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Syfe Trade: One Of The Best Brokers For Casual Investors

Disclaimer: This is not a sponsored post, but this article contains referral codes that allow me to earn referral rewards at no cost to you if you choose to signup with them, which helps me maintain the blog.

You’ve probably heard of Syfe before and know them as a robo-advisor that helps you invest your money according to your investment goals and risk appetite.

What Is Syfe Trade?

While Syfe started out as a robo-advisor, they have been diversifying their services with the most recent feature being the introduction of Syfe Trade – their online trading platform.

Syfe Trade allows users to trade shares and ETFs freely as per other online brokers like Interactive Brokers (IBKR) or Tiger Brokers (TB).

Currently, Syfe Trade only supports trading on the US market.

Syfe Trade VS Syfe Wealth

In order to segregate their services, Syfe has 2 factions which you can toggle between on their mobile app – Syfe Trade and Syfe Wealth.

The former, as described earlier, is the online trading platform that has been recently released.

The latter refers to the robo investor services that Syfe has been known for, which allows users to invest in fixed portfolios that are created and maintained by Syfe’s wealth advisors or their own portfolio of ETFs (via Syfe Select).

Since Syfe Trade and Syfe Wealth offer very different services, they each have their own pricing structure.

While Syfe Wealth charges a management fee for their managed portfolios, Syfe Trade charges commission fees for each trade you execute, just as other online brokers do.

We’ll take a closer look at these fees later below.

It should also be noted that even though both Syfe Trade and Syfe Wealth are nested within the same app and Syfe account, they are considered to be different wallets in that you can’t freely transfer funds between them.

What’s Good About Syfe Trade?

1: Monthly Free Trades

To start things off, Syfe offers a limited number of free trades to its users every month:

  • 5 free trades/month for the first 3 months
  • 2 free trades/month for subsequent months

Once you’ve used up your free trades for the month, subsequent trades will be charged with Syfe Trade’s fees.

These free trades are applicable for both buy and sell orders and have no limit on trade value.

However, regulatory fees are still applicable to sell orders, in line with US regulations.

This means that buy orders will be completely free while sell orders will still incur a small fee even with the monthly free trades.

Note that free trades are applied based on calendar months.

So your first month of 5 free trades will only be applicable from the day you open an account until the end of that month and will be reset to 5 free trades at the start of the next month, etc.

Syfe Trade was the first broker to start offering free trades, presumably in an effort to gain market share.

This has since sparked competition among other low-cost online brokers like TB and moomoo, both of which have started finding ways to reduce their fees.

TB has started offering unlimited, lifetime $0 commission fees for US trades as a referral reward when you successfully refer a new user to join TB.

However, this does not mean free trades on TB because TB’s pricing structure charges users both a commission fee and a platform fee every time a trade is placed.

So even with $0 commission fees, users will still be charged TB’s platform fee of 1 USD for US.trades.

On the other hand, moomoo is offering permanent $0 commission fees for US trades for all eligible users straight off the bat – no referrals are required, unlike in TB’s case.

On top of this, moomo, is also offering $0 platform fees for 1 year to both new and existing users, starting from the date of account opening for new users and 13 April 2022 for existing users.

This means that moomoo is basically offering unlimited, free US trades for 1 year.

But just like Syfe Trade, regulatory fees still apply on moomoo sell orders.

2: Low Fees

Once you’ve used up your monthly free trades with Syfe Trade, you will be charged with their all-inclusive commission fee at:

  • 0.99 USD/trade for the first 3 months
  • 1.49 USD/trade for subsequent months

Other than this commission fee, Syfe Trade doesn’t charge any other types of fees like platform fees, withdrawal fees, account minimum fees, or inactivity fees.

They don’t even charge GST on this commission fee – Syfe Trade is absorbing the cost of GST in order to make their fees more affordable for users.

As far as I’m aware, no other brokers absorb the cost of GST for its users, so that’s neat.

Let’s see how Syfe Trade’s fees compare against other brokers for US market trading.

Broker Fees
Syfe Trade 0.99 USD / 1.49 USD
Interactive Brokers 0.35 USD
Tiger Brokers 1.99 USD
moomoo 0 USD* / 1 USD

*: 1 year only

Granted, Syfe Trade’s fees aren’t the lowest since moomoo is offering free trades for 1 year and IBKR’s fees are lower at 0.35 USD.

But remember that Syfe Trade offers free trades every month, so you will only incur this fee if you exceed the number of free trades for the month.

And even then, Syfe Trade’s fees are reasonably low, especially if you take into consideration foreign exchange (FX) rates as well.

3: Competitive FX Rates

While we’re on the topic of fees, Syfe Trade’s foreign FX rates are also highly competitive.

Syfe Trade doesn’t charge any explicit fees for FX conversion, but it is charged implicitly when taking into account the conversion rate, which is slightly worse than the market spot rate.

Let’s take a closer look at how Syfe Trade’s FX rates compare to other online brokers by comparing the conversion rate from SGD to USD offered on each platform at approximately the same time.

Since IBKR is known for their market spot rate FX conversions, we’ll use their rates as the baseline.

Syfe Trade VS IBKR

Syfe Trade FX Rate

IBKR’s FX rate is 1 SGD = 0.7333 USD while Syfe Trade’s is 1 SGD = 0. 7316 USD.

IKR offers a better rate because they offer market-rate conversions and they don’t profit off arbitrage.

However, they do charge an FX fee of 2 USD.

Taking IBKR’s rate as the market rate, this means that the implicit cost of FX conversion on Syfe Trade is (0.7333 -0.7316)/0.7333 = 0.23%.

Syfe Trade VS Tiger Brokers

Tiger Brokers FX Rate

TB’s FX rate is 1 SGD = 0.7309 USD and they don’t charge any FX fees.

This translates into an implicit cost of 0.33%, which makes it more expensive than Syfe Trade.

Syfe Trade VS moomoo

moomoo FX Rate

Moomoo’s FX rate is also 1 SGD = 0.7309 USD and they don’t charge FX fees too.

This means they charge an implicit FX fee of 0.33%, which is again more expensive than Syfe Trade.

As you can see, Syfe Trade’s FX rates are only worse than IBKR’s, beating out both TB and moomoo.

But remember that IBKR charges an FX fee of 2 USD, which may turn out to be more than the 0.23% you’d pay with Syfe Trade if the amount you’re converting is small.

To be exact, unless you’re converting (2/0.23%) = 870 USD = 1190 SGD or more, paying 0.23% is actually cheaper than paying 2 USD.

4: Fractional Shares

Finally, Syfe Trade offers fractional shares to users – a feature that brokers like TB and moomoo currently don’t offer.

As you’d expect, fractional shares allow investors to own a fraction of a share rather than being forced to own shares in whole numbers.

This is advantageous because it makes stocks and ETFs with a high share price more accessible to investors with smaller capital since they are not required to own a whole share.

To illustrate this, imagine that you want to invest in VOO (an S&P 500 ETF) but you only have 1000 SGD.

If VOO is trading at approximately 400 USD or 545 SGD, you would only be able to buy 1 whole share of VOO.

This means that some of your cash would be left idle and not invested in the market, which may cause you to lose out on some returns.

With fractional shares, you’d be able to invest your 1000 SGD into 1.833 shares of VOO and mitigate this issue altogether.

Fractional shares are especially beneficial to students and young adults who usually don’t have much cash to invest at any time or anyone who is employing a dollar-cost-averaging (DCA) strategy.

That’s because it guarantees that you will be able to invest whatever cash you have set aside.

Things To Note

While there are many great things about Syfe Trade, it’s not perfect, and there are some things you should take note of.

US Market Only

Firstly, Syfe Trade currently only supports trading for the US market, so you cannot trade any stocks or ETFs listed on SGX, LSE, HKEX, etc.

This means that you don’t have the option of investing in Ireland-domiciled ETFs to save on dividend withholding taxes since they are only listed on the LSE.

This also means that you don’t have the option of investing in Accumulating ETFs since all US ETFs are Distributing in nature, though this is slightly mitigated by fractional shares.

Fractional Shares For Market Orders Only

Next, speaking of fractional shares, they are only supported for market orders and not limit orders.

A market order means placing a trade based on the prevailing market price of the share, while a limit order allows you to dictate a specific price that the share must reach before executing the trade.

In other words, you have no control over share prices if you want to take advantage of fractional shares with Syfe Trade.

Instead, you’ll always be forced to trade at the market price at the time you place the order.

This might not matter too much if you intend to buy and hold broad, diversified index ETFs like VOO for the long term, but it can be quite disadvantageous when it comes to buying individual stocks since stock prices tend to be more volatile.

Free Withdrawals For SGD Only

Syfe Trade advertises that they don’t charge any withdrawal fees, but this is only partially true.

To be exact, only SGD withdrawals into local bank accounts are free.

USD withdrawals of any kind and SGD withdrawals to foreign banks will incur a fee.

While this is pretty standard, it can be a bit misleading since they claim to not charge any withdrawal fees.

Also, since USD withdrawals are not free, using Syfe Trade to convert SGD to USD for other purposes like crypto investing isn’t a viable option, if anyone was considering it.

1 App, 2 Accounts

Finally, if you use both Syfe Wealth and Syfe Trade, remember that they are considered 2 separate accounts even though they are managed with the same app and login details.

That is to say, funds are not transferrable between both accounts – at least, for now.

This means that if you want to transfer funds from Syfe Wealth to Syfe Trade, you’ll need to withdraw them into your bank account and then deposit it into Syfe Trade, and vice versa.

While inconvenient, I don’t think this is too big of a deal, but I figured it’s worth mentioning anyway.

Syfe seems to be working on implementing this feature in the future, so we’ll see.

Sign-Up Promotion

To make Syfe Trade even more attractive, they are currently running a sign-up promotion for new Syfe Trade users.

Through this promotion, new Syfe Trade users can receive a 60 SGD cash credit for funding their account and placing a trade and 30 SGD cash credit for referring other users.

A new Syfe Trade user is anyone who has not opened a Syfe Trade account – so existing Syfe Wealth users are eligible for this Syfe Trade sign-up promotion.

Note that cash credit is not the same as cash.

Cash credits cannot be withdrawn as cash and can only be used to offset the price when buying shares.

60 SGD Cash Credit

This is a one-time reward for new Syfe Trade users.

To be eligible for this reward, a new user must:

  1. sign up for a Syfe Trade account with a referral code “SRPT54W4C
  2. fund their Syfe Trade account with a minimum of 1000 SGD in a single transaction, and
  3. execute 1 buy trade of at least 1 USD in trade value within 30 days of account opening.

The reward will be credited as 44 USD within 7 working days of criteria fulfilment.

S$30 Cash Credit

This is the referral reward that existing Syfe Trade users will receive for successfully referring new users to Syfe Trade.

In order to make a successful referral, the referee must:

  1. sign up for a Syfe Trade account with your referral code
  2. fund their Syfe Trade account with a minimum of 1000 SGD in a single transaction, and
  3. execute 1 buy trade of at least 1 USD in trade value within 30 days of account opening.

The reward will be credited as 22 USD within 7 working days of criteria fulfilment.

There is currently no limit to the number of referees you can invite.

Would I Use Syfe Trade?

Syfe Trade is a great option for a broker, so I will use it, though it won’t be my primary broker.

As it stands, Syfe Trade only supports trading for US markets.

Personally, I prefer investing in Ireland-domiciled ETFs because of the tax advantages and the option to choose Accumulating ETFs.

So I won’t be using Syfe Trade very often.

However, if and when I do want to invest in US securities, Syfe Trade will definitely be my go-to seeing as it offers free trades and has reasonably low FX rates.

Who Should Use Syfe Trade?

Syfe Trade is great for anyone who’s looking to DCA in US-listed securities because fractional shares will ensure that all your cash will be invested.

So you’ll never have to worry about having idle cash.

You will also be able to take advantage of the monthly free trades and save on commission fees.

Syfe Trade is also a great option for anyone who has small capital and wants to start investing.

Again, fractional shares will make it efficient because you don’t have to worry about share prices.

And, at small amounts, the tax advantage that Ireland-domiciled ETFs have over US-domiciled ETFs is minimal.

So the savings that you may stand to gain from Syfe Trade’s free trades and low FX fees will help to offset the added cost of US-domiciled ETFs.

To summarise,

Syfe Trade is a good option for a broker since it offers monthly free trades, low commission and FX fees, and supports fractional shares.

While it is limited to only the US market, it’s great for what it does – US-domiciled ETFs aren’t bad by any means.

And, as mentioned earlier, they’re a great alternative to Ireland-domiciled ETFs listed on the LSE which tend to be more expensive in commission fees and share price.

If you’re thinking of using Syfe Trade, be sure to take advantage of the sign-up promotion to earn 60 SGD of cash credits.

Will you use Syfe Trade? Why or why not? Let me know in the comments below!

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