The truth about US stock trading fees: Use a full agency or an overseas broker? A table for clarity

Want to invest in US stocks in Taiwan, but the biggest obstacle isn’t stock picking difficulty—it’s not knowing how to trade in the most cost-effective way. Consignment trading? Overseas brokers? The fees vary greatly among providers, and a small oversight could mean paying more in commissions than your actual profit. This article will thoroughly analyze every cent of the buying and selling fees for US stocks, helping you figure out which trading method saves you the most money.

Two Ways to Invest in US Stocks: Each Has Its Pitfalls

Taiwanese investors mainly have two options for trading US stocks.

First is consignment trading. You open an account with a domestic broker, who acts as your agent to buy and sell US stocks. Since the process involves an intermediary domestic broker, it’s called “consignment trading.” The advantage is simplicity and convenience—you deposit in TWD, and the domestic broker automatically handles currency exchange, so you don’t have to worry about it. The downside is higher fees, usually around 0.15% to 1% of the transaction amount.

Second is overseas brokers. You open an account directly with a US broker and place orders yourself, just like buying local stocks in Taiwan. Many overseas brokers now offer zero commissions, which is friendly for frequent traders. But the cost is that you need to exchange TWD to USD yourself and wire the money abroad, which can be troublesome and incurs additional fees.

In simple terms, consignment trading is “convenient but expensive,” while overseas brokers are “cheaper but more hassle.”

Breakdown of Consignment Trading Costs: Know Before You Pay

If you choose consignment trading, the costs include direct broker fees and hidden costs.

First, the broker’s direct fees:

Transaction commissions are the main component. Different consignment brokers charge between 0.25% and 1%, but most have minimum charges, usually $25 to $100 per order. For example, if you buy $1,000 worth of US stocks, at 0.3% you’d pay $3, but with a minimum fee of $25, you actually pay 2.5%! This is why small investments in consignment trading are particularly costly.

There are also other service fees, like remittance fees, account management fees, but these are usually small and can be ignored.

Second, hidden costs:

When you sell US stocks, the SEC (U.S. Securities and Exchange Commission) charges a fee of 0.00051% of the transaction amount. FINRA (Financial Industry Regulatory Authority) also charges a trading activity fee, calculated per share at $0.000119, with a minimum of $0.01 and a maximum of $5.95. These fees are usually included directly in the transaction costs by the consignment broker and are not itemized separately.

Overseas Broker Trading Costs Breakdown: Looks Cheap but Has Hidden Risks

If you opt for an overseas broker, the fee structure differs.

Broker fees:

Most major overseas brokers now offer zero commissions, but some still charge fees. If you trade on margin, you’ll also pay interest on borrowed funds. These costs are transparent and generally not a trap.

But currency exchange and remittance are the real pitfalls:

When converting TWD to USD, banks charge a fee—usually around 0.05% of the exchange amount. Transferring money from Taiwan to the overseas broker costs between NT$100 and NT$900 per transfer. Some brokers also charge withdrawal fees of $10 to $35 USD. These costs add up and can be significant for small investors.

Additionally, SEC trading fees and FINRA activity fees apply regardless of whether you use consignment or overseas brokers, so the effect is the same.

If you buy dividend-paying stocks, regardless of the method, you’ll need to pay a 30% withholding tax on cash dividends (though you can apply for a tax refund).

Consignment vs. Overseas Brokers: Fee Comparison Table

Here’s a clear comparison of the main costs:

Major Consignment Brokers Fee Rates in Practice

If you prefer consignment trading, here are some of the main options (data as of June 2025):

Major Overseas Brokers Fee Rates in Practice

Most overseas brokers now offer zero commissions:

Bank Currency Exchange and Remittance Fee References

Using overseas brokers requires currency exchange and remittance. Major banks’ fees are roughly:

Practical Comparison: Which Is Cheaper?

Let’s do some calculations with the lowest fees:

• Consignment: Fubon Securities at 0.25%
• Overseas broker: Mitrade at 0% commission
• Currency exchange/remittance: Bank of Taiwan at 0.05%

Assuming an exchange rate of 1 USD = 30 TWD:

Key insight: When trading amounts exceed around $6,000, overseas brokers become more cost-effective.

But there’s an important condition: the above assumes a single trade (buy only). If you trade frequently—say, four times with $10,000 each—the consignment broker would charge $25×4 = $100 in commissions, while the overseas broker’s total remains about $11.67, making it much cheaper overall.

How to Choose the Most Cost-Effective Method? Decision Tree

Based on the above, the decision logic is:

• If you’re a small-scale beginner investor with each trade under $3,000 and infrequent trading, consignment trading is more economical. You can open an account and trade in TWD directly, without worrying about currency exchange or remittance.

• If you’re a medium-capital investor doing regular investments of $6,000–$10,000 with moderate trading frequency, consider your willingness to put in some effort. Consignment trading is convenient; overseas brokers save money—each has pros and cons.

• If you’re an active trader or large investor with ample funds and frequent transactions, choose overseas brokers without hesitation. The zero-commission advantage becomes significant.

• If you often deposit or withdraw funds, such as for dividends or portfolio adjustments, consignment trading might be cheaper because withdrawal fees at overseas brokers can add up.

Summary

Trading US stocks might seem complicated due to fee structures, but the logic is straightforward. Consignment trading offers convenience; overseas brokers offer savings. For small, infrequent trades, consignment is better; for large, frequent trades, overseas brokers are more economical. Calculating these costs carefully ensures that fees won’t become the most important factor in your investment decisions.