Key takeaways
- Conversion markups can outweigh a lower commission.
- Match account currency to the products you trade where possible.
If your account is in one currency and the product trades in another, every trade, dividend and withdrawal may pass through a currency conversion. A markup of a fraction of a percent on each conversion can exceed the commission you were comparing.
| Where it appears | What to check |
|---|---|
| Deposit and withdrawal | Whether the bank or broker converts, and at what rate |
| Buying foreign shares | Automatic conversion markup versus a multi-currency balance |
| Dividends | Rate used to convert payouts |
| Margin or financing | Interest charged in the currency of the debit balance |
How to reduce the cost
- Open an account in your trading currency if you can. This avoids conversion on each trade.
- Use multi-currency wallets. Convert in larger, less frequent steps.
- Compare the markup to mid-market. Use a neutral reference rate on the day.
- Check both directions. Some brokers charge more on withdrawal.