FX drag calculator:
what currency conversion actually costs you
“Commission-free” doesn’t mean free. FX markups and fixed conversion fees are paid on every conversion, and the money they take stops compounding. This calculator estimates that cost and lets you compare two workflows side by side to see what switching saves.
Some of the links on this site are affiliate links, meaning we may earn a commission at no extra cost to you if you sign up through them. This does not affect our reviews or recommendations — we only feature products we genuinely believe are useful for investors. This site provides educational content only, not personalized investment advice. Investments can lose value and past performance does not guarantee future results. You are responsible for your own financial decisions and for confirming the tax and legal rules that apply in your country.
TL;DR
- Total nominal fees paid on FX conversions over your horizon.
- Lost compounding: the growth those fees would have earned if they had stayed invested.
- Total cost: the end value you give up, with each fee counted once.
- The saving from moving from Scenario A to Scenario B, and B’s cost as a share of A’s.
- ETF bid/ask spreads, which are a separate execution cost.
- Broker commissions or platform custody fees.
- Currency risk: this models conversion cost, not price movement.
- Taxes at any level.
Compare two FX workflows
Enter your shared parameters once, set the FX cost for each scenario, and see how the difference compounds over your horizon. Broker presets load the published figure named on the button; example presets are illustrative inputs, not quotes from any provider.
What FX drag actually is
Four components, and the calculator models the first, second and fourth directly.
| Component | What it is | In the calculator |
|---|---|---|
| FX spread / markup | The gap between the mid-market rate and your executed rate, or a percentage fee on the amount converted | FX markup / spread input |
| Fixed fee / minimum | A flat charge per conversion, which weighs more on small conversions than on large ones | Fixed fee per conversion input |
| FX churn | Repeated conversions from switching brokers, tickers or plans, each paying the markup again | Not modelled; see the round-trip note below |
| Lost compounding | Growth the fees would have earned if they had stayed invested | Lost compounding result |
Every fee paid is money that stops compounding. At €1.25/month in FX fees over 20 years at 7%, the €300 in fees becomes about €634 of lost end value, of which about €334 is compounding. The longer the horizon, the larger the compounding share.
Investors whose account currency differs from the currency of what they buy pay the markup on every conversion. A monthly purchase repeats it twelve times a year, and no single transaction shows the running total.
How to reduce FX drag
Four levers, starting with the one that costs nothing to apply.
Don’t convert back and forth because you’re switching tickers, plans or brokers. Converting EUR→USD, then USD→EUR when you change plans, then EUR→USD again pays the markup three times before a single return is earned. Decide once and keep the setup.
Deposit in your base currency, convert deliberately, hold the foreign currency balance and buy from it. At Interactive Brokers a spot FX order costs 0.20 bp of trade value with a minimum of USD 2.00 per order (Tier I), so one conversion can fund several purchases.
If your provider charges a flat fee per conversion, convert larger amounts less frequently. A €2 fixed fee on a €100 monthly buy is 2%. Fixed-fee percentages depend on the conversion size: see the FX drag study for its USD worked example.
EUR-listed UCITS ETFs bought from a EUR account avoid a conversion on each purchase. The fund’s underlying currency exposure stays the same. Currency-hedged share classes are a separate decision: see hedged vs unhedged ETFs.
Real-world FX workflows compared
The calculator models the cost of one workflow at a time. Which workflow you choose, and whether you switch between them, matters as much as the per-conversion rate.
| Workflow | How it works | What to watch |
|---|---|---|
| Automatic FX on every buy | The broker converts at the point of each purchase. DEGIRO’s Auto FX converts foreign currency automatically to and from the local currency of the Personal Page. | The markup is paid on every purchase |
| Manual monthly conversion | Convert once a month, then buy from the currency balance | One conversion covers all buys that month |
| Quarterly batch conversion | Convert every three months in a larger amount and draw on the balance | Cash waits between contribution and conversion |
| EUR-listed UCITS ETFs | Buy EUR-priced shares; no per-trade conversion from a EUR account | Underlying currency exposure is unchanged |
| Multi-currency cash balance | Hold a USD balance, convert deliberately, buy from it over several months | Idle cash if the balance sits too long |
| Foreign-currency dividends | Trade Republic converts foreign dividends and corporate-action proceeds to EUR with a margin. Scalable Capital’s price list converts foreign-currency turnover, such as a USD dividend, with a markup. | A conversion on each payment, separate from the purchase |
How to check your provider’s real FX cost
Benchmark the rate you are quoted against a mid-market reference, then compare it with what each provider publishes.
- Find the mid-market rate. Note a mid-market reference rate at the moment you are about to convert. This is the neutral benchmark before any markup.
- Record your provider’s quote. Open the conversion screen and note the quoted rate before you confirm.
- Calculate the difference. Subtract the quoted rate from the mid-market rate, divide by the mid-market rate and multiply by 100. Example: mid-market 1.0850, quote 1.0820, (1.0850 − 1.0820) ÷ 1.0850 × 100 = 0.28%. Enter that figure as the FX markup in the calculator above.
- Repeat once. Take a second reading on a separate day and average the two.
| Provider | FX cost as the provider publishes it | Scope |
|---|---|---|
| DEGIRO | Auto FX (default) 0.25%, included in the transaction price. Manual FX EUR 10.00 + 0.25%. | Manual FX on the NL, DE, FR, IE and CH schedules; no manual FX line on the UK schedule |
| Saxo | 0.25% currency conversion cost | Netherlands and Belgium schedules, all tiers |
| Interactive Brokers | AutoFX: 0.03% added to or subtracted from the exchange rate, no separate commission. Spot FX order: 0.20 bp of trade value, minimum USD 2.00 per order (Tier I). | IBKR states AutoFX applies to cash accounts and buy orders only |
| Trade Republic | No percentage: FX on purchases is embedded in the price, with no separate line and no published size. Foreign dividends are converted with margins published as absolute amounts per currency, not percentages. | Card payments and foreign ATM withdrawals: currency conversion EUR 0 |
| Scalable Capital | Foreign-currency turnover is converted at the buy or sell rate plus a surcharge or minus a discount; the price list does not state its size. | Price list section E VI |
| Wise | Converting money: fee varies by currency, from 0.2%. Wise states it uses only the mid-market rate. | Wise pricing page for Estonia; no subscriptions or plans |
| Revolut (Standard plan) | Revolut’s own exchange rate. No exchange fee on weekdays within the EUR 1,000 monthly exchange limit; a fair usage fee applies above it. 1% fee on weekend exchanges. | Weekend: 5pm Friday to 6pm Sunday, New York time |
Sources: DEGIRO, Saxo, Interactive Brokers, Trade Republic and Scalable Capital published fee documents, see our methodology. Wise: pricing page (Estonia). Revolut: Personal Fees (Standard), Revolut Bank UAB. Wise and Revolut figures read in September 2026.
Trading currency ≠ currency exposure
The currency an ETF trades in is not the currency risk inside it. Confusing the two leads to both over- and under-optimising FX costs.
Buying a EUR-listed UCITS ETF from a EUR account avoids a conversion on each purchase, so no FX markup is paid when you invest. The underlying assets still move with exchange rates, which is currency risk rather than drag, but your transactions stay in euros.
If the fund holds USD-priced assets and USD strengthens against EUR, the fund’s EUR price rises; if USD weakens, it falls, whatever currency you bought it in. The EUR listing removes the conversion, not the exposure.
When does FX optimisation actually matter?
The worked examples below compare a 0.25% markup with a 0.03% markup at a 7% assumed annual return. They are illustrations, not quotes.
At €150/month with a 0.25% markup, the annual FX cost is €4.50. Fixed fees weigh more at this size: a €2 flat fee on a €50 conversion is 4%.
At €1,000/month, moving from a 0.25% markup to a 0.03% markup saves about €26/year in fees: about €530 over 20 years, or roughly €1,100 of lost end value once compounding is included.
At €5,000 per quarterly conversion, the difference between 0.25% and 0.03% is €11 per conversion, €44/year. At 7% over 20 years, that €11 a quarter adds up to roughly €1,850 of lost end value.
Want the full cost model in a spreadsheet?
The EU Investor Cost Toolkit takes this calculator’s approach into a spreadsheet you can adapt to your own brokers and contributions. Start with the free sample to see how it is laid out.
Educational content only — not personalised investment or tax advice.
Go deeper
Frequently asked questions
Is FX drag the same thing as FX risk?
No. FX risk is exchange rate movement affecting your returns: EUR/USD going up or down changes what your USD assets are worth in euros. FX drag is what you pay to execute the conversion itself: the spread, markup and fixed fees. You pay FX drag even if exchange rates never move, and you can reduce it without taking any view on currency direction.
How do I find my broker’s FX markup?
Compare the rate your broker quotes with a mid-market reference rate at the same moment, then express the gap as a percentage of the mid-market rate. Example: mid-market 1.0850, broker quote 1.0820, markup (1.0850 – 1.0820) / 1.0850 x 100 = 0.28%. Repeat on a second day and average the two readings.
Does conversion frequency matter if the FX cost is just a percentage?
If the cost is purely a percentage and your total contributions are fixed, total fees are the same whatever the frequency. Frequency matters when there is a fixed fee per conversion: converting €200 monthly with a €2 fixed fee costs 1% per conversion, while converting €2,400 once a year costs 0.08%. Converting less frequently also means cash waits longer before it is invested.
If I buy EUR-denominated UCITS ETFs, do I avoid FX drag?
You avoid a conversion on each purchase because you buy in your account’s base currency. The currency exposure of the fund’s holdings does not change. Trading-currency convenience and underlying currency exposure are different things: avoiding conversion drag does not remove currency exposure.
Which FX mistake is avoidable?
FX churn: converting back and forth because you keep switching tickers, brokers or allocation plans. Each round trip pays the markup on both legs. A single workflow kept in place avoids paying it again, even if a lower per-conversion rate exists elsewhere.
Should I optimise TER or FX first?
It depends on the horizon. A markup is paid once per conversion; a TER gap is paid every year on the whole balance. A 0.25% markup equals 5 years of a 0.05 percentage-point TER gap on the same money, before compounding. Over shorter holding periods the markup weighs more; over longer ones the TER gap does. The calculator above models the markup side only.
Are currency conversions more expensive at weekends?
It depends on the provider. Revolut’s Standard-plan fee schedule states a 1% fee on money currency exchanges made between 5pm New York time on Friday and 6pm New York time on Sunday. Wise’s pricing page for Estonia lists a conversion fee that varies by currency, from 0.2%, and states that it uses only the mid-market rate; it lists no weekend surcharge. Check your own provider’s fee page before converting outside weekday hours.
Does the calculator count fees twice?
No. Total cost is the future value of every fee at your chosen annual return, which is the end value you give up. Lost compounding is that total minus the fees themselves, so each fee is counted once. With the default inputs, Scenario A pays €300 in fees and gives up about €634 of end value, of which about €334 is compounding.
Some of the links on this site are affiliate links, meaning we may earn a commission at no extra cost to you if you sign up through them. This does not affect our reviews or recommendations — we only feature products we genuinely believe are useful for investors. This site provides educational content only, not personalized investment advice. Investments can lose value and past performance does not guarantee future results. You are responsible for your own financial decisions and for confirming the tax and legal rules that apply in your country.