Hey guys,
I’m wondering how the currency exchange fees are working on Trading212?
I always transfer GBP to my account and I mostly trade on US markets. Is there a fee every time I buy and sell a stock? If yes, can I change my base currency to USD and transfer USD to my account?
Hi, there are no currency exchange fees for Invest and ISA accounts.
Thanks for your quick response. I’m interested on CFD account
For CFD there is a 0.5% FX fee.
There is no currency exchange fee, but there is a small sell and buy spread. So you do lose a tiny bit on each fx exchange compared to that instant’s average between buy and sell spot rates. All other things being equal (no change in prices or fx rate) a round trip GBP-USD-GBP seems to cost about 0.03%, as close as I have been able to figure. That is based of something like sell and buy 1 GBP for USD 1.24000 and 1.24015, using target spread of 0.00015 on the CFD platform.
The nearest competitor amongst other brokers I know charges 0.1% each way, or 0.02% + 10 euros each way (Degiro). That will be on top of sell and buy price difference effect. The worst I have seen is 1.5% each way with Interactive Investor - however, they allow one to hold both a GBP and USD account, and then make fx exchange infrequently, or transfer out in USD to one’s other USD bank account where exchange to GBP can be done more cheaply (with Revolut). However, they only take GBP on the way in, so the 1.5% must be paid in one direction.
In previous answers we have been told that Bloomberg data is used by Trading 212 but that these rates are not free for Trading 212 to feed to customers. To estimate the rates used for Invest transactions we are advised to look at the sell and buy prices for USD/GBP on the CFD platform. However, the Bloomberg rates have tighter spread, so the true round trip cost is likely less than 0.03%.
Perhaps @George can give a like if I have correctly summarised the situation.
@Richard.W That’s a very good explanation, thank you!
So what I’m seeing between the Buy/Sell prices is the spread.
Maybe it’s not necessarily worth it to exchange GBP to USD before transferring money to T212.
I’m glad my research and explanation is helpful to you, and to see that T212 staff have given my post their likes.
I’m not sure what you mean about exchanging GBP to USD before transferring to T212. I thought that it was only possible to deposit into T212 in the base currency of your account. If your base currency in T212 is GBP then deposit must be made in GBP, no?
I realised I can also test the exchange rate using the practice account and information in the History. For buy and then immediately sell of USD-denominated SUWS ETF, I just now got USD/GBP rates of 1.23667 and 1.23682. This is spread of 0.012%, i.e. 1.2 per 10,000. That looks very good to me.