Finder is committed to editorial independence. While we receive compensation when you click links to partners, they do not influence our opinions or reviews. Learn how we make money.
Finder is committed to editorial independence. While we receive compensation when you click links to partners, they do not influence our content.
How to invest in US stocks from Malaysia (2021)
Find the cheapest brokerage fees when you trade US stocks from Malaysia.
As of 2021, there are at least a dozen online trading platforms in Malaysia with access to Wall Street’s New York Stock Exchange and NASDAQ, however there are some big differences when it comes to costs and features. Read on to find out more.
Buy US shares in 4 steps
- Compare brokers with access to US stocks
- Open your account by providing ID
- Fund your account by transferring money from your bank account
- Search and select the shares you want to invest in and start trading
Why invest in US stocks?
There are many reasons for Malaysian investors to own stocks listed in the US. In the last decade, Wall Street’s S&P500 index has delivered returns of around 199%, while Malaysia’s equivalent the FBM KLCI returned around 6% for the same period.
US stock markets also offer a greater diversity of companies than is available in Malaysia. The New York Stock Exchange and the NASDAQ are the two largest stock exchanges in the world in terms of market capitalisation. Many of the world’s biggest global growth companies, such as Facebook, Amazon, Apple, Netflix and Google (FAANG) are listed in the US.
Profit aside, holding a diversified stock portfolio is also safer. This means investing in companies from a range of sectors as well as countries. So, if Malaysia’s economy were to slow, stocks listed in another country such as the US can act as a buffer.
What are the costs of buying US shares?
A couple of decades ago, investing in global companies was fairly costly. Today, many online trading platforms allow Malaysian investors to buy and sell shares in Malaysia, the US and other international markets for less than US$10 a trade in brokerage fees. There are even a few that scrap the brokerage fee altogether.
However, not all trading apps in Malaysia offer US stocks. Some only offer Malaysian shares or they may charge additional high fees for the service. Before signing up to a new account or broker, it’s important to check which countries are on the books and what the associated fees are.
Each platform works in a different way, however the same general rules apply as with buying Malaysian shares – with a few additional considerations. For example you’ll be charged a brokerage fee and a foreign exchange (FX) fee when you trade shares. Brokerage fees are sometimes higher on international accounts and there may additional costs such as an inactivity fee.
Alternatively, you can invest in a portfolio of US stocks via exchange traded funds (ETFs).Back to top
Which trading platforms offer US shares?
There are a growing number of Malaysian online share trading platforms that offer access to international stock exchanges. Some platforms offer international accounts that are separate to their Malaysian trading accounts, while others are fully integrated on the one platform.
Here are some platforms that allow US share trading in Malaysia:
- TD Ameritrade
- Saxo Capital Markets
- Tiger Brokers
- Interactive Brokers
- Alliance One Invest
- Hong Leong HLeBroking
- CGS-CIMB iTrade
- UOB Kay Hian UTRADE
Zero brokerage trading accounts
Several share trading platforms in Malaysia now offer zero brokerage fees when you trade US stocks. This commission fee is what you’re usually charged by your broker every time you place a trade and can range anywhere from US$0 to US$50 per transaction.
Thanks to growing competition, some brokers have removed this fee altogether, instead charging a small foreign exchange fee to convert MYR to USD. Here’s a list of zero brokerage trading platforms for US stocks as of 2021:
- TD Ameritrade
It’s important to note that although you don’t pay commissions to trade using these platforms, it doesn’t mean they’re free. You’ll still need to pay a currency conversion fee to exchange MYR to USD, which is typically charged as a percentage of your deposit. You may also have to pay ongoing account fees and a “custody” fee, which is sometimes waived if you meet a minimum number of trades per year.
Malaysian apps must use a US-based custodian to hold your US shares. An annual custody fee is typically charged as a percentage of your holdings.
How do I compare trading platforms?
Make sure that you take the following features and questions into consideration when comparing the benefits of USA share trading sites:
- How much is brokerage? Compare the fee each company charges every time you place a trade on US stocks. Be aware that this will be different to broker fees for Bursa Malaysia-listed stocks.
- What’s the exchange rate? Exchange rates vary from platform to platform and this will partly be used to offset low broker fees. Check what these are first.
- Will you need to pay a monthly fee? Some platforms require you to pay a monthly fee in order to keep your account running or to access certain features.
- How is market data displayed? Check how up-to-date the market data offered by each platform is — being able to make trades based on current information is critical.
- How many international markets can you access? Some platforms offer access to a few key international markets while others let you to buy and sell shares on a much larger number of exchanges.
- How easy is the platform to use? Is it fast, simple and convenient to execute a trade and monitor market performance?
- What trading options are available? Is the platform just online or can you also place trades over the phone? Are flexible options like limit orders available to let you take advantage of market fluctuations?
- Are education and research resources available? Trading shares is complex, so does the platform offer the necessary tools to increase your investment knowledge?
- Is customer support available if you need it? How can it be accessed and when?
What are the pros and cons to investing in US shares?
- Access different investment opportunities. Trading via US stock exchanges allows you the freedom to take advantage of investment opportunities that are not available in Malaysia.
- Increasingly more affordable. As a growing number of online share trading platforms compete for market share, brokerage fees are becoming more affordable.
- Diversify your portfolio. If all your investments depend on the performance of one national economy – i.e. Malaysia’s – is your portfolio really as diverse as you think? Buying international shares protects you against having all your eggs in one basket.
- Brokerage fees. You’ll need to contend with potentially higher brokerage fees whenever you place a trade on an international share market.
- Exchange rates. The MYR-USD rate fluctuates frequently which might negatively impact your investment.
- Additional fees. International trading accounts are sometimes subject to fees that Malaysia-only platforms are not, such as inactivity fees and exchange fees.
What are some of the risks?
One of the key risks to be aware of when trading US shares is that you may not have the same level of knowledge and expertise as you have when trading Malaysian shares. Investing in an area, industry or country which you know little about is always risky, so it always pays to make sure you know what you’re getting yourself into.
Another factor worth considering is the tax implications of international trading. You don’t want to make any mistakes when declaring your income and find yourself on the wrong side of the Inland Revenue Board Of Malaysia (IRBM), so familiarise yourself with the tax treatment of your investments as soon as possible.
Frequently asked questions
More guides on Finder
Tax on share trading in Malaysia
Find out what tax deductions you’re entitled to if you’re a share trader or an investor.
What is options trading? A beginner’s guide for Malaysians
Read our beginner’s guide to trading options in Malaysia.
Malaysia’s penny stocks
Penny stocks often refer to low-priced stocks from companies with a small market cap. Discover top Bursa Malaysia-listed penny stocks and if they’re worth your time.
Guide to CFD trading in Malaysia
Guide to CFD trading, how to select the best CFD trading platform and what risks are involved.
How to buy stocks online in Malaysia
Learn how to buy stocks online by following our 7 step guide for Malaysians.
What are Malaysia’s blue chip stocks?
What are Malaysia’s top chip stocks and should you invest in them?
A beginner’s guide to cryptocurrency ETFs
If you’re looking for ways to gain exposure to bitcoin and other digital currencies, cryptocurrency ETFs could be worth exploring. Find out what crypto ETFs are and how they work in this introductory guide.
Ethereum (ETH) price prediction 2021
What affects the value of Ethereum (ETH) and how might the price of ETH fluctuate in the year ahead? Find out in this comprehensive guide.
AscendEX (BitMax) Cryptocurrency Exchange Review
A complete review of the AscendEX exchange, covering trading and DeFi features, associated fees, regulation and security. Is AscendEX right for you?
Finder Cryptocurrency Predictions Report: October 2020
We asked 30 panellists for their cryptocurrency price predictions, the outlook for DeFi and how long they think high returns on yield farming might last.
Ask an Expert