When it comes to low-cost brokerage platforms, both Moomoo and Interactive Brokers (IBKR) are popular options for Singapore investors. But is one better than the other?
That’s what I plan to find out by comparing both brokerage platforms side by side based on the following four criteria:
- Access to stock markets
- Trading cost
- User-friendliness
- Sign-up rewards for new users
Do note that I will be assessing these two platforms from the perspective of a stock market investor. Thus, if you are using these platforms for forex or cryptocurrency trading, this article would likely not benefit you much.
So with that said, let’s get into the details.
Access to markets
When it comes to investing in various stock markets, Moomoo users are currently only able to invest in five markets, namely Singapore, the United States, Hong Kong, China and Japan.
This pales in comparison to IBKR, which not only has access to the abovementioned markets but also certain parts of Europe and Asia-Pacific regions.
IBKR’s broader access to markets could be a decisive factor for ETF investors in Singapore as it allows one to invest in low-cost Irish-domiciled ETFs listed on the London Stock Exchange. Users on Moomoo do not get to have this benefit.
Thus, with much wider global access to various stock markets, I think IBKR is the clear winner over Moomoo.
Cost
When it comes to costs associated with brokerage platforms, most investors would look at trading commissions, platform fees and other related custodian fees. While these fees are important to consider, after all, who wants to pay more for their trades, an often overlooked aspect is the currency conversion spread.
Thus for this cost criterion, I would be comparing both the trading-related costs and currency conversion spread of Moomoo and IBKR.
Trading costs and commissions
As Moomoo only has trading access to five stock markets, I will only compare the relevant trading costs of these 5 markets with IBKR.
Singapore
Starting with the Singapore market, Moomoo currently offers 1-year free commissions for new users to the platform.
Once the 1-year period is over, the relevant commission cost would then be 0.03% of the transaction amount, with a minimum of S$0.99 per order. This is cheaper than IBKR’s commission of 0.08% of the transaction amount, with a minimum of S$2.50 per order.
However, if you add in other fees such as platform and 3rd party exchange fees, the total trading cost (after the 1st year), would be 0.1%.
Thus, in the long run, Moomoo would only be cheaper than IBKR if you trade S$2500 or less in the Singapore market. And if you are thinking that splitting up a big trade into multiple small trades would be cheaper with Moomoo, sorry to burst your bubble it does not work that way.
Let’s say that your trade order is S$10,000, these would be the relevant trading costs using Moomoo and IBKR:
Moomoo (Single trade)
- Commission: S$3
- Platform: S$3
- 3rd party fees: S$4
- Total: S$10
Moomoo (4 trades of S$2,500 each)
- Commission: S$3.96
- Platform: S$3.96
- 3rd party fees: S$4
- Total: S$11.92
IBKR (Single trade)
- Commission: S$8
- Total: S$8
As seen, breaking down a large value trade into smaller trades offers no cost advantage and would instead incur more trading fees. Hence, stick with IBKR and single trades if you intend to invest in the Singapore market for the long term.
Hong Kong
Moving on to the Hong Kong market next, IBKR generally offers an overall lower cost than Moomoo for most investors.
While Moomoo has an overall lower commission fee, the flat platform fee and 3rd party fees really jack up the overall trade cost. Nevertheless, Moomoo would be a cheaper option if your transaction amount is higher than ~HK$38,331.
China
Similar to the Hong Kong market, IBKR would also be a generally cheaper option when trading Chinese A-shares stocks.
The transaction threshold that would make Moomoo the cheaper option would be ~CNH 36,066 for stocks and ~ CNH 32,609 for ETFs. Do note that this value does not include the portfolio fees incurred if you were to hold Chinese A-shares stocks via Moomoo.
Japan
When trading in the Japanese stock market, IBKR is easily the cheaper option due to the absence of platform fees and 3rd party fees.
United States
When it comes to the US market, both Moomoo and IBKR offer really competitive commissions and fees, with Moomoo even having commission-free trading.
With trading costs for the US market based on the number of shares traded, IBKR would be cheaper than Moomoo if you are trading a low number of shares. The sweet quantity would be 495 shares or less, after factoring in the platform fee of Moomoo. Any higher quantity of shares traded would then make Moomoo cheaper than IBKR.
However, the above might not apply if you are trading penny stocks, since there is the possibility that 1% of the transaction amount would be lower than the total commissions charged based on the number of shares traded.
Hence, for penny stocks trading, as long as 1% of your transacted amount is less than US$0.99, then IBKR remains the cheaper option even if the quantity of shares traded is more than 495.
Now before jumping to the conclusion that Moomoo is the better option if you trade more than 495 shares in the US market, you might want to read the next section on currency conversion spread.
Currency conversion spread
When looking at overall trading costs, it is always important to consider the currency conversion spread as it could negate any cost-saving benefits garnered from lower trading commission fees.
On that note, here’s the currency conversion spread for both Moomoo and IBKR.
We can see that Moomoo has a much higher FX spread than IBKR. This means that you are potentially getting less when converting your SGD to other currencies on Moomoo as compared to IBKR.
Based on a conversion of $1000 SGD to USD as of 28th Aug 2024, Moomoo gives around US$764.21 as compared to US$765 on IBKR, after factoring in the minimum US$2 commission per order. This is in comparison to US$767.17 using Google’s currency conversion.
The spread difference amount between IBKR and Moomoo would only continue increasing as you convert higher amounts.
However, if you are converting smaller amounts (~S$839 or less), then Moomoo would be better than IBKR, as long as the spread difference is US$2 (IBKR’s commission cost) or less.
All things considered, I think that IBKR would be a cheaper option than Moomoo in the long run. This is because as you continue building your investment portfolio, your transaction amount per trade will likely increase, which also equates to higher amounts of currency being converted. Thus, the cost savings from IBKR’s currency conversion spread would likely exceed any cost savings from Moomoo’s lower commissions.
User-friendliness
Having looked at the associated costs when trading on both platforms, let’s consider both platform’s interfaces next. While this is not a huge deal breaker for me, I acknowledge that some investors can be put off by a complicated user interface.
For this criterion, I will be looking at both the mobile app and desktop interfaces and other unique features of Moomoo and IBKR.
Mobile app interface
Both IBKR and Moomoo have a similar layout for their mobile app interface, with categories as icons at the bottom.
Both platform interfaces for trading a particular stock are also fairly straightforward.
An advantageous feature that Moomoo has over IBKR is the free Nasdaq real-time quotes, which allows investors to see the buy and sell orders in the order book.
IBKR also has this feature but it’s only available via a monthly subscription.
Moomoo also has a comments feature under each stock that allows users to share their viewpoints about the stock.
While I personally feel that such comments are unnecessary noise, some might find value in the thoughts of other individuals. Nevertheless, you should always do your own research about the stock and not depend on what others think.
In terms of funds transfer, I feel it is slightly easier on the IBKR app than the Moomoo app.
For IBKR, you simply need to tap on your profile at the top left and choose deposit funds.
On the Moomoo app, it is not that clearly defined as the deposit funds option is under transfers which is then parked under the accounts icon.
Nonetheless, you do receive your funds much faster on Moomoo, which normally takes a few minutes, as compared to around one business day via IBKR.
IBKR also only has one free withdrawal per month, with additional withdrawals within the month subjected to a $15 fee. From my knowledge, Moomoo does not charge any withdrawal fees and you typically receive your funds much faster than on IBKR.
Last but not least, I personally find the in-app advertisements of Moomoo to be rather annoying.
Thankfully, there are no such advertisements on the IBKR mobile app.
As a whole for the mobile app, I would say that Moomoo seems to be targeting the younger and newer investors. On the other hand, IBKR’s mobile app is slightly more professional in layout and has a cleaner interface.
Desktop interface
When it comes to their desktop interfaces, both Moomoo and IBKR are almost identical with some slight interface differences.
New or advanced investors should have no issues navigating through either desktop interface.
An additional feature that I find useful which is only available on the desktop interfaces is the built-in market screener. This allows investors to screen for stocks which fulfil or meet their investing criteria.
As a whole, for the desktop interfaces, I think both are done really well and should serve the needs of most investors. Nevertheless, it might be lacking certain technical indicators for more advanced traders.
New user bonuses
When it comes to new user sign-up rewards, I think Moomoo would be the clear winner when compared to IBKR.
Moomoo new user sign-up rewards
Currently, Moomoo is having a promotion (till 31st October 2024) where new users can get stock rewards and up to 6.8% return on their cash (when subscribed to Moomoo Cash Plus) for the first 30 days.
The amount of stock would be dependent on the amount of funds deposited and the fulfilment of trade requirements.
Do note that your stock rewards will be frozen in your Moomoo account for 30/90/90 days, depending on your deposit tier. You also have to maintain the minimum deposit amount in your account during these 30/90/90 days else your rewards may be forfeited.
If you feel that Moomoo is the right brokerage platform for you, you can use my affiliate link to sign up for a new account.
IBKR new user sign-up rewards
As compared to Moomoo, IBKR does not have any ongoing promotions for new users.
However, if you feel that IBKR is your preferred brokerage platform you can use my referral link to sign up for a new account.
By doing so, you get to earn up to $1000 worth of IBKR stock. Depending on the amount, you would be rewarded with $1 worth of IBKR stock for every $100 deposited. Do also note that these awarded IBKR stocks can only be sold after holding them for a year and you need to maintain the corresponding funds ($100 for $1 worth of IBKR stock) in your account during the entire period.
Verdict
As a whole, thinking from a long-term perspective, I would pick IBKR over Moomoo due to its smaller currency conversion spread. This is also the main reason why IBKR remains the platform I’m using for investing in the US and HK markets.
While Moomoo might be great for younger investors who are just starting out and have limited capital, I think it is worthwhile to think a little further down the road, since your capital to be invested would likely only increase as your income level rises.
Do note that if you are transferring your stock positions from either broker, there are transfer-out fees involved.
Thus, if you are intending to switch brokerage platforms account for these additional fees into your cost analysis.