The first account you’ll need as you embark on your investment journey in 2021 — a CDP Securities Account. Here’s how you can apply and use the account to your own benefit.

Investing and trading may seem daunting for the greenhorns. But if you’ve landed on this article, you would have already taken the very first (and necessary) step towards buying your first stock, bond or Exchange Traded Fund (ETF). 

Here you’ll find out how to open a CDP account and how you can make the most of this new account. 

What is a CDP account 

To start trading, you will need both a Trading Account with a broker and as well as a CDP Securities Account. A CDP account safekeeps your securities in the account. This includes stocks, bonds and other securities listed on the SGX as well as Singapore Government Securities. 

There are three types of CDP accounts: 

• Individual account: Most retail investors apply for an individual CDP account, a necessity for you to start trading
• Joint Account: There are two types of joint accounts. A Joint-Alternate Account allows either one of the applicants to give instructions to CDP while a Joint-And Account requires both applicants to jointly sign or give instructions to CDP.
• Corporate account: This account is used strictly to hold shares owned by the corporation for its own benefit and the applicant must be a duly incorporated body with limited liability. 

If you’re not sure if you already have a CDP account, you can check by calling 6535 7511.

What do you need to open a CDP account (eligibility criteria)

To open a CDP account, you must first meet the following criteria:

• Must be 18 years old
• Cannot be an undischarged bankrupt
• Must have an existing Singapore bank account from one of these banks (you will be required to provide the bank details): Citibank, DBS/POSB, HSBC, Maybank, OCBC, SCB or UOB. This is for the Direct Crediting Service (DCS) which allows you to receive dividends and cash distributions directly into the designated bank account.  

You would also be required to provide additional documents upon application, especially for non-Singapore residents. 

How do you open a CDP account

Method 1: Sign up using MyInfo (Singapore Citizens and PRs)

You can open a CDP account directly on the SGX platform with the use of MyInfo via SingPass. With MyInfo, most of the information required is already prefilled for you. You also save the hassle of having to provide supporting documents. 

Method 2: Sign up with an online form 

You can opt to sign up with an online form if you do not have MyInfo available, especially for non-citizens in Singapore. This method would be more time consuming as you’ll have to provide documents including: 

• Primary support documents (e.g. NRIC, passport)
• Secondary Support Document (e.g. bank statement, CPF statement or notice of tax assessment)
• Photographed/Scanned Copy of Signature
• Tax Identification Number (TIN) if you have a tax residency status outside Singapore

Previously, you could also head down to CDP Customer Service Centre to open the account, but due to Covid-19, CDP has been encouraging users to go digital.

Method 3: Sign up when you open your brokerage account

Lastly, you can also apply for a CDP account when you are opening a brokerage account. This includes the likes of DBS Vickers, OCBC Securities, UOB Kay Hian, Phillip Securities (POEMS), iFAST Financial (FSMOne) and more. Since you would need both a brokerage account and a CDP account to start trading, you can fill in both forms which your broker will have available. 

Once you apply for a CDP account via one of the three methods, you will get your CDP account number in 15 minutes.

However, it usually takes an average of 10 business days from the time you submit the account application form to the time that you receive notifications from CDP on the opening of the CDP Securities.

Tips on how to use your CDP account 

Your CDP account does more than just store your stocks. Here are five tips to help you make the most of your existing CDP account. 

1. Get an overview of your portfolio 

With all your stock holdings credited into your CDP account, you get an overview of all the assets you’re holding, the total market value as well as the total profit and loss. Your portfolio is further broken down by:

• Product type (e.g. stocks, corporate bonds, REITs) 
• Sector (e.g. financial and insurance activities, manufacturing, real estate activities, information and communications, health and social services etc.)

This can help you to point out the gaps in your portfolio, to see if you are overweight in some sectors or if you are lacking diversification. 

2. View your current stock holdings

You can view all your current stock holdings under ‘Investment Details’ of your portfolio. This shows the stocks that you have under your name, as well as: 

• How many units of the stock you have 
• The current market price 
• The unit cost (e.g. the purchase price), which can be keyed in by the user
• Current market value of the stock 
• Profit and loss of that particular stock

Unless you store this stock information elsewhere, such as in an excel sheet of your own, you can use this function to keep track of the stocks you have and their overall performance.

3. Check your dividend payouts and monthly transactions

Chances are, you can view your dividend payouts anytime in the bank account that is linked to your CDP. However, it often gets lost under the many transactions carried out in your bank account. 

Using the CDP, you can check the stock which gave or will be giving dividends for the month under the ‘Payouts’ section of your portfolio. You are also provided with all the details including: 

• The date that you will receive the dividend 
• How many units you have (that will be entitled to the dividend payout) 
• Payment rate (how much you will receive for each unit held)
• The amount you will receive

You can also check your monthly share transactions and download the monthly CDP Securities Account e-statement. 

4. Use the tools SGX has available 

You can also use the various (free) tools SGX has available within the platform for your own investment purposes. These tools and functions include: 

• A stock screener: Screen stocks based on factors such as market cap, total revenue, price-earnings ratio (P/E), yield, return on equity (ROE), sector and more. 
• Find securities by product type: Stocks, REITs, Business Trust, ETFs, Structured Warrants, DLC, SGS Bonds, Retail BOnds and more. You can even add any product across the different types into your ‘Favourites’ list (much like a Watchlist).
• View company announcements and corporate actions: This includes all the details you will need to know as a shareholder (or even as a non-shareholder), such as the date and time of broadcast, details and attachments to refer to for the announcement.
• Read securities-related market updates: This includes updates and analysis on new products, earnings, sectors and more. You can even filter these updates based on the name of the stock, asset class, sector or time period.

5. Overview of all your investment related accounts 

Unlike a CDP account, SingPass account and CPF account where you only have one under your name, you can have multiple brokerage accounts with different brokerage firms. 

In your CDP account, under your profile, you can find all your broker account(s). This includes the brokerage firm, your trading account number, when the account was opened and if they are still active. This overview helps you to keep track of your brokerage accounts and also serve as a reminder to close the ones you’re not using. 

Under this same section, you can also find the details of the account that is linked to your CDP under the Direct Crediting Service (DCS). This is the bank account that your dividends will be paid to. 

Lastly, you can also turn on the notifications to receive updates from CDP via SMS or email. This could be notifications for your account statement and market updates. 

If you’re ready to open your CDP account, you can visit the CDP website here. 

This article was first published in SingSaver.com.sg.