Introduction of FX Conversion Fee

Since the launch of our Invest and ISA services, our goal has always been to provide the best investing experience for free. Thanks to the scale, our business model has proven to be sustainable. Yet, we strive for Trading 212’s growth to be beyond numbers and reflect quality in every aspect of our service. And quality requires significant investments in people and infrastructure.

We have big plans for the next chapter in our development and we want to continue to be sustainable while investing hugely in quality and innovation.

To achieve this, starting in early April, we are introducing an FX conversion fee of 0.15% - among the lowest in the industry. This fee will be applied when you are trading with stocks or ETFs that are quoted in currencies different from your account’s currency.

If you are trading a stock that is quoted in a currency different from the currency of your account:

  • When executing an order, your account’s currency will be converted to the stock’s currency or the other way around, using the spot exchange rate + 0.15% FX fee.

EDIT: No longer applicable - Payment arising from Corporate Actions and Dividends that are paid in the underlying currency will be converted to the account’s currency using the spot exchange rate + 0.15% FX fee.

We can’t wait to excite you with the next level of features and quality improvements at Trading 212.

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I can live with 0.15%. Not sure it is the lowest, if I remember rightly Degiro charges 0.10%, but it seems reasonable compared to Feetrade’s 0.45%.

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@David Are T212 developing the multi currency account so customers can choose when to convert?

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Many voices in the past few months said the same thing: We agree to pay some small commissions if this helps Trading212 to improve quality, service and execution.
And 0.15% fee is more than decent, should be fine.
Onwards !

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Degiro is less: 0.10%. They also provide an alternative of manual conversion from a multicurrency account at cost of 0.02% + €10.

Compare buy 1 share Amazon.

Old T212: $3150
New T212: (0.15%) $3150 + $4.72
Degiro: (0.10% + fee) $3150 + $3.15 + £0.49

Of course Degiro does not provide the option to purchase fractional shares.

Currency conversion fees are not allowable costs when computing capital gains.

So far as I can tell Interactive Brokers charges 0.20 basis point, ie 0.002%, with a minimum charge of $2. So a round trip from GBP to $10000 USD and then back to GBP costs about $4.40. Whereas 0.15% costs $30. Trades with Trading 212 are free, whereas on Interactive Brokers 40 FB (cost about $10k) would be around $0.35 to buy and $0.35 to sell, which is deductible against the monthly fee of $10 (or $20).

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0.15% wouldn’t hurt, I can live with that too. Most of us would gladly pay if it would help to improve quality and development.

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good on the early comms but i’m now worried this is a sign of more fees to come, even if wrapped in the “lowest in industry” wrapper. there were reasons i chose T212 and now there are too many reasons gathering on the opposite end.

i’m not one of the “let’s find a new broker” people and i’m sure this was well thought out but given that all (i think ) of your users are non-US and the US stocks are the most traded, everyone is going to be losing out on this new announcement.

additionally, for pie investors like me whose transactions go into a few pounds and even pennies sometimes, this sounds like an impending change in minimum transaction amount since 0.15% of really small transactions will become another admin nightmare. @David - think about this last point if it hasn’t been yet.

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Rest assured, we are not going in that direction.

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The problem is that it is starting to become a pattern ie fees on funding sources (unavoidable for some non-UK users) and now this.

Unfortunately for t212 this is exactly the warning/criticism that many people said about t212 ie gradual imposition of fees once people had been signed up. Users were assured that this wouldn’t be the case and that Invest was self-sustaining, so you can understand the scepticism of some users.

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This is just disappointing.

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i’ve heard this before and yet here we are. i do sincerely hope you stand by what you just said. at the same time the auditor in me knows a business needs streams of revenue to survive such aggressive growth.

thank you for giving me a hobby during these messed up times, i feel empowered managing my own money but if that becomes expensive, i’ll sadly have to say goodbye to a very engaging hobby and revert back to paying someone else manage it :confused:

feature suggestion: i’m not sure if you’ve thought about this but please consider building this/these fees into the live results we get on the platform. the rules are currently very simplistic, so shouldn’t be difficult to build into a code. this helps blokes like me understand if tiny transactions (rebalancing for e.g.) are going to be lucrative and profitable in the future or whether we should just stick to self balancing funding.

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This was your stand out perk that made you differant from the competition’s.

Not happy with this at all. That’s 0.30% round trip loss immediately per trade, £30 fee on £10,000 trade.

I’ll probably go back to using interactive brokers where I can stay in my base currency for free and just borrow dollars to trade US stocks as it works out much cheaper than this.

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+1, definitely a necessary addition if not already planned

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Dear @AlexK ,

First I want to say I am a big fan of your product and what you have accomplished so far.

Unfortunately lately you have been adding fees and limitations on everything that was free on this plateform. Therefore I think we are in the right to ask you : what is next ? Are you considering to add commissions on stock trading ? Fees on non invested cash ? …

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A little disappointed with this, after just making a video saying 212 shouldn’t be adding any more fees. Still great the amount you offer for free, still the best, but just wasn’t expecting this.

But on the other hand, fx conversions cost money, and why should Trading 212 have to pay for them when it’s your choice to buy different currencies?

Overall, disappointed but I understand. I can see the push for the invest and ISA to be highly profitable and these cost savings make sense.

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@AlexK @David any reason why you can’t just add additional currencies to your account as required? Or allow multiple accounts?

If I want to deposit some money into a USD segmented portion, and then it’s your Bank that does the currency conversion.

In the case of Starling it would be zero fees.

ISA account

GBP £15,000

USD $4,000
EUR [ OPEN EURO SEGMENT OF YOUR ACCOUNT ]

Invest

GBP £2,000

USD $1,000
EUR €1,000

This way when I go to buy US stocks inside my ISA I have $4,000 of funds to play with.

Any sells the funds from selling US stocks go back into that USD segment.

Doesn’t matter when I buy or sell. No FX impact.

Edit: Only Invest could do this, @mrbarnier is correct.

No, ISA accounts can be held in GBP only. In accordance with HMRC rules you cannot hold foreign currency in an ISA, therefore if the base currency of a stock is not sterling, a currency conversion must be done at the time of trade.

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HMRC doesn’t allow foreign currencies inside ISA as far as I’m aware.

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On £10,000 trade it’s 15, not 30. If you do a “round trip” - £10,000 buy trade and then £10,000 sell trade - it should cost 30 for the two trades. And IB is not commission free.
AlexK just assured that they will not be introducing other fees, so this would not become a pattern.

@VicVega For all intents and purposes it is 0.3% as you have to take profit sometime. You don’t buy a stock and then use it to buy something at the store… you still have to sell it.

Not to nitpick it, but it would not be the first time Trading212 specifies they fully embrance a freemium model which is less and less free. I fully understand the need to be profitable, it is a business not a charity, but all of these come at a time where quality is going down, limitations are imposed and features delayed.

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