors own shares. After buying stocks, investors become shareholders of the company, can receive dividends, attend general meetings, and bear the risks caused by stock price fluctuations.

    Hang Seng Index

    The Hang Seng Index is an indicator of the performance of the Hong Kong stock market. It consists of 50 constituent stocks, mainly in the financial services, public, real estate and industrial and commercial sectors. The Hang Seng Index constituent stocks are often known as "blue chip stocks".

    Hong Kong stock trading unit

    Hong Kong stocks are traded on a per-lot basis – this translates to something like: "one lot of shares X share price + handling fee". As an example, the MTR Corporation (00066) has 500 shares in one lot. If the stock price is HKD 45.1, the minimum amount you'd have to invest is HKD 22,500 (1 lot x 500 shares x HKD 45.1).

    Hong Kong stocks trading fees

    In addition to the stock market price, the following fees must be paid to the Hong Kong Government, the Securities and Futures Commission or the Hong Kong Stock Exchange:

    • Brokerage commission: Basically what the bank / securities firm is charging – securities firms generally charge less tha banks
    • SFC transaction levy: 0.0027% of transaction amount
    • HKEX trading fee: 0.005% of transaction amount
    • Stock stamp duty: 0.1% of transaction amount
    • Trading system usage fee: HKD 0.5 per transaction (most firms exempt you from this fee, or charge separately!)
    • Central Clearing Shares Payment: 0.002% of the transaction amount (minimum HKD 2)

    Hong Kong stock trading hours

    The Hong Kong stock market trades on Mondays to Fridays (except public holidays) in the following periods:

    Time
    Opening Session 9:00am – 9:30am
    Morning Session 9:30am – 12:00pm
    Lunch 12:00pm – 1:00pm
    Afternoon Trading Session 1:00pm – 4:00pm
    Extended Hours 4:00pm – 4:10pm

    Exchange Traded Funds (ETF)

    ETFs are funds that simulate an index as an investment target, such as Tracker Fund (2800) which matches the performance of the Hang Seng Index. ETF-linked indices can cover single or cross-stock markets, commodities or even different asset classes.

    Real Estate Investment Trusts (REITs)

    REITs are another investment vehicle that primarily invest in real estate projects in Hong Kong, Mainland China or overseas. The main source of income comes from rent and the net earnings are mandated to be distributed back to shareholders. A list of REITs can be found here.

    Robot Investment Advisor (Robo Advisor)

    Robo advisors use algorithms to analyze the client's investment objectives, risks and preferences, and develop a portfolio of investments. They often includes ETFs from Hong Kong, the US or around the world. The advantage of robo-advisors is that they are completely automated, so the fees and minimum investment thresholds are much lower than traditional human investment consultants.

    If you need help making a portfolio, maybe a robo-advisor is right for you

    Important information: Investment involves risks. This information is intended to be educational and is not tailored to the investment needs of any specific investor. This information does not constitute investment advice and should not be used as the basis for any investment decision nor should it be treated as a recommendation for any investment or action. Past performance is no guarantee of future results. The value of investments and the income from them can go down as well as up, so you may not get back what you invest.

    #Investments
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    Blog writer
    Manson Yau
    Working for almost 10 years in journalism while accomplishing small life goals of owning a home and starting a family, my personal finance rule number one is “never rely on a single source of income”. The next challenge is learning to be a working father.
    Contacthello@planto.hkfor blog content collaboration
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    Table of ContentsTable of Contents
    • Comparison of Hong Kong stock investment account fees

    • Hong Kong stock basics
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