Buying through stockbrokers
The last method is to convert your SGD to USD in any traditional stockbroker such as IBKR and withdraw the USD to your crypto exchange account. It’s one of the cheapest but most laborious methods, I will briefly explain it here and go through it in detail in future articles.
To know why this method is one of the cheapest, you’d need to understand that the biggest slippage occurs when you convert SGD to USD with unfavorable Forex rates. There might also be transfer fees involved, but it’s often just a flat fee that gets increasingly negligible with larger transactions, most platforms also offer some limited number of free transfers per month which we need to make full use of.
If you go through a bank to deposit USD into crypto exchanges via international remittance, you are subjected to very unfavorable Forex rates. Furthermore, you might even get charged a draft fee on top of that.
With that in mind, you’ll appreciate that using a stockbroker has 2 distinct advantages:
- You can convert SGD to USD at the spot rate, which is very advantageous.
- You can withdraw the USD to the international bank account that your exchange uses, for free! (IBKR offers 1x free withdrawal per month)
I’ve been using IBKR since the start of my investing journey and it has served my trading needs very well. I get to buy USD at a tight bid/ask spread, and only pay a flat fee of $2 USD for most cases.
Once I’ve converted my SGD to USD in the IBKR account, I’ll withdraw to my Blockfi account, where the USD is immediately converted to GUSD. I can then leave it there to earn interest or transfer out to other exchanges if I want to trade or do DeFi, etc.
Alternatively, you can also withdraw to crypto exchanges that offer USDT and USDC like Kraken.
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