FX Fee (foreign exchange fee)

What is an FX fee?

An FX fee (foreign exchange fee) is what you pay when your pounds are converted into another currency to buy an investment. If you buy US shares or a fund that trades in dollars, your platform converts your pounds to dollars first and charges you for doing it.

How much are FX fees?

Typically 0.5% to 1.5% of the amount converted. Some platforms charge less, some more. A few offer free or low-cost FX if you hold money in foreign currency accounts.

On a £1,000 purchase, a 0.5% fee costs £5. On £10,000, it’s £50.

When do you pay FX fees?

Every time you buy or sell a foreign investment. That’s twice per round trip. Once when you buy, once when you sell. If you invest regularly in US shares, these fees add up.

How do you avoid FX fees?

Buy UK-listed funds that track foreign markets. A UK-listed global ETF holds US and other foreign shares, but you buy it in pounds. The fund handles the currency conversion at much lower rates than you’d pay as an individual.

Some platforms also offer multi-currency accounts where you can hold dollars or euros directly, avoiding repeated conversions.

Key points about FX fees

• Charged when buying foreign investments, to convert your pounds
• Typically 0.5% to 1.5%, varies by platform
• Paid twice. When you buy and when you sell
• Avoid by buying UK-listed funds. They handle currency internally