2025 US Stock Investment Cost Reveal | Custody and Settlement vs Overseas Brokers, Who is Cheaper?

Taiwanese investors looking to enter the US stock market face a key pain point not in the stocks themselves, but in how to choose the most cost-effective trading method. Both domestic custodial services and overseas brokers have their strengths, but differences in transaction fees can directly impact your investment returns. This article uses the latest fee data and real cost comparisons to help you quickly determine which option suits you best.

Two Main Channels for Investing in US Stocks

If you want to buy US stocks in Taiwan, essentially there are two paths: one is to entrust a domestic broker to handle the transactions (custodial trading), and the other is to open an account directly with an international broker and trade yourself.

Custodial Trading: Taiwanese brokers purchase US stocks on your behalf

Full name: “Foreign Securities Trading on Behalf of Clients”. Simply put, you open an account with a domestic broker, then buy and sell US stocks and ETFs through their channels. Because the order must go through “Taiwan broker → US broker,” it’s called “custodial” trading.

Advantages of custodial trading are clear:

• Use New Taiwan Dollars for deductions, no need to exchange USD or study exchange rates
• Entire process within familiar Taiwanese financial systems, disputes can be appealed to the Financial Supervisory Commission
• No need to fill out complicated foreign language forms, avoiding the hassle of international account opening

But the cost is relatively higher fees, usually ranging from 0.15% to 1% of the transaction amount.

Overseas Brokers: Direct access to the US market, self-managed

Skip the middlemen and open an account directly with overseas brokers (such as Mitrade, Futu, IB, etc.) to buy US stocks, just like buying Taiwanese stocks through a Taiwanese broker. The appeal of overseas brokers is that transaction fees have significantly decreased, with many offering zero commissions.

However, you need to handle currency exchange and remittance yourself, which are often overlooked hidden costs by novice investors.

Custodial Trading vs Overseas Brokers: Complete Fee Breakdown

The costs of investing in US stocks are far more than just “transaction fees.” Let’s first list the fee items for both sides:

Cost structure of custodial trading

Direct charges:

• Transaction fee: 0.25%–1% of the transaction amount, with a minimum of $25–$100 USD per trade. For example: buying $1,000 worth of US stocks at a rate of 0.3% costs only $3, but with a minimum of $25, the actual cost becomes 2.5%
• Other miscellaneous fees: Remittance, account management fees, etc. (depending on the broker, usually negligible)

Hidden costs:

• SEC Fee: 0.00051%, charged only when selling
• FINRA (TAF) Fee: $0.000119 per share, with a minimum of $0.01 and a maximum of $5.95, also only on sell transactions

(These two fees are usually included in the overall fee by custodial brokers and are not listed separately)

Cost structure of overseas brokers

Trading side:

• Commission: Most mainstream brokers now offer 0 commission
• Margin interest: Only incurred if using margin accounts
• Third-party regulatory fees: Same as custodial (SEC, TAF)

Currency exchange and fund transfer:

• Currency exchange fee: Charged by banks, usually 0.05% of the exchanged amount, with a minimum of NT$100–NT$600
• Remittance fee: Bank charges for wire transfer from Taiwan to overseas broker, NT$100–NT$900
• Withdrawal fee: Some brokers charge NT$10–$35 per withdrawal

Adding these up, the total often exceeds expectations.

Practical Fee Comparison Table for Major Brokers

Top 3 cheapest custodial options:

Top 3 cheapest overseas brokers:

Bank currency exchange and remittance fees (based on Taiwan bank standards):

• Exchange rate fee: 0.05%
• Remittance fee: minimum NT$120
• Telegraph fee: NT$200

Actual Cost Comparison: Scenarios for Trading $1,000 to $20,000

Assuming using Fubon custodial trading versus Mitrade overseas broker, with remittance via Taiwan bank:

Key insight: When the transaction amount exceeds NT$6,000, overseas brokers become more cost-effective.

But this assumes only one trade. If most investors make multiple trades (e.g., 4 times), custodial fees (starting at NT$25 per trade) multiply, making overseas brokers’ zero commission and one-time remittance fee even more advantageous.

Custodial Trading vs Overseas Brokers: Who is suitable for whom?

Custodial trading is suitable for:

• Beginners with funds below NT$3,000–$5,000
• Very infrequent traders (1–2 stocks per year)
• Those who don’t want to research currency exchange and prefer to pay in TWD directly

Overseas brokers are suitable for:

• Larger funds (NT$6,000 and above)
• Planning regular or frequent trading
• Willing to spend time learning about currency exchange and remittance processes

Final Recommendations

Custodial trading is ideal for small, low-frequency investors—simplicity is key. Overseas brokers are better for large, frequent traders—cost savings matter most. There’s no absolute good or bad, only what fits your situation.

The key point: Don’t let transaction fees eat into your returns. Calculate how many trades you plan to make annually and how much per trade, compare with the fee tables, and the answer will be clear.