The Big Reveal of US Stock Investment Costs | 2025 Custody vs. Brokerage Selection Guide, Are the Fees 10 Times Different?

For Taiwanese investors looking to enter the US stock market, choosing the right trading channel directly impacts the final returns. Should you use domestic sub-brokerage services or open an overseas broker account directly? How big is the difference in transaction fees between the two? This article will analyze each option for you.

Investing in US Stocks, What Are Your Options?

To trade US stocks in Taiwan, there are mainly two channels: sub-brokerage trading and direct overseas broker.

Sub-Brokerage: Convenient but Higher Costs

Sub-brokerage (Sub-Brokerage) refers to the business of entrusted foreign securities trading. Simply put, you open a dedicated account with a domestic broker, who acts as your agent to buy US-listed stocks or ETFs. Since the orders must go through the domestic broker before purchasing overseas securities, it is called “sub” brokerage.

The advantages of this method are clear:

• Transactions are all in New Taiwan Dollars, no need for currency exchange
• No need to apply for an overseas account, saving complicated procedures
• Regulated by Taiwan’s Financial Supervisory Commission, ensuring fund safety
• Clear complaint channels

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

Overseas Broker: Lower Fees but More Complex Process

Placing orders directly with an overseas broker is like buying Taiwanese stocks in Taiwan—skipping intermediaries and deciding when to buy or sell yourself. Currently, mainstream overseas brokers offer zero commissions or even negative commissions, very friendly for frequent traders.

But you need to bear the following costs:

• Currency exchange to USD by yourself
• Remittance to the overseas account
• Possible withdrawal fees

Although the overall process is more complex, it can significantly reduce trading costs.

What Does the Fee Include?

Cost Structure of Sub-Brokerage

Using sub-brokerage trading, fees consist of direct charges and implicit costs.

Direct charges include:

Trading commission — the main cost

• Rate: 0.25% to 1% of the transaction amount (varies by broker)
• Minimum fee: $25 to $100 per order, which is critical
• Example: Buying $1,000 worth of US stocks, with a 0.3% fee, would be $3, but if the minimum is $25, the actual cost jumps to 2.5%!

Other service fees (usually negligible)

• Remittance fees, paper statement fees, account idle fees, etc.

Implicit costs include:

Exchange fees and trading activity fees

• Exchange fee (SEC fee): charged upon selling, rate 0.00051%, collected by the broker and transferred to the US Securities and Exchange Commission
• Trading activity fee (TAF): charged by FINRA, $0.000119 per share, minimum $0.01, maximum $5.95
• Sub-brokerage brokers usually incorporate these costs into the overall fee, not itemized separately

Cost Structure of Overseas Brokers

Main direct charges are:

Trading commissions — mostly zero now

• Most mainstream brokers have achieved zero commissions

Margin interest

• If using margin accounts to buy stocks, interest on borrowed funds applies

Currency exchange fees

• When converting NT$ to USD at banks, usually 0.05% of the exchanged amount
• Be aware of minimum fee restrictions

Remittance fees

• From Taiwan to overseas brokers, banks charge between NT$100 and NT$900 per transfer
• This is a one-time fee but can be substantial

Withdrawal fees

• Some overseas brokers charge $10 to $35 per withdrawal Exchange fees and trading activity fees
• Same as with sub-brokerage, charged upon selling

Cost Comparison Table: Who’s Cheaper at a Glance

Major Sub-Brokerage Fees Comparison

Major Overseas Broker Fees Comparison

Currency Exchange and Remittance Fee References

Actual Cost Comparison: Sub-Brokerage vs. Overseas Broker

Using the lowest-cost combination as an example:

• Sub-brokerage with Fubon Securities: 0.25% commission
• Overseas broker with Mitrade: zero commission
• Currency exchange and remittance via Bank of Taiwan: 0.05% fee

Cost Comparison Table

Exchange rate: 1 USD = NT$30

How to Calculate Multiple Trades?

The above table assumes only one trade. But if you trade frequently, the difference becomes even more significant:

Suppose investing $10,000, split into 4 trades (2 buys, 2 sells):

• Sub-brokerage: $25 minimum fee per trade × 4 trades = $100

• Overseas broker: zero commission, remittance fee only once, still $11.67

The conclusion is clear: When trading amounts exceed $6,000 or involve multiple transactions, overseas brokers offer obvious advantages.

How to Choose? Investor Decision Guide

Choose sub-brokerage if you:

• Invest less than $3,000
• Don’t trade frequently
• Don’t want to deal with currency exchange and remittance hassles
• Prefer to pay in NT$ directly

Choose overseas brokers if you:

• Invest more than $6,000
• Plan to trade frequently
• Are willing to spend time on currency exchange procedures
• Want to maximize cost savings

About Mitrade: As an ASIC-licensed broker (license 398528), offering zero-commission trading, with a minimum deposit of only $50 USD, supporting NT$ trading, becoming a popular choice among Taiwanese investors.

Final Reminder

• Different sub-brokerage fees can vary over 4 times; compare carefully
• Although overseas broker commissions are low, don’t forget remittance and currency exchange costs
• Trading frequency is the key variable affecting overall costs
• Fee standards may change in 2025; always confirm the latest charges with service providers before trading

Choosing the right trading method can save you a lot of real money.