2 posts were merged into an existing topic: IBKR: Recurring Investments available!
I don‘t think the calculation above is correct…
First of all at Degiro you have the exchange connectivity fee and the spread commission (much better at IBKR)
Not mentioned the better currency exchange rates
Furthermore, I don’t understand where this 2USD flat rate comes from for IBKR?
Acc. to my understanding for IBKR it’s 0.05% of the transaction value with a min. of 0.35 so in the first two cases the trading fees should be 0.35
I personally don’t see any case that Degiro is cheaper compared to IBKR
$2.35 is $2 (min. currency exchange) + $0.35 (min. transaction fee)
With one of the „free“ ETFs at Degiro, you are left with the currency exchange of 0.25%.
Since I don‘t know the exact exchange rate/spread commission, I can’t use them in the calculation, but for lower investment amounts, the difference should be negligible.
Again sorry but that‘s not correct because who will just convert 100CHF again and again per month with a flat fee (so to pay 2% at 2USD fixed fee?).
And then if you also convert back 100USD to CHF… another 2% so you will have paid 4% in advance for exchange fees for non sense
You can convert all 1200CHF at least once and you pay the fixed exchange fee of 2 USD at once… or better even more
Furthermore, when we are comparing fees better to compare all the fees and not only one part of the fees (the exchange commission only)
I think this rate is correct based on my experience.
Last week, I exchanged 12kchf in usd for 1,95 chf fee on IB.
The same day, I bought 14kusd of VT for 0,52 chf.
It is a very good broker for the US market. I never tried to buy Swiss nor European shares.
IB looks well managed and audited in the US.
Just because it doesn‘t make sense to invest 100 CHF monthly with IBKR, it‘s still ok to include it, no (I didn‘t know how much the person was investing)?
And while it really is too expensive - which is what I tried to show - it doesn‘t make it less correct, does it?
Furthermore I don‘t see why anybody would change $100 back to CHF, as later when you take money out, you will surely have more than that amount.
So yes, in the case of 100 CHF monthly savings, it would make sense to do a yearly transaction.
Do you know the exact fee‘s applied in the background?
I am not saying it’s incorrect the 2 USD commission for exchange in IBKR, I am saying that ofcourse all kinds of fixed-tier fee systems are not in favor for small transactions. It’s not how is designed to be used
For instance imagine you have a fixed trading fee of 40-chf and you are investing 100-chf in a trade… Would it make any sense?
Yes, but even if someone wants to DCA 100 a month, can still convert all the amount at once and not having to pay 2 USD per exchange trade and still perfectly make the monthly DCA…
One part of the calculation itself is correct but doesn’t make any sense from design or user point of view
In Degiro you have the exchange connectivity fee for instance… Would it make any sense to compare investing in 20 different exchanges via Degiro vs IBKR?
Is it also included in the calculation?
Furthermore IBKR finds always a better trading price than Degiro (even if it‘s in the range of 0.01% better or don’t know exactly) and a better exchange rate.
So the calculation above is very simplistic and because it’s excluding certain facts and is only based on the exchange conversion fee and nothing else makes the case for Degiro which is misleading acc. to my opinion
Usually you don‘t have the 1200 upfront, that‘s why you DCA 100 a month. Otherwise you would have to wait 11 months to be able to start investing. I know, because I was in that situation once. So in those cases, IB is more expensive than Degiro. If someone can adjust the investing plan to get to an amount of 800+ per exchange, I would also go with IB.
It‘s funny that u mention connectivity fee because I have a task set up to read about it, as it’s a brand new fee for 2023. That fee is obviously a new negative point for Degiro, even if it has nothing to do with the transactions.
That‘s why I called it „quick calculation“.
Still for me it’s not making any sense to convert 100chf per month and each month - no matter in which situation you are - with a flat fee of 2 CHF
There are various pretty simple ways or workarounds to avoid those one (repetitively) and still perfectly invest 100 CHF per month in IBKR, so exactly make your monthly DCA
Degiro has 2.5 EUR annual connectivity fee per month per exchange (plus 0.25% for one time exchange conversion a year)
IBKR has a 2 USD exchange conversion fee per exchange.
I would equal those two out for simplification and I would just make a comparison only on the actual trading fees per platform - leaving completely outside the exchange rate fee - which for me would be a quick and simplistic fees comparison
It’s EUR 2.50 per year and exchange, as I understand it. I.e., as long as you don’t trade on more exchanges than necessary, it’s practically negligible. And there is no yearly fee for SIX.
As a reminder, it is possible to open a European Degiro account and feed it with preexchanged EUR.
On the other hand, you can also invest USD on margin at IB and exchange CHF from time to time.
Actually if you want to buy US ETFs, there is no way around IB. If you are buying European ETFs especially small amounts, buy with preexchanged EUR, and then it can be IB, European Degiro or flatex, not so important.
I guess what I am trying to say guys is that in 99% of the cases IBKR is cheaper than Degiro (esp. after latest changes).
Not considering several other intangible factors in favor of IBKR
Now of course if you want to prove otherwise you can always find a very specific case, filter only the parameters in favor or Degiro, make a very specific assumption of starting currency and and …and show that up to 1000 CHF is cheaper to invest in Degiro.)
for me that’s a misleading comparison and a misleading conclusion/message
PS. Not to be misunderstood …I don’t have any relationship or any benefit at all from IBKR, it’s just that Degiro used to be the lowest cost broker but not anymore
Again that’s exactly from the point of view that you are looking at it… if you plan to invest only in SIX you are correct.
But here we were talking about VT. So +2.5eur per year by default
Also recently I wanted to invest in France exchange. If I had invested 100EUR once(as the example above), 2.5EUR would have been 2.5% so no that negligible