What are IG’s currency conversion fees for spread bet or CFD accounts?
The need for currencies to be converted mainly depends on your trading account’s base currency, funding currency, conversion settings and the markets you’re trading.
Our standard FX conversion fee is 0.8% which is added to the best available exchange rate provided from several banks. To add our FX conversion fee, we multiply the underlying exchange rate by 1.008 before converting.
For example, if the GBP/USD exchange rate is 1.4, the FX conversion rate applicable would be 1.4 x 1.008 = 1.4112
By default, spread bet and CFD accounts are set to ‘instant’ conversion. This means we automatically convert any realised profit, loss, funding, dividend adjustments or commission to your base currency.
Example:
Say you’re buying $50 per point worth of Wallstreet (US30) and the base currency of your trading account is sterling. Since you have chosen to trade in USD which is different to your base currency, we need to convert any related transactions to sterling. We charge an admin fee of 0.8% on top of the conversion rate, which we calculate as: conversion rate x 1.008.
Assume the exchange rate is 1.3176 (£1 equals $1.3176). After adding our conversion fee of 0.8%, we get a conversion rate of 1.3176 x 1.008 = 1.3281*.
If Wallstreet increases by 15 points, your profit will be $750. This will be reflected as $750/1.3242 = £566.38 on your account. To calculate the admin fee charged, multiply your profit by 0.8%:
£566.38 profit x 0.8% = £4,53 FX conversion fee (already included – not charged separately)
*All examples are for illustrative purposes only. Please check the costs and charges before trading. Figures may not add up to a given total due to rounding.
You can also change your currency conversion settings to ‘daily’, which means conversions including deposits in a foreign currency will be made at the end of the day – usually 10pm (UK time). This may expose you to greater exchange risks due to a delayed conversion.
Where can I see the FX conversion fees I’ve paid?
To make transaction history statements more user friendly, we do not itemise FX conversion fees. Instead, conversion rates inclusive of the conversion fee are displayed and ‘costs and charges’ statements are provided annually every year your account has been open.
‘Cost and charges’ statements will include aggregated FX conversion fees paid throughout a 12 month period. These statements are sent via email and will be made accessible through your My IG dashboard.
To calculate a conversion fee charged, you can simply multiply the amount converted by 0.8%.
Example:
Say it costs £4,195.23 after conversion to purchase 10 shares of Tesla at $550 per share*.
FX conversion fee paid = £4,195.23 x 0.8% = £33,56
This amount will be added along with any other conversion fees to your ‘costs and charges’ statement.
*All examples are for illustrative purposes only. Please check the costs and charges before trading. Figures may not add up to a given total due to rounding.
