FX Fees: The Silent One

"No FX fee" can still cost you 0.5%.

Buy a US share from a euro account and your euros become dollars.

Sell it, and the dollars become euros again.

Each dividend is changed too, every single time.

The cost often hides in the rate, not on the bill.

Have you ever compared your rate with a reference rate?

Education, not investment advice.

Read the sheet as text

FX Fees: The Silent One.
Buy a US share from a euro account: your money changes currency twice, or more.

The Round Trip.
You. Euro account.

You send €1,000.

Currency exchange. A toll on every trip.

Changed into dollars. Cost 0.5%: €5.

US share. You own $1,194.

Each dividend is changed too. 0.5% again.
You sell, and it is changed back. 0.5% again: about €5. Back to you: about €990.

A Fee You Can See.
Rate used: €1 = $1.20. FX fee 0.5%: minus €5. You get $1,194.
The fee is on your bill.

A Fee Hidden in the Rate.
Reference rate: €1 = $1.20. Your rate: €1 = $1.194. You get $1,194.
"No fee", but $6 less: 0.5%.

Same cost. Only one of them shows it.

Round Trip, for Example.
€1,000 minus €5 in, minus €5 out, is about €990.
About 1% gone, even if the share price did not move.
Every dividend and new buy pays it again.
0.5% is an example. Real costs differ a lot.

What to Look For.
The rate you got vs a reference rate: for example the ECB's daily rate, about 16:00 CET.
Auto-conversion of dividends: on? Then each one is changed at once.
Can you hold a dollar account? Keep dollars, change them when you choose.
Your yearly cost report. EU rule since 2018: FX costs must be in it.

redstartjournal.com · Education, not investment advice · CC BY-NC-ND 4.0

Sources (6)

Attention aux frais de change !Test-Achats Invest (Belgian consumer association), 23 November 2021: you pay a conversion cost when euros become another currency and again when the money comes back; banks and brokers usually put the cost inside the exchange rate instead of showing it; with automatic conversion, a dividend paid in a foreign currency is changed into euros at once; a foreign-currency account avoids needless conversions. Backs steps 2 to 4, "A Fee Hidden in the Rate" and the auto-conversion and dollar-account checks. Checked 2026-10-29.
Frais de change : comprendre les coûts de conversion en bourseTest-Achats Invest, lesson page (© 2026): the cost is paid twice, on the buy and on the sell; it is often hidden as a small percentage added to the official rate; some brokers let you hold several currencies. Its own worked example also uses 0.5%. Checked 2026-10-29.
Q&A: how should investment firms indicate the parts of the total costs and charges paid in or represented in an amount of foreign currencyESMA, 13 December 2023 (Article 50(3) of Delegated Regulation (EU) 2017/565): firms must include currency conversion costs in the costs shown before you invest and in the aggregated after-the-fact cost report. Backs "Your yearly cost report". Checked 2026-10-29.
Q&As on MiFID II and MiFIR investor protection topics (ESMA35-43-349)ESMA: MiFID II, MiFIR and their delegated acts apply from 3 January 2018; firms with an ongoing client relationship send yearly cost information. Backs "EU rule since 2018". Checked 2026-10-29.
Euro foreign exchange reference ratesEuropean Central Bank: published for information, usually around 16:00 CET every working day. Backs the reference-rate check. Checked 2026-10-29.
Regulation (EU) 2019/518 (cross-border payments, currency conversion charges)Article 3a(1), applying from 19 April 2020: for card payments, EU law makes the conversion charge show as a percentage mark-up over the latest ECB euro reference rate. Not on the sheet (it covers card payments, not investing); it backs the idea of measuring a rate against the ECB reference rate. Checked 2026-10-29.