Thatās a really good point actually @Richard.W, Iāve never thought about that.
I, at the moment, transfer USD from HSBC to revolut (over the free limit) convert to GBP and transfer back to HSBC and even that is cheaper than converting that internally in HSBC.
I also use interactive investor and the 1.5% fee is a thorn in my side. I wrote to them and ask multiple times to allow us to deposit non-gbp currencies and the answer was no. I guess thatās what T212 can use to prevent abuse of this system. We can keep the current no/low fee conversion but can only deposit/withdraw our home currency. (which is opposite of what @Vedran mentioned )
I find that too. At least Interactive Investor offers multi currency accounts. I transfet out from them to Revolut USD account, but as you say it is impossible to transfer USD in.
AJ Bell has no such multicurrency accounts, and charges 1% at each exchange. Canāt see how anyone could trade US stocks on that platform.
Good news is that AJ Bell has reduced transfer out fee from Ā£25 to Ā£9.95 with effect of 1.1.21. Iām now waiting for Trading 212 to launch in specie transfer. Iāve some legacy US positions with them dating from the day when they could do the W8-BEN but Interactive Investor could not.
I am also waiting on this to transfer my II-SIPP I got only one ālegacyā ETF before EU legislation hit (VNQ) but I mainly want to avoid buy/sell/convert fees, since my account is like 80% non-gbp. Iāll have to sell my HKG stocks but I guess Iām ok with it.
TR212 uses IBKR, and they do the real-time FX conversion for free, at 0% FX fee, for all their clients.
Thatās why T212 doesnāt charge FX, not because they decided to swallow the FX costs.
Provided that they bring multi currency accounts, which IBKR also supports natively, at almost 26 currencies, conversion is nearly spread free at their IDEAL.PRO FX exchange.
They charge 1/5th of a basis point or 0.2 bps, at 1 Billions USD in volume monthly, which is roughly what T212 does a month, given their recent email saying only their yearly card topups are several billion pounds.
I paid less than 5$ to buy 250.000$ from EUR. Minimum they charge is 2$, with minimum order of 25.000$. You can place orders with smaller value, but it will be entered as an odd lot order!
Since, T212 is already covering stock purchase commissions to IBKR for its customers, paying an even smaller commission to exchange currencies occasionally, is not a bad deal. Most will not abuse it because it is not leveraged, and theyāll only convert, either to withdraw or to buy stocks in their currency.
Thank you for the explanation. That is very interesting and promising so long as IBKR continues to offer this to Trading 212. Perhaps then the delay in rolling out multicurrency accounts has more to do with banking regulation and also scaling a reliable system to serve 1m clients. (I think Revolut has over 8m).
Iām not sure if anyone mentioned, but there is a huge benefit in having multi-currency account. For example I have USD account and I can technically use Revolut USD to deposit in, but how do I withdraw the money? T212 only allows same currency withdrawals.
I donāt mind paying the current exchange rate but what I donāt like is having to hedge against my own currency. 1.5% is a one off fee and you can balance your trades. If I exchange Ā£1000 into dollars I can hold dollars on that account for life.
If I hedge I can be exposed to 10% or sometimes more. Seen as the pound is low overall it can only really go one way
Two limit orders for 10 shares at $1000 per share can give an idea of the buy/sell currency spread. Buy is Ā£7318.88. Sell is Ā£7218.39. So spread is about 0.007%. There is no fee added by Trading 212. These are spot buy and sell rates.
You can open your account in a currency of your choice but then thatās the account set, you canāt change it.
You will then have to make sure that your deposits are in that currency before they arrive at t212 or they will get bounced back.
I would like to see a one off charge to convert into your chosen currency (like buying crypto) itās then your choice when to convert it back or continue investing with that currency
)
or sometimes more. Seen as the pound is low overall it can only really go one way
