Increase your investment returns by comparing the commissions of different securities firms

Most investors focus solely on improving their returns when trading stocks, but in reality, comparing brokerage fees has a decisive impact on final profits. Even under the same conditions, the choice of brokerage can significantly change your returns. That’s where the importance lies.

Why Is Comparing Brokerage Fees Important?

Trading costs in stock transactions are often larger than expected. These include commission fees paid to the broker for buying or selling stocks, fees paid to related institutions like the Korea Exchange and the Korea Securities Depository, and currency exchange fees when investing in overseas stocks.

When you actually calculate, the impact is substantial. For example, trading 10 times with 1 million won each time and earning 10% profit per trade, the final profit would be about 2.57 million won with a 0.1% fee, and about 2.54 million won with a 0.2% fee—a difference of roughly 30,000 won. As trading amounts and frequency increase, this gap widens. Especially for day traders, overlooking fee differences can be costly.

Analysis of Major Brokerage Trading Fees

Fee structures vary greatly among brokerages. Looking at the five major online brokerages:

Domestic Stock Trading Fees:

Mirae Asset Securities charges 0.136%, Korea Investment & Securities 0.147%, Samsung Securities charges 0.147% plus 1,500 won for trades under 10 million won. Kiwoom Securities offers a very low rate of 0.015% on the Hero M4 platform. Shinhan Investment Corp. charges 0.1391639% plus 2,000 won for trades up to 30 million won.

Overseas Stock Trading Fees:

For U.S. stocks, most brokerages apply around 0.25%, which is relatively similar. However, considering currency exchange fees and exchange rate differences, the actual trading costs can be higher.

Caution - The Trap of Fixed Fees:

Don’t judge solely by percentage fees. Fixed fees like Samsung Securities’ 1,500 won or Shinhan Investment’s 2,000 won become disproportionately high for small trades. For 100 trades, that’s 150,000 or 200,000 won.

Also, most brokerages offer fee waivers for new or dormant accounts. Mirae Asset Securities provides free U.S. stock trading for 90 days, and Shinhan Investment for up to a year. Timing account openings well can lead to significant savings.

Practical Strategies to Reduce Fees

Optimize Trade Size and Frequency:

Higher trade amounts often mean lower fee rates. Therefore, it’s more efficient to make fewer, larger trades rather than multiple small ones. This is especially true for brokerages with fixed fees.

Understand Brokerage Characteristics:

Identify your trading style first. If you trade frequently with small amounts, platforms with no fixed fees and low base rates (like Kiwoom’s Hero M4) are advantageous. For large trades, brokerages with percentage-based fees are preferable.

Maximize Fee Benefits:

New or dormant account benefits are substantial. When opening new accounts or reactivating old ones, choose the timing to start these benefits to maximize savings.

Manage Currency Exchange Costs:

When investing overseas, exchange fees matter. Often, the exchange rate offered by banks or currency platforms is better than brokerage rates. Preparing foreign currency in advance or checking brokerage preferential exchange programs can help.

How to Choose the Best Brokerage for Your Trading Style

Choosing the right brokerage is key to maximizing returns.

Active Day Traders: Prefer Kiwoom Securities (0.015%) or platforms with no fixed fees.

Mid-term Hold Investors: Consider low-fee options like Mirae Asset Securities (0.136%).

Small-Scale Traders: Opt for brokerages offering sufficient fee waivers.

High-Volume Traders: Check for preferential conditions based on trading volume.

Also, regularly compare brokerage fees, as market conditions and policies change.

Conclusion

Comparing brokerage fees is fundamental to successful investing. No matter how good your investment decisions are, high fees can erode profits, leading to losses. Understand your trading patterns, carefully review each brokerage’s fee structure, and choose the most advantageous one. These small efforts can lead to significant long-term profit differences.