Do you know Etoro takes 1.5% of your total investment fund?
Did you know that Etoro always charges you at least 1.5% of your funds, even via EtoroMoney if your currency is not USD? How to optimize conversion fees when investing on Etoro in EUR.
The conversion fee on Etoro
Etoro offers a trading platform in USD only.
It is worth knowing that Etoro always charges the conversion exchange fee, no matter what currency you deposit such as EUR or GBP. This article attempts to improve the efficiency of all available deposit methods.
Please note that I choose Saturday 20th April 2024 to have a stable exchange rate. Today, the EUR/USD rate is fixed at 1.0654. This information is used for the whole article.
We will do a simulation to understand this concept!
Imagine you deposit 10,000 EUR to Etoro by Debit Card.
You see the Etoro rate is 1.0504.
The number 150 in the Etoro conversion fee is calculated:
(1.0654 - 1.0504) * 10000 = 150When using eToro’s automatic conversion rate, you immediately lose $150 when depositing an amount equivalent to 1.5% of your total investment fund. The same thing happens when you withdraw the fund.
EtoroMoney
Following Etoro, the best deposit method is via EtoroMoney. It is free for deposit, but withdrawal costs you 1.5% of all the transactions.
It is worth noting that EtoroMoney availability is limited in some regions. Here is the link to check the full list.
The deposit conversion rate on EtoroMoney: 1.0654. But the withdrawal rate: 1.0504.
After all, even with EtoroMoney, you always lose 1.5% of your capital when withdrawing funds.
In this case, how do you optimize your deposit funds?
The answer is simple: Revolut.
Why Revolut?
Remember that eToro offers a trading platform in USD only. Therefore, if you can exchange your currency for USD with a minimal fee before depositing on Etoro, you optimize the conversion cost.
Strategy:
- Step 1: Exchange your funds in USD somewhere else with the minimum conversion fee.
- Step 2: Deposit and withdraw on Etoro in USD.
Straightforward, isn’t it?
After research, there are two possible solutions: Revolut and Wise. Deep dive into the comparison of the pros and cons between them, especially the exchange rate, I decide to use Revolut because:
- Revolut uses real-time exchange rates.
- It is free for the first 1,000 EUR in the Standard plan (free account).
- Deposit is instantly available in Etoro by debit card.
If you want to compare Revolut vs Wise, check this link.
At the time of writing, the EUR/USD rate on Revolut is approximately 1.0652.
Perhaps you wonder if you invest more than 1,000 EUR, it is not free anymore. Then how?
The answer: Revolut Metal plan.
Revolut Metal plan
The Metal plan is the cheapest option on Revolut which you can benefit from unlimited exchanges.
If you invest 10,000 USD in the simulation, you lose 150 USD equivalent to 140 EUR. However, it is for one deposit.
The Metal plan costs 165 EUR which is for 1 year with unlimited exchanged transactions. Note that you will be charged a 1% exchange at the weekend.
The yearly subscription is 165 EUR/year, but it is absolutely worth it, I show you why:
- Unlimited exchanges with no conversion fees.
- Saving accounts offer a 4.99% interest rate for USD and 3.84% for EUR (on 20th April 2024).
- Metal activates the cashback to 0.1% in Europe and UK, and 1% everywhere else.
- Benefited subscription of the 1137 EUR value (in France):
— Financial Times Standard Digital: 45 EUR/month → 540 EUR/year (link).
— Deliveroo Plus Silver: 2.99 EUR/month → 35 EUR/year (link).
— NordVPN Plus: 5.49EUR/month → 82 EUR/year (link).
— Freeletics: 249.99 EUR/year (link).
— Sleep Cycle Premium: 32.99 EUR/year (link).
— Tinder Gold: 1-year subscription 91.44 EUR/year.
— Picsart Pro: 48 EUR/year (link).
— Headspace: 57.99 EUR/year (link).
— Some other offers. - Fee-free ATM withdrawals of 800 EUR/month.
- A physical metal debit card.
- Everyday and travel insurance plans.
- Discounted airport lounges access.
Outro
Revolut Metal Plan is a great choice to optimize the exchange rate in depositing funds on Etoro combined with hugely advantageous features.
To do that:
Step 1: Open Revolut account.
Step 2: Exchange your funds to USD without a conversion fee on Revolut.
Step 3: Deposit and withdraw on Etoro in USD.
I hope this little research provides valuable insights for you!
If you want to quickly open the Etoro and Revolut accounts, you can support me by these referral links:
Hi, I’m Thierry Triet LAM. Thanks for reading my article about Do you know Etoro takes 1.5% of your total investment fund?
I’m a data analytics engineer passionate about digital transformation and investment.
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See you in the next blog.
