Currency exchange fees

Heyall,
i came across the question of what exchange fees are - there are umbers on the forum but i could not track them back to sources properly. ist the following stuff correct:

Interactive brokers lists on this page

so I guess 0.20 base points = 0.00002 = 0.002% ?

and, Cornertrader lists in this PDF on page 3

so I would conclude 0.00048 = 0.048%? this does not align with the number of 0.5% listed in various places in the forum.

If the above stated is true, CT would charge 25x more, but still really low 0.05%. for a yearky purchase of USD50k, this amounts to CHF 1 (minimum CHF 2) with IB ad CHF 24 with Cornertrader. still sucks, but much less than CHF240, which would apply in case of the 0.5% were true.

Who can clarify this?
thanks!

[solution]
corner trader adds a 0.5% currency exchange fee. IB does not.

Yes, IB fees are as low as that, max 0.002% or $2. However for small trades <25k, which IB calls “odd lots”, you’ll be paying a little bit more, something like $2-3 per conversion.

The spreads with IB are minimal, maybe a couple pips or so, much less than hourly volatility (10-20 pips according to https://www.investing.com/tools/forex-volatility-calculator), and you can give limit orders if you want to wait for and buy at a certain rate

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I think the 0.5% comes from the “Cash conversion fees” listed here. I don’t have an account on CT, so I don’t know how it works exactly.

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ahhhhh this one i messed. thanks, this completely answers my question!

and thx @hedgehog for pointing this out[quote=“hedgehog, post:2, topic:376”]
The spreads with IB are minimal, […] much less than hourly volatility
[/quote]

As I understand (but I’m not a customer, no first hand experience), CT gives just a CHF denominated account. Those forex spreads are for trading currency pairs, you can buy a pair, but at some point you will have to close the position, and convert back to CHF, so they don’t actually do physical delivery of currencies, it’s just for forex gamblers. Same with swissquote.

With IB you have a multi currency account, you can actually deposit, withdraw and convert different currencies with aforementioned commissions

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I think you can open positions in other currencies at CT too (I recall my account manager mentioning that I could do that later on if I wanted to).

Same at swissquote - you can have CHF, EUR, GBP, USD accounts, but currency conversion between them outside of their forex casino costs like 0.5-1%, not a few pips

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Yes, you can open additional accounts in other currencies at CT. A workaround for avoiding their 0.5% currency conversion commission would be to transfer the money already in the needed currency to them. For this you could for example open a Postfinance USD account (free as long as you keep at least 7500 CHF on all your PF accounts), where you can convert between currencies at their exchange rates.

Knoch, you miss one point:
to the knowledge of the forum, there is no broker or bank in switzeland that charges less than 0.5% per conversion. IB UK has almost interbank rates, and you need to ask others for ther other services mentioned here and there.
at CT, I recieved dividends from VWRD, which is denominated in USD, in CHF, so CT already converted that for me.

Concerning PF I have no direct experience about the conversion, but I am saying what PF told me on the telephone yesterday.

Do you have a USD account at CT or only CHF?

i did not have an usd acc with ct back when i was with ct

I’ve heard an unconfirmed rumour that PF can give spreads as low as 5 pips on the phone (ca.0.05%). You do need to call them and I presume this offer is for larger amounts. Their online ebanking rates are for suckers (1%)

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How can you tell that the rate is bad? What do you take as a correct benchmark, SNB change rate?

why, mid market rate of course. Forex is traded round the clock except weekends

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I just checked what you said using these sources:


I come up with the PF cost of 0.41% (these Forex courses change all the time) if I calculated it right:

This means that the exchange rate of PF will not really save you from 0.5% for the conversion taken by CT.

Today is a rather atypical day on forex, volatily is through the roof, almost 1% swings… They probably don’t change the rate often enough following these swings, try again later when it’s calmer, I’m sure you’ll see markups closer to 1% or so.

Also you should get your quotes from ebanking, and not that page you’re using with non binding “recommendations”. I’m sure they update THOSE quotes much more often as there they actually have money to lose.

Hello guys, nice post!

I actually fund my IB account with CHF and need to convert them to USD in order to buy USD based products. If I understood it correctly I have to search CHF.USD ticker and then do a Forex order and sell my CHF to get USD, am I right so far?

I am a bit scared as on the forex trader I cannot see anywhere my balance, as I am new to IB I want to avoid that my operation takes any money that I don’t own. I have no intention to get “loans” or margin positions. Has anyone experience with converting currencies in IB?

Check my answer here:

I suggest you start doing some experiences in the “paper/test” account before doing it live.

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