Here's example of FX rates you get with IB between currencies, screenshot taken a minute ago.

IB is interactive brokers

Can check out the Vanguard Ireland domiciled funds to reduce the Withholding taxes.

Yup, and they're covered in US by SIPC

FYI, depending on how you plan to invest IB may not be the best option.

IB has low fees, but you need to subscribe to the live data feeds at a cost and they charge an inactivity fee if balance is less than 100,000 usd or currency equivalent. Plus there's no automatic dividend reinvestment (DRIPS) like TD Ameritrade

Have a look at their site, there's a breakdown of fees - the 100,000 waives your 10 usd monthly inactivity fee. This can be in stocks, cash in any currency etc to 100k usd equivalent.

It's also waived if you carry out enough trades a month, ie 10 usd in commission, depends if you're more an active trader or a buy and hold investor

OK similar to me, also long term and not very active trader.

Have a look at Vanguard UK ETFs, you can buy those through IB on LSE (London stock exchange) and you'll have only 15% Withholding on dividends rather than 30%.

Hi,

1. On this Tax issue I'm not even 100% sure what the deal is - if we can really get the 15% back or not on US domiciled ETFs? Even if we can, it's a bit of a hassle so I've opted to go with Ireland domiciled. I've just received TDAM statement for the year and have paid approx $250 in WT so going to see if I can get half of this back without too much hassle, will update.

2. Actually, Ireland / Luxembourg I'm referring to as the domicile of the ETF, not the exchange it's traded on. Eg S+P 500 Vanguard Ireland domiciled is traded on LSE as VUSA / VUSD (GBP / USD) , because of the tax agreement between Ireland and US, the rate is only 15% rather than 30%

My personal view on the ETFs :

1. ISHARES VII PLC ISHARES CORE EU/ iShares Core EURO STOXX 50 UCITS ETF (CSX5) - Not that broad,covers only approximately 50 of the largest caps across Europe. Something like Vanguard VEUR (Vanguard FTSE Developed Europe) holds in comparison holds in excess of 500 different stocks.
2. Looks good to me, Vanguard VWRL is similar, more holdings but also a TER which is 0.05% higher.
3. Russia ... I haven't really looked into many Russia ETFs. I've bought and sold some RSX but not holding for the long term so didn't bother doing much research and don't care about dividends much on this. (US trading costs are cheaper, that's why I went with US listed..). Very volatile especially with the exchange rate fluctuations :



This post has been edited by rjb123: Apr 6 2015, 05:39 PM

No problem. RSX is good as it's very liquid and US trading fees are fairly cheap, WT don't really matter for short term punts.

Another thing to consider for long term - US Estate (ie inheritance taxes) if you pass away. I'm still fairly young and no kids etc. so haven't taken this into consideration!

TT from Maybank for example will cost you around 50 USD all in - not that cheap! That's including receiving bank fees and intermediary bank fees.

You could also deposit in SGD for example free of charge if you have an account in SG (IB uses Citibank in SG). I also deposit from my UK account (again, no fees) to GBP. Inside IB you can transfer between currencies at very competitive rates - better than you'd ever get elsewhere anyway.

I deposited quite a lot at once and just leave it there until I want to top up... Won't earn any interest if it's sitting in Maybank FCA anyway.

10 USD monthly is referring to inactivity fee, if you're not doing any trades during a month and have less than 100,000 USD balance.

TD Ameritrade has many commission free ETFs and supports DRIPS, so if you're only buying US ETFs infrequently and want dividends reinvested TD is a better option.

TD only USA exchanges AFAIK, but most common ETFs that you'd likely to be investing in are available commission free (there's a list on their website) so the trade is free, and DRIPS means your dividends are automatically reinvested. With IB they just get deposited into your account. But with IB you can be buying non us listed etfs, which means you don't have to pay the Withholding tax of 30%, only 15%.

There's a minimum on TD of 2000 usd I believe. Transfer charges will be the same for both, overall Tt from Malaysia will cost you 40-50 USD in total. IB cheaper if you have SG account for example and deposit in SGD.

Well either way you'd still be liable for intermediary bank charges - IB you could withdraw to SG in SGD if you have an account, avoid those charges.

I have never withdrawn from either so far so can't comment much on that. I'm in it for the long term, by the time I need to withdraw the amounts would be large enough not to worry about the withdrawal fees!

30% WT on Dividends applies to a US Domiciled ETFs, stocks,regardless of broker. On sign up you complete W8 Ben form which excludes you from CGT but still liable for 30% WT

Countries which have tax agreement with USA such as Ireland have different rates (ie. Ireland = 15%) so even though you're holding the same equities (ie. SP500 tracker, SPY vs VUSA), Dividends from VUSA would only be taxed at 15% rather than 30% because the ETFs domicile is Ireland.

Your holding qty will increase by $1-30%(WT) / $90

Of course you wouldn't buy just 1 unit, and you can only sell whole units.

This post has been edited by rjb123: Apr 7 2015, 08:48 PM

I think $1250 per quarter may be a bit cost prohibitive in both instances considering the roughly $50 transfer fees.

I don't follow your logic of additional ER of 0.3% though? I'll do a spreadsheet and report back shortly

Npt yet, busy day. I should have time to do it today

Yup, personally I wouldn't do any funding less than $10k so the fees aren't top much of a large percentage of the overall funding. I don't mind having extra cash sitting in IB account - Maybank doesn't pay any interest on USD FCA anyway.

I'll have a look at doing a spreadsheet shortly, the link doesn't account for :

1. DRIPS (automatically reinvested dividends without fees)
2. Higher trading costs on LSE
3. Larger spreads on LSE as the ETFs are less liquid than their US counterparts

Hopefully I don't screw this up, my spreadsheet skills are a bit rusty

Says who? been very busy last few months

.. initial deposit usd10k Yup, $10K Initial deposit to open account
.. usd1 per trade $0.005 per share, $1 minimum for US Markets. Other exchanges have other fees
.. usd10 min per month if no trades Yup, $10 inactivity fee if account under $100K, monthly commissions get offset, first 3 months inactivity fee is waived

before i go further, i thought will be good if you guys can point me in the most straightforward direction to get going. can you assist:

.. malaysian resident, with rm in local bank

.. open account online? any documents required? All online, scan of passport, utility bill to prove address etc
.. how do i transfer money in/out of IB account with my local bank - ibg, 3rd party? TT from Malaysian bank, takes 24 hours to complete (MaybanK)
.. does each transfer require notification any body, e.g. bnm? Not that I'm aware , have never been asked to give additional information
.. from where is exchange rate determined at any day or time? Determined by your bank's day rate when doing TT
.. how long from registration to acc active? Can't remember - think it was around a week
.. trading - is it always usd1 per buy or sell, any contra period (no payment used)?1 USD or $0.005 per share for US markets, different for others - full fee structure for different markets available https://www.interactivebrokers.com/en/index...ssion&p=stocks1
.. how many days for gain/loss to become due? Amount becomes available in cash balance immediately
.. any leverage? or zero, i.e. can buy only up to what is in cash deposit? Info on Margins : https://www.interactivebrokers.com/en/?f=margin
.. what is minimum shares buy/sell allowed - as per counter boardlot size?No minimums that I'm aware of

This post has been edited by rjb123: Apr 24 2015, 04:55 PM

The exchange rate will be determined by receiving bank, you can't send funds as MYR from IB.

I use USD account with Maybank to avoid any exchange rate issues.

If you have accounts elsewhere you can fund and withdraw in SGD, EUR, GBP etc also. Rate for changing between currencies will be far better inside IB than through any bank.

Since when?

You can't deposit or withdraw in MYR afaik