I’m not exaggerating when I say that buying stocks used to be a pain in the you-know-what.
When I bought my first stocks in 2007, the entire process looked like this:
- I called a well-known brokerage (Kenanga) and asked for a broker I could work with.
- Once they put me in touch with one of their brokers, he gave me instructions to head over to their office to fill in the paperwork needed to open a central depository system (CDS) account.
- As soon as my CDS account was approved and set up, he called to let me know and get more transaction details from me: Which stocks I wanted to buy, at what price and how many.
- I then had to wait for another call from him to let me know how much cash I needed to transfer to them, including the various fees that executing the transactions would incur.
- Once he gave me the total, I headed to my bank to get a cheque, and then back to the Kenanga office to submit it, and again, wait — this time, for my broker to let me know when my cheque was cleared and my order was put through.
- The last step: Waiting for transaction statements from both Kenanga and Bursa Malaysia to arrive via snail mail.
Every time I wanted to buy more stocks, I had to go through steps 3 to 6, all of which would take about a week.
Selling was a less painful, but still tedious process: I’d have to call my broker to put in my sell order, then go collect my check from the Kenanga office.
More experienced investors probably had a more efficient way to trade, but for me, this is how things went for about 10 years.
Yes, the stock brokering scene did gradually shift to the online space during this time, but a combination of being busy with work and not being in a hurry to change things up left me with very little motivation to do things differently until I heard about Rakuten Trade.
A joint venture between Kenanga Investment Bank and the Japan-based Rakuten Securities, Rakuten Trade got my attention with its promise of ease of use and much lower brokerage fees, so I signed up out of curiosity.
Having used the platform for a number of years now, here’s my Rakuten Trade review.
WHAT IS RAKUTEN TRADE?
Rakuten Trade is a digital brokerage platform that lets you buy and sell Malaysian and U.S. stocks online without having to go through an actual human broker like I used to (see steps 1 to 5 above).
The fact that the entire process of opening your Rakuten Trade and CDS accounts, buying and selling, as well as dealing with corporate actions (like collecting dividends and subscribing to a dividend reinvestment plan) is all done online also means that you save quite a bit on fees.
IS RAKUTEN TRADE SAFE?
Yes, it is. Rakuten Trade holds a Restricted Capital Markets Services License from the Securities Commission Malaysia. This means that it’s a licensed broker and can offer investment advice in that capacity.
Any funds that you deposit with Rakuten Trade are kept in a trust account with Kenanga Investment Bank, which means that your funds are held separately from that of Rakuten Trade’s, and should they go belly up, your cash will be credited into your bank account.
Your actual equity holdings, on the other hand, are held in your nominee CDS account (also under Kenanga Investment Bank), and maintained by Bursa Malaysia, hence the various fees that come with buying and selling your shares.
So yes, Rakuten Trade is very much legit.
HOW MUCH DOES IT COST?
Rakuten Trade’s brokerage fees for buying Malaysian and U.S. stocks are the same, and ranges between RM7 and RM100:
In addition to their brokerage fees, there are also other costs you’ll need to consider before making a trade:
WHAT I LIKE ABOUT RAKUTEN TRADE
Rakuten Trade’s the only broker I’ve been using to buy Malaysian stocks since I signed up in 2018.
1. Everything Is Done Online
Everything — from opening your Rakuten Trade account, depositing cash via FPX, placing your buy and sell orders, subscribing to corporate actions, as well as withdrawing cash to your bank account — is done online.
This means there’s no need to do any paperwork, call, wait or make trips to the bank (as long as your cash deposits via FPX are no more than RM30,000 per transaction) and broker’s office.
On Rakuten Trade, I’m able to deposit cash and make my trades within minutes.
2. Low Fees
I pay a brokerage fee of between RM7 and RM9 per trade for most of my buys, making Rakuten Trade one of the most cost-effective brokerage services for retail investors like myself.
Even if you were a high-baller with trades of over RM100,000 to make, you’d pay no more than RM100 per trade in brokerage fees — a steal in comparison to most other brokers that charge on a percentage (which typically ranges between 0.05-0.42%) basis.
As far as in-depth broker comparisons go, I like this guide from I3Investor.
3. No Handling Fees For Corporate Actions
None of the corporate actions that I’ve encountered (the most common being dividend payouts, dividend reinvestment plans and share splits so far) have cost me any fees.
In fact, the only corporate action you’d have to pay for on Rakuten Trade would be the transfer of your shares out to another broker if you ever decide to switch:
4. It’s Easy To Use
The Rakuten Trade website and mobile app aren’t pretty or fancy, I can tell you that.
But what it lacks in the looks department, it makes up for with pure, no-frills functionality.
This is the view of my ‘Dashboard’ tab when I log in:
The ‘Dashboard’ tab gives you an overall view of your cash deposit (plus interest that’s calculated daily, if any), the market value of your holdings, how much cash you can withdraw to your bank account, the status of your buy or sell orders, plus big-picture market data.
The ‘My Account’ tab is where you go to deposit or withdraw cash, as well as check your transaction history, corporate action subscriptions and statements:
In the ‘My Portfolio’ tab, you’ll be able to see all your stock holdings, the number of shares you own of each, their individual market value and other details like your unrealized profit or loss:
The rest of the tabs are also pretty straightforward, and all it takes to get familiarised with the platform is a little bit of clicking around.
5. Rewards Points
A minor but still useful feature of using Rakuten Trade is its RT Points system, where you can earn 1 RT point for every RM2 in brokerage fees that you pay.
You can either use your accumulated RT points to offset your brokerage fees when you trade (1 RT Point equals RM0.01), or convert them into AirAsia, BonusLink or Boost rewards points:
WHAT I DON’T LIKE ABOUT RAKUTEN TRADE
As much as I like using Rakuten Trade, it’s not without its shortcomings.
1. The Interface Isn’t Intuitive
Yes, the website’s easy enough to use, but if you’ve never used an online brokerage platform and are relatively new to stock investing, your first time logging in can seem overwhelming, and making your way around the site won’t feel intuitive.
Before you start, I recommend watching Rakuten Trade’s introductory videos — they’re very basic, but will help you find your way around both their website and app.
2. The App Is Messy And Chaotic
While Rakuten Trade’s website is easy enough to use despite its lack of user-friendliness, their iSPEED.my app is a whole different animal altogether.
This is what you’ll see when you first log in:
The tabs are somewhat similar to that of the desktop version, but to get to the full suite of features, you’ll need to navigate to the hamburger ‘Menu’ on the bottom right.
There’s nothing on the website that you can’t also do on the app, and just like the website, getting to know your way around the app will quite a bit of clicking around to see what’s what and how everything works, but you’ll get used to it…eventually.
3. There’s No ‘Calculator’ Feature
If there was one feature I wish Rakuten Trade would introduce, it would be a ‘Calculator’ that lets you break down the total cost of a potential trade, similar to the one FSMOne has:
On Rakuten Trade, I find that I’m able to get the cost breakdown only after I make a trade.
4. Delayed Dividend Payments
Unlike a direct CDS account (like the one I have with Kenanga) where dividends are deposited automatically into my bank account on their official payment dates, it typically takes three to seven days after their payment dates for dividends to be released into my Rakuten Trade account.
I then have to log into Rakuten Trade to submit a withdrawal request for the funds to be transferred to my registered bank account, and this will typically take another two days.
In all, it usually takes between a week or two for dividends to make it to my bank account — not a big drawback for me simply because submitting a withdrawal request literally takes seconds, it’s just that there are more steps and waiting involved.
5. You Need To Request To Attend AGMs/EGMs
As a direct CDS account holder, you get invited to the annual and extraordinary general meetings of the companies you’re invested in via email or snail mail.
Not so if you’re a Rakuten Trade nominee account holder.
Instead, you’ll have to email Rakuten Trade’s customer service team at least 10 days before the date of the meeting to ask for a proxy form (since your shares are held in a Kenanga Investment Bank nominee account) if you want to attend.
HOW I’M USING RAKUTEN TRADE
I’m no hot-shot day trader, so I use Rakuten Trade to buy and hold the bulk of my dividend stocks, which pay me a decent income every month.
I keep an eye on market movements and have set up watchlists of specific stocks, ETFs and REITs that are of interest to me on the platform, but I usually log in about once a month at most to withdraw my dividends, and that’s about it.
It’s boring and mundane, but it works for me.
My portfolio dips and rises daily — sometimes it’s in the negative, at other times it’s in the positive, but I’ve accepted that this roller-coaster ride comes with being invested in equities, which keeps me from acting on emotion when the markets go south.
So far, I’ve been using Rakuten Trade to buy Malaysian equities, but since it’s opened up to the U.S. market, I’m seriously considering switching away from Tradestation Global-Interactive Brokers to buy the U.S.-domiciled ETFs that I’ve been investing in to save me the trouble of having wire cash to Singapore.
DO I PLAN TO KEEP USING RAKUTEN TRADE?
For the foreseeable future, yes.
I have a few other trading accounts elsewhere, but have been using only Rakuten Trade anyway because it’s fast, affordable and easy enough to navigate.
THINKING OF USING RAKUTEN TRADE?
If you’ve been thinking of opening a Rakuten Trade account, consider supporting this blog by using my referral link or the code 4175FCVNKG when you sign up.
Sign up using my referral link or code and you’ll receive 500 RT points, which you can use to offset your brokerage fees or convert into AirAsia, BonusLink or Boost rewards points.
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