Currency Conversion

[robertbanking]

Hello you wonderful and very intelligent people, i truly hope you are having a good week and doing well.

I do note that when you buy US based stocks in GBP currency most brokers charge a very expensive FX fee. I am wanting to avoid this as much as possible. I kindly wondered please if anyone knows a good currency conversion site, where i can exchange GBP to USD at a good rate and then have this paid direct to my broker or a USD based bank account please? If anyone kindly had any thoughts on this i would be forever grateful and thankful.

Sending you lots of good wishes and i truly hope you are a massive success with your investing and you can enjoy life more. Take very good care.

[1nvest]

Some US stock exposure ETF's may also be listed/traded in Pounds for instance VUAG that is also a accumulating ETF (dividends automatically reinvested), which is ideal for holding within a ISA where you cannot hold foreign currencies and all USD dividends that otherwise incur FX conversion fees are instead just rolled up into the share price appreciation.

With ii brokerage you can convert once, trade many i.e. convert £100,000 into USD and then buy/sell USD priced stocks/fund using USD's and USD dividends are added to the amount of USD you hold within the account. You can hold many different currencies that way, just remember to specify which currency you are using when buying (or selling) choices of investments/funds.

ii's conversion fee is quite high, around 1.5% for smaller amounts such as dividends, that you can improve upon, but you need a for instance additional USD bank account that you add alongside your GBP bank account as linked accounts to the brokerage (ii) account. If you load that USD bank account with USD converted from GBP using a better rate, such as via searching/comparing ...

https://www.monito.com/en/compare/trans ... 0?tab=bank

then you can add USD funds to your ii account from that linked bank account.

Same in the reserve direction. Withdraw USD from ii into your USD bank account, and use a good/better rate elsewhere to convert that to GBP. The better rates likely will vary over time, no one specific continually best choice.

I've had a account with ii for years, since they were TD Waterhouse, converted some GBP to USD many years back and have bought/sold US assets with those dollars since, no additional FX conversion costs (all outside of ISA in main/general trading account). I didn't know that trick at the time and paid TD Waterhouse's FX conversion costs to do that FX. With hindsight I might have used the USD bank account method I've outlined above. Within ISA I strive to only hold US funds that can be bought/sold and pay dividends (or better still accumulate) using GBP ... such as VUAG.

I can't suggest a appropriate bank to act as a USD account, its a matter or reading/hunting around or hopefully someone might pipe in with a suggestion here. WISE and Revolut seem popular multi-currency banking choices, but I suspect their limits/amount are perhaps too low for anyone other than a very small/new investor.

Using that above search/compare link I note it says the best current option to be currencyfair that results in a 0.55% below mid FX GBP/USD exchange rate for a £100,000 amount converted to USD. I also note however that ii https://www.ii.co.uk/our-charges apply a 0.5% rate for £100K to £600K amounts (0.25% above that), whilst for less than £25K their margin is 1.5%. So the amount being converted also has bearing on what may be the better choice.