moomoo CDP Linkage Trading Is Too Expensive

I love it when technology makes life simpler. But I love it even more when it keeps life cheap.

Recently, Moomoo launched their direct CDP linkage feature. Finally, we can trade on a slick, modern app and have the shares land safely in our own Central Depository (CDP) account, not a custodian wallet. 

It sounded like the best of both worlds for me, until I saw the bill.

The $15 Surprise

I recently checked the numbers for one of the purchases I wanted to make: Buying 1 lot of DBS for ~$5300. 

Option A: moomoo's Custodian Account would have costed me $5.

Option B: moomoo's CDP Linked Account would have costed me $15. 

That's a 300% markup for the privilege of direct ownership. It is a hefty price which I could hardly justify paying, and here's why.

The Fees Comparison

As dividend investors, we are willing to pay for quality and peace of mind. I prefer CDP holdings for my long-term banks and REITs because I want that direct relationship with the company. I want the AGM invite. I want the peace of mind that no matter what happens to the broker, my name is on the ledger. 

But being a good investor also means not wasting money. 

If we want direct ownership in our CDP, there are other platforms that are cheaper:

moomoo's CDP Linked Account: 0.22% fees (minimum 9.98SGD)

FSMOne: 8.80SGD flat fee

DBS Vickers Cash Upfront: 0.12% fees (minimum 10.90SGD) to buy and 0.18% fees (minimum 27.25SGD) to sell 

What's Next?

While the reality of moomoo's high fees for CDP-linked trades has set in, I have decided what's next for my holdings on moomoo. 

moomoo charges a flat fee for transferring stocks to CDP, at $110 per stock.  I plan to leverage the low fees on moomoo's custodian account to accumulate shares. 

It is cost efficient to opt for this flat transfer fee, rather than to sell from custodian and buy again to CDP which can incur higher percentage-based fees on top of market risk. 

When it comes to this CDP linkage feature, all I can say in my opinion is that trade execution has a market price, and moomoo’s is currently too high. 

Disclaimer: This blog post is for entertainment and educational purposes only. It does not constitute financial advice. Please do your own due diligence.  

 

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