How to fund US firstrade account

T

tim2070

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I've just opened a firstrade account and need to wire US Dollars in the account. My bank has quoted a rate that is 2% lower than the midmarket rate.

Obviously a cost of 2% to transfer the money to the share dealing account and another 2% to transfer back any gains would completely wipe out the benefits of the lower share dealing charges to be had from firstrade.

Has anyone got a US based E*trade or firstrade account?

Who do you use to transfer your money and what's the true cost?

By the way I'm transferring 20000 Euro
 
I transfer from a US$ a/c I have with Bank of Ireland. Maybe check if you can set up such an a/c and ask what are the exchange rates into this. Should be relatively cheap to transfer from US$ a/c.
 
I use Ulster Bank to transfer USD to my E*Trade account. If you open an E*Trade savings account (5.05% interest) you can wire money from Ulster Bank for 0.51 euro (2 day exchange).There is no fee for the incoming wire into the E*Trade account. Ulster Bank has decent rates of exchange as well.
 
Please quantify what you call a decent exchange rate?

For instance when the mid market rate was 1.3663 National Irish bank were offering 1.3425 which is about 2% divergence from the mid market rate.
 
If you exchange large sums of money the rate is under 2% divergence. In my case over 20,000EUR.
 
Therein lies the issue. 2% divergence to buy and 2% to sell makes about 4% cost to trade especially when you account the stockbrokers fees.

To make investing in the US worthwhile this would have to come down to 1% in currency charges.

I can buy and sell stocks on the ISE for 0.75% with NIB with 1% stamp duty making total cost of trading 2.5%.

Stocks on other euro exchanges cost less as no stamp duty. So looks like I'll stick with NIB.

Another plus is that I can trade from my current account simplying the process of funding and drawing down my investments.
 
Hi Tim
You should be able to get less than 1% outbound and inbound. Dont allow etrade to send it back to you directly as Ive seen as much as 6% taken in transfer fees and terrible fx rates
 
gobig said:
Hi Tim
You should be able to get less than 1% outbound and inbound. Dont allow etrade to send it back to you directly as Ive seen as much as 6% taken in transfer fees and terrible fx rates
Click to expand...

Can you tell me where?

Any of the banks I've talked to want muich more. There are a couple of currency traders based in london that look like they may be competitive but I'm wary of giving €20,000 to a stranger
 
If you set up an account with Interactive Brokers, then you could wire the 20,000 in euro to them and then convert into dollars at a rate similar to the current market rate. See http://www.interactivebrokers.com/en/general/education/faqs/accountFunding.php?ib_entity=uk and http://www.interactivebrokers.com/en/trading/exchanges.php?exch=idealfx&showcategories=&ib_entity=uk for more info on that.

If you want to stick with Firstrade, you should find better rates from some of the providers listed in this thread;

http://www.askaboutmoney.com/showthread.php?t=44326&highlight=foreign+exchange+rates
 
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