Bank Conversion Fee - Is There A Way To Avoid Being Ripped Off

Hi,

I'm a moderately successful trader. This is the extent of my bragging, as the strategy I employ requires funding many brokerage accounts, some of which are abroad (I'm in the UK) and oftentimes it is required to have them designated in USD, EUR, YEN, etc. The problem occurs when I wish to withdraw my profits back to my bank and have these foreign denominations converted back into GBP.

Case in point: I withdrew slightly over 33,000 USD from my broker on July 17th 2017, when the GBP/USD mid price rate of the day was in the region of 1.3167. Although I know that the bank is providing me a service and fully expected their charge, my expectation was still to receive around about 25k GBP into my account. This didn't happen. I actually received just north of 24k, which is totally absurd and unacceptable going forward.

This is the point that I appeal to you guys for an alternative approach. Are there any (legitimate and regulated!) services which I could use to offset this legally sanctioned daylight robbery by the banks? Please don't say Skrill or any of those ones. Their fees are equally extortionate. I was hoping to use something like:

https://www.xe.com/xemoneytransfer/uk/#howitworks

or

https://transferwise.com/

But in both cases there are restrictions which make the 'withdrawal from the brokers' part impossible.

Any assistance or advice in this matter will be gratefully received.

Kind regards,
Ian

How about Interactive Brokers? Deposit in any currency, and use Ideal for conversions less than $20k, Idealpro for $20k+. Both way cheaper than any bank spreads, and most online exchanges too. And of course you can trade with them too...

Hi Triphop,

Sorry for the delay. I did not realise you'd replied.

I think your suggestion will be the solution I need and I cannot believe I didn't think of it myself. Thank you so much for your help!

Ian

its true you can convert currencies very easily at Interactive Brokers.
be aware that IB give/charge interest over your deposits minus 1%
if you have US$ you will receive about 2-1 = 1% interest
for currencies below 1%, you will have to pay interest.
say Euro: CB rates 0% - 1% = you pay 1% on your euro deposits.
it pays to convert to higher interest currencies regularly.

You can choose some broker which offer the lowest fee for deposit and withdrawal.