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Foreign Forex broker - deposit funds as profitably as possible
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Foreign Forex broker - deposit funds as profitably as possible

created Paweł MosionekNovember 7 2019

Foreign Forex broker - deposit funds as profitably as possible

Over the years, the quality of the services of Forex brokers has improved significantly. Certainly, the simultaneous development of technology and payment methods has proved to be helpful. In addition to standard transfers, alternative methods are offered with various, often incomprehensible procedures. In the maze of various information, you can easily get lost and have a problem with choosing the optimal method of depositing / withdrawing funds to our trading account. If you are also concerned about it - read on.

PLN account, account at a Polish bank

The best solution from the point of view of a Polish trader and deposit payment is to choose a domestic or foreign broker that allows you to keep accounts in PLN and has an account in a Polish bank. Then the whole process takes place quickly and cost-free - usually such brokers offer a parallel option of making payments via payment operators such as Przelewy24 and/ or BlueMedia. Thanks to this, the entire payment process is closed in a few minutes maximum. This is undoubtedly an advantage. However, it must be honestly admitted that only in some cases "no cost " transfers will be key enough to be a decisive factor in the selection of a given offer. In the end we plan to deposit once and then only pull out :).

For the broker to decide on introducing the above mentioned option, which will be directed only at Polish traders, he expects that it will meet with appropriate interest. In practice, not all globally operating companies see this as meaningful. Does this mean that we should give them up? Not necessarily. Even if the cost of withdrawal is PLN X, it may happen that saving e.g. on spreads, commissions or swaps over a given period of time may prove more profitable. There is still an element of transaction processing time, but in this article we will treat it as less important.

PLN account, foreign account

It happens that the broker we choose offers accounts in PLN, but there is no account in the Polish bank. What is the situation then?

The payment to the broker to the bank account is associated with the costs resulting from the price list of our bank. Since it is a foreign transfer, we must make a SWIFT transfer in PLN (note - not every bank allows it). Such a transfer is made within 24 hours of the order and reaches the recipient within 1-5 business days. In the case of PLN -> PLN transactions, there is no currency conversion.

SEPA transfer

The alternative is to choose the euro currency and make a European SEPA transfer, which is usually much cheaper - but there is the issue of currency conversion or currency change on the brokerage account to EUR. The cost of a SEPA transfer depends on the bank and ranges from PLN 3 to PLN 10. SWIFT transfers often depend on the transaction amount (0,2-0,5%) and include the minimum and maximum commission limits (PLN 20-250). Find out more here.

Foreign broker without accounts in PLN

It is worth emphasizing at the beginning that keeping a broker account in a currency other than PLN does not technically cause any major losses or profits on the trader's account. All calculations on the platform are made on a current basis at current rates from the platform. Our risk is a possible change in the exchange rate of the foreign currency against PLN in the periods between payment and withdrawal of funds. However, depending on the direction of the change in course, this may be our additional income or expense.

foreign forex broker depositIf your broker only offers an account in a foreign currency, then the situation begins to get a little complicated. The easiest way is to make a bank transfer from our account to your broker account. It's just that it's the most expensive way, because by transferring funds from PLN to USD, there will be a conversion at the bank's exchange rate, and there will also be SWIFT (or SEPA for the euro) transfer costs. A currency account and exchange of funds via, for example, a stationary exchange office (and payment in a branch), online currency exchange or alternative payment methods (about this in a moment). Thanks to this, costs are largely limited. The transaction takes from 1 to 5 business days, but my practice says it rarely takes more than 3 days.

Intermediary banks

In the case of a payment from the level of a foreign currency account, our cost is the SWIFT or SEPA transfer fee, but ... with foreign transfers, there may also be costs resulting from the participation of the so-called intermediary / correspondent banks (not present with SEPA). What is going on?

In short: there are a whole bunch of banks in the world and a signed agreement between them is required for the transaction to be carried out. In practice, we do not know whether our bank has a contract with a broker bank. If not, the entire transfer must go through an intermediary who will collect his commission (which we will not know until the transaction is completed). Whether the broker will participate in the transaction may also depend on the selected currency, i.e. for example, transferring from bank A to bank B 1000 USD does not have to be an additional cost, but for EUR 1000 may already occur. You can read more about correspondent banks here.

If you have never made foreign transfers, you may feel slightly lost at this stage. But take it easy, after the first three transfers everything will become very simple :).

Alternative methods

Credit / debit card

This is by far the most popular method of payment to foreign brokers. It's fast, free and secure. The operation time usually takes a maximum of several minutes and no fees are charged. Currency conversion will not occur if the card is kept in a currency compatible with the transaction currency (e.g. a card in USD, topping up the account in USD). Otherwise, you have to reckon with the conversion at the rate of your bank. It happens that card transactions have deposit limits for a single transaction - the workaround is to split the payments into several smaller ones.

What you need to know To be able to top up your account with a card, you must have limits set on the card for electronic transactions (all you need to do is contact the hotline or the definition in the on-line panel). The broker may ask you to remove the card - is there anything to be afraid of? No, as long as you cover the first 12 digits and the CVV2 code. Card transactions are insured. If it turns out that the broker you have chosen is a fraud and does not want to return your deposit, there is a good chance to quickly recover it (read the story of our reader who he recovered in this way from Maxitrade).

Revolut

revolut stocksIt is a revolution in the world of card transactions. The start-up, operating since 2015, allows you to make transactions with a debit card at interbank exchange rates, maintaining an "account" in one currency (the spread in traditional banks for EUR and USD is an average of 10 groszes, in Revolut 0 pennies, but there are limits). At the moment, not all brokers accept Revolut, but it will certainly change.

Skrill, PayPal, Neteller

These are the three most popular online payment operators. Each of them offers debit or virtual cards, as well as the possibility of making payments directly from the account. Most foreign brokers support all three. Funds can be added by bank transfer or card, quickly and pleasantly. Fees and currency conversion costs are a problem. If you do not keep an account with an intermediary in the currency compatible with that of the broker, then the conversion will take place at a rate similar to that known from commercial banks. Added to this is the transaction fee, although it is usually relatively small. Advantages? Speed ​​and simplicity. Using, for example, Skrill, we can quickly transfer funds between brokers or make purchases online. However, in terms of trading itself, this solution is more profitable only for smaller deposits.

Due to frequently changing fees, we do not publish a statement and we encourage you to compare them on the operators' websites.

Bitcoin Wallet

A rare form of payment, but there is high hope that it will become more popular. Bitcoin deposits are relatively quick (1-2 hours) and in most cases (and there aren't many of them) free. However, there is a considerable risk of "rate change" ...

From broker to broker

An extremely rare option, but it has, for example IC Markets. If you plan to move to another broker, it is worth checking to see if your broker offers it. This procedure is not too fast, because it takes from 2 to 5 business days, but it's still better than if we were to request a withdrawal from a given broker, wait for it to be credited to your account, and then make another one.

Withdrawals

Each trader, regardless of his level of advancement, assumes that he will withdraw funds more often than he deposited :). Practice often verifies this assumption quickly, but of course this aspect should also be noted. Variants are different.

Payment by bank transfer

Definitely the most popular method, but you have to split it into three variants.

  • Transfer from a Polish bank - fast and… free? Not necessarily. The posting time depends on the banks' elixir session and should not exceed 24 hours (or a few minutes in the case of Przelewy24 i BlueMedia). Usually it is free, but more and more often even Polish brokers decide to introduce fees, e.g. PLN 50 for the withdrawal of an amount lower than PLN 500. Thanks to this, they reduce the number of small payment transactions of several zlotys each. However, you can easily avoid such a fee - if your account has, for example, the last PLN 490, it is enough to add PLN 11 to it and then order the withdrawal of the entire sum.
  • Transfer from a foreign bank in PLN - It happens that such withdrawals are free, but do not take it for granted - check the broker's terms and conditions. There will be no currency conversion, and the implementation time is in practice 1-3 business days. Note - an intermediary bank may participate in the transaction.
  • Transfer from a foreign bank in a foreign currency - here it is quite the opposite. As a rule, foreign brokers transfer the cost of the transfer to the client, cutting him / her by X the amount paid. Check this cost before placing your transfer order. Note - an intermediary bank may participate in the transaction.

Payment by card

forex amlThe most important thing - this option is available only when the deposit has been paid by card. Due to the AML regulations (with Anti-money laudering - anti-money laundering) on ​​the card can only be withdrawn as much as you have deposited and in the same amounts. It works on the principle of a "return" of the transaction made. This means that if you have made a deposit of $ 300 and $ 500, you must make the same withdrawal transactions. What if there is less left on the account? One transaction is then ordered for the entire amount of the deposit remaining. What to do with your profits? Please use another withdrawal method such as bank transfer.

Of course, the funds do not go "to the card", but to the account associated with it 🙂

Other methods

When using the above-mentioned intermediaries, you do not have to worry about time - the payment is transferred to your account within several minutes of execution. The cost usually results from the broker's price list, as well as possible currency conversion. Note - it may happen that the broker, referring to the AML regulations, refuses you to pay out profits using an online operator - then the only option is to pay by bank transfer.

Which way is the best

There can be only one answer - it depends on the situation :). When using a foreign broker and a foreign currency account, the best deposit option will be using a currency card. Paying out up to the amount deposited would also work best, but what about the profits? Well, here we are dealing with many variables, so all that's left is a pure calculation on a specific example. Taking into account the available payment methods and current broker price lists, the mathematician will decide for himself. It may turn out that up to the amount X it will be more advantageous to use a Skrill operator, and above it, a bank transfer.

Cost optimization

To reduce the costs associated with withdrawing funds from foreign brokers, there are a few tricks you can apply. Without a doubt, the most popular and cheapest method of payment is to use a currency card and withdraw profits by bank transfer. However, what if you do not want to engage all profits in subsequent transactions and at the same time it does not pay you to withdraw relatively small amounts? The solution is a subaccount.

Virtually every broker allows you to open an additional account in the same currency. You can treat such an account as a "safe", to which you will transfer the earned profits and only after accumulating a larger amount, order one large transfer.

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About the Author
Paweł Mosionek
An active trader on the Forex market since 2006. Editor of the Forex Nawigator portal and editor-in-chief and co-creator of the ForexClub.pl website. Speaker at the "Focus on Forex" conference at the Warsaw School of Economics, "NetVision" at the Gdańsk University of Technology and "Financial Intelligence" at the University of Gdańsk. Twice winner of "Junior Trader" - investment game for students organized by DM XTB. Addicted to travel, motorbikes and parachuting.