If you clicked this article, you’re probably about to start your stock investment journey and Googling what it cost you in brokerage fees to invest in stocks.
In this article, you will see my real-life examples of stock purchases I’ve made and the fee breakdown Maybank is charging me for:
- buying Malaysian stocks
- buying US stocks
I am by no means a pro stock investor, nor do I want to be anyone’s guru.
I’ve only started in mid-2019. I am documenting my investing journey in the Malaysian and US stocks.
My stockbroker has explained to me all about the fees many times over. But honestly, all went in my left ear and out the right. It was simply too much info for an absolute beginner to digest.
I was too lazy to read all the fine details, not that I can understand them anyway. I realized the best way to learn is just to do it. I bulldozed through my first few purchases and learned about the fees through experience as I go.
Why I Choose Maybank as my Broker
I have to be honest here, I did not do any comparison research, despite the knowledge that online brokers exist, I went with Maybank anyway. Why? For me, it’s simple:
- I trust Maybank as I’ve been their customer since I was a kid.
- If I have any issues, I can always call someone or head down to a local branch and meet a physical person.
- I don’t trust online companies that are not banks to hold my money.
- It’s nice to consolidate everything, my bank, and investment portfolio in 1 app and website.
Your broker of choice will depend on what type of investor you are. For me, I buy and keep stocks as long as I can. So it makes sense for me to get a broker from a local bank that I trust and I know they will be around for a long time.
My Investment Style
I invest in Malaysian stocks because I am Malaysian, currently living here, and its low cost of entry.
I also invest in US stocks because I studied there for my Degree and know how consumers behave over there.
Mr.Free@33 inspired my main stock investing strategy, which is strictly dividend investing. I buy stocks with no intention of selling from companies that are:
- well known and have been in business for at least ten years
- I know what the company does & was or am their customer myself
- I only buy stocks from companies that pay dividends
Maybank Brokerage Fees for Buying Malaysian Stocks
I will use a real personal example of when I purchased AirAsia (KLSE: AIRASIA) stocks. The highlighted red box are the fees to buy Malaysian stocks:
The costs to buy Malaysian stocks are:
- Brokerage Fee (0.1%, min RM 8).
- Contract Stamp (0.1%, min RM 1).
- Clearing Fees (0.03%).
Let’s go through them one by one:
Malaysian Stock Maybank Brokerage Amount
Here’s how M2U Brokerage fee is calculated:
- RM 8 flat fee for stock purchases below RM 8,000.
- 0.1% of the transaction value for stock purchases above RM 8,000.
My transaction is RM 972. Therefore, my brokerage fee is RM 8.
Malaysian Stock Contract Stamp
M2U Contract Stamp fee is charged at the following rate:
- above RM 1,000 will be charged at 0.1%
- below RM 1,000 will be charged a flat fee of RM 1
My traded amount is below RM 1,000, my Contract Stamp costs me RM 1.
Malaysian Stock Clearing Fees
The clearing fee is charged at 0.03% of the traded amount. For my example of RM 972;
Clearing fees = RM 972 x 0.03% = RM 0.3.
How to Pay for Malaysian Stocks Through M2U
When you open a trading account for Malaysian stocks, Maybank will automatically open up a Premier-1 bank account for you that is visible when you log in to your M2U.
This Premier-1 account is not like your standard bank account, as you can’t buy stuff online from this account. It is an account that is strictly for purchasing Malaysian stocks.
There are special procedures to withdraw money from this account to your regular savings account if you decide to do something else with the cash besides buying Malaysian stocks.
Your broker will automatically deduct money from this account approx 1-3 business days after you sent out your stock purchase order.
Now we got the Malaysian stocks out of the way, let’s continue with buying US stocks:
Maybank Brokerage Fees for Buying US Stocks
As far as I can tell from my experience, I only have to pay brokerage fees to buy US stocks:
- Brokerage Fee (0.4%, or min USD 25).
- No Contract Stamp.
- No Clearing Fees.
I will use a real-life example for when I bought Coca Cola (NYSE: KO) stocks from the US.
This being my first stock purchase, I bought them without thinking much of it (guilty).
A few days later, my stockbroker agent sent me the invoice for my purchase and that’s when I learned their fee breakdown:
The cost for me to own these stocks are highlighted in the red box above.
The stock price is the price that I managed to bid for 1 unit, which was USD 40.06 at that particular point in time.
M2U Brokerage Fee
The M2U brokerage fee for US stocks are:
- 0.4% of the total stock purchase (above USD 6,250)
- A flat fee of USD 25 (for total purchases below USD 6,250)
For my Coca Cola (KO) example, I only bought 6 stocks with a value of 6 x USD 40.06 = USD 240.36. So my trading fee is USD 25 for this not so smart transaction.
Total Cost for Me to Buy This Us Stock
The total cost for me to own 6 units of KO stock was USD 240.36 + USD 25 = USD 265.36.
This was not a smart decision to only buy 6 stocks in 1 order. The brokerage fee for me to acquire 6 units of KO stocks or 1000, is the same at USD 25 per transaction.
In hindsight, if I waited until I had more cash, I’d purchase at least 30 stocks in 1 shot to save on the brokerage fees.
But then again, if I need to wait until I have enough money for that, I’ll never own any US stocks. Legit chicken and egg situation.
The MYR 1,193.53 is the MYR equivalent to this US stock purchase. This is the amount I have to pay to Maybank Investment within 24 hours of them issuing me this invoice :
How to Pay for US Stocks on M2U
Payment for US stocks in MYR equivalent has to be done manually on M2U to the ‘Maybank Investment Banking‘ account.
My stockbroker agent sent me the bank account details for me to transfer and I saved it as my favorites:
I then need to send the receipt of the transfer to my broker to prove that I made the payment.
- Brokerage fees are expensive.
- It does not make financial sense to buy shares in small quantities.
Share if this article has been helpful. I will reveal my dividend portfolio as the time comes.
I have compiled my favorite stock investment blog in my ‘recommended blogs‘ section.
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