Do you know what brokers are charging you when you buy and sell shares?

Fsp Invest, 28 Jun. 2013

Tags: vat, strate, stt, brokerage, brokers, broker, broker charges, broker fees, buy and sell shares



I’m sure you’ve heard the saying: “You need to spend money to make money.”
The same thing applies when it comes to investing on the stock market. There are fees you’ll be charged when making trades. Here’s a breakdown of how much and what you’ll be charged when you to buy and sell shares…


“Costs vary according to the type of service offered and even across brokers offering the same service. The size of your transaction also affects the costs incurred, therefore you should be very careful to monitor all fees you’re charged,” says Red Hot Penny Shares’ Chief Investment Strategist, Francois Joubert.
 
Here’s how much buying and selling shares will cost you
 
1.    Brokerage fees: Your broker will charge you transaction fees when you buy or sell shares. Brokerage is usually about 1% of the total value of the transaction. You can negotiate brokerage with your broker, but most brokers charge a minimum fee of between R85 and R150 per transaction.

2.    Securities Transfer Tax (STT) is tax charged when buying shares. The rate for this tax is 0.25% of the total purchase price.

3.     Value Added Tax (VAT): You’ll be charged normal VAT charges of 14% on all brokerage and service fees.

4.    STRATE (Share Transactions Totally Electronic) is the fee the Johannesburg Stock Exchange’s (JSE) infrastructure will charge you to implement electronic settlement of securities in South Africa. Depending on the size of your trade you’ll be charged a minimum of R10.92 (excluding VAT) and a maximum of R54.59 (excluding VAT) of the value of the deal.

It’s important that you’re aware of the fees you’re charged. This will help you monitor them so you can plan your finances accordingly and invest with success.

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