Investing in foreign stocks from Malaysia has never been an easy task for us Malaysians. In this post, we will discuss how you can fund and invest in US stocks using Interactive Broker (IBKR) with the lowest possible fees.
If you are looking for a way to withdraw your funds from IBKR, you can check out the step-by-step guide on how to withdraw money from IBKR to any Malaysian bank.
Before we begin, I also wrote a short piece about how to invest in US stocks with E*TRADE for free.
This blog post is updated as of 13 December 2021.
Disclaimer
The author of this blog post assumes no responsibility or liability for any errors or omissions in the content of this site. This information container in this site is provided on an “as is” basis with no guarantees of completeness, accuracy, usefulness or timeliness.
Disclosure
Bear in mind that some of the links in this post are referral links and if you go through them and sign up, I will earn a referral reward. Keep in mind that I link these companies and their products because of their quality and not because of the rewards I receive from your usage. The decision is yours, and whether or not you decide to use it is completely up to you.
Goals
- Learn to fund your IBKR account with InstaReM from your local bank with Ringgit (MYR)
- Receive your money in IBKR by creating a deposit
- Convert your local currency to USD to start buying foreign stocks in IBKR
Money Flow
Malaysia Bank (MYR) → InstaReM (SGD) → IBKR (receives SGD and converts to USD within IBKR)
In theory, we should be able to achieve the same outcome with HKD/EUR/SGD or any other currencies of that is accepted by IBKR. I have not tried it personally but I have read that it is possible.
Services Used ️
- Maybank (Or any Malaysia banking services)
- InstaReM (Money Transfer Provider)
- Interactive Broker, IBKR (US Broker)
Prerequisites
Skip to ‘Start Here’ section if you already have an account for each of the services above and do not need any brief introduction to them
1. Own any Malaysia Bank account
- Any local bank should work
- You’ll be transferring your local currency (MYR) to InstaReM Malaysia (MYR)
2. Create an account with InstaReM
Why use InstaReM vs. a traditional Foreign Telegraphic Transfer?
- Much, much better currency exchange rate
- Relatively low & transparent fee (0% to 1% of the total transaction amount)
- Fast & secure
- Simple registration can be done fully online
- Excellent customer service with Live Chat support
- A loyalty point system that provides some cash back based on the sender’s country. For Malaysia, every 100 InstaPoints translates to RM 6. You can read more about this here (up to 400 points per transaction)
What do you need to create an account with InstaReM?
- Mobile number
- Identity & address proof documents
Based on my personal experience, the entire account creation process only took me one business day.
3. Create an account with Interactive Broker (IBKR)
Are they safe?
Yes. Interactive Brokers LLC is a member of NYSE, FINRA, and SIPC and is regulated by the US Securities and Exchange Commission and the US Commodity Futures Trading Commission. Listed on NASDAQ, they are the largest electronic trading platform in the U.S. by the number of daily average revenue trades.
Can I register for an account online?
Yes. Their onboarding process is one of the simplest and smoothest of all the different brokers that I have used.
How are the fees like?
- $1 USD commission fee per trade
- Now, there are no more inactivity fee
- The waiver will be applicable for the first three full calendar months after the initial account funding
Start Here
- You should only start here once you have fulfilled all the prerequisites above
- Follow through Step A → Step B → Step C
Step A: Interactive Broker — Creating a deposit
Start by creating a deposit in IBKR to let IBKR know that you will be expecting an incoming transfer
- Login to the IBKR Client Portal → Portal Login with your newly created account
- At the top menu, click on Transfer & Pay → Transfer Funds
3. Make sure your currency of choice is Singapore Dollar (SGD)
4. Fill up the relevant details accordingly as shown below:
5. Your Bank Wire Instructions should appear before you and take note of that information as you will need this later in Step B
Step B: InstaReM — The middleman
Where your MYR gets converted to SGD and sent to IBKR
- Log in to your InstaReM account → At They Receive, insert the same amount as the deposit amount at Step A (IBKR) → Initiate Transfer
2. Click Add Recipient to add yourself as a new recipient for the first time.
Fill up the Recipient form accordingly based on Step A.5 → Save and Continue
3. Make sure you select the right recipient under Your Recipient → click Proceed to Payment
4. Select FPX Transfer, enter your Reason for Transfer, Source of Funds accordingly
5. On the same page, review the payment details, and enter any Coupon Code or InstaPoints to be claimed if you have any
6. After clicking Authorize & Pay, you will be prompted with OTP Verification
7. Proceed to make the secured FPX payment
8. After making the FPX payment for InstaReM, you should see these pages below 👇
Andddddddd… we are DONE funding our IBKR account 🥳
7. Within 2 business days (usually less), you should see that your IBKR account is funded ($100 SGD in this example), they’ll send you a notification too
- InstaReM will update you on the transaction status through emails
- To view your transaction status, look at the History tab in InstaReM
Step C: Interactive Broker — Convert currency (SGD → USD)
In order to purchase any US stocks, you need to have USD balance
Convert currency directly by going to Portfolio → Cash Report→ Convert Currency/Convert All to USD
Once you have USD balance in your account, you can start to purchase any US stocks or ETFs 🎊
FAQ❓
How much should I start with?
I would start with a minimum amount (RM 200) transaction on your first try. Customer support from InstaReM has been amazing thus far. I have tried multiple transactions with them and they are more than happy to help you with your transfers and refunds.
How can I withdraw money from IBKR?
You can read more about funds withdrawal here. This article is long enough on its own. 😂
What other options do I have if I do not want to use InstaReM?
Check out TransferWise.
Disclaimer: I have only tried using InstaReM to fund my IBKR account. Feel free to check out these options.
Is there a way to directly transfer in USD instead of SGD for now?
No. I tried this multiple times and it doesn’t seem to work at the moment I was writing this post. Generally speaking, IBKR doesn’t accept funds from a third party. IBKR needs to get the funds from you and your bank account.
InstaReM has your name, but they don’t use your bank account to transfer funds, so IBKR would automatically reject the fund in USD.
Can I use InstaReM to transfer money from IBKR to my local bank account?
No. Unless you have an InstaReM account in that particular country.
I am not an active trader, what choices do I have if I do not want to bear the cost of the inactivity fees?
I use E*TRADE more often as they do not have any trading commissions for stocks and inactivity fees. You can read more about it here. While it’s a nice alternative to IBKR, it does not offer the flexibility to invest outside of the US stock market.
Closing Note
If you are looking for referral links:
I only list out the key details of the services mentioned here, do your own research before using them.
For further discussion, you can check out this discussion on Lowyat for your reference.
Finally, a step-by-step guide on fund withdrawal can be found here. Good luck and feel free to leave a reply if you have any further questions! I will attend to them.
