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Currency Accounts and Multiple Currencies at Your Broker: How to Save on Conversion
Key takeaways
- A broker's conversion fee is typically 0.1–0.5% of the amount converted — on every purchase.
- A multi-currency account lets you hold EUR or USD and buy without repeated conversion.
- Converting cheaply via Wise or Revolut and transferring to the broker is a legitimate strategy.
- Currency-hedged ETFs address a different problem than the conversion fee — don't confuse them.
- For regular DCA with small amounts, the conversion fee is relatively the largest cost — always calculate it.
The conversion fee is a hidden cost for every investor who buys ETFs denominated in EUR or USD from a CZK account — and it is paid on every purchase.
How conversion at a broker works
The broker receives CZK, automatically converts it to the purchase currency (usually EUR), and buys the ETF. For this conversion it charges a fee ranging from 0.1% to 0.5% of the volume. On CZK 10,000 it looks negligible (CZK 10–50), but with monthly DCA over 10 years at CZK 5,000 per month, the cumulative conversion fees add up to thousands of crowns.
A multi-currency account as the solution
Some brokers allow you to hold a EUR wallet separate from CZK. You convert CZK to EUR once — either via the broker or by your own means — and then buy ETFs in EUR without a recurring conversion fee. This option is available at, for example, Interactive Brokers or Degiro.
How to save on conversion
- Convert CZK to EUR externally via Wise, Revolut, or a bank with a low spread, then transfer EUR directly to the broker.
- Convert larger amounts less frequently — reducing the number of conversions.
- Check whether the broker offers a multi-currency account and what its own conversion fee is.
ETF currency risk: a different matter
The conversion fee is an operational cost. Portfolio currency risk (EUR/CZK movements) is a separate category — that is addressed by currency-hedged ETFs carrying the suffix "hedged". These are more expensive (higher TER) and neither gain nor lose from currency movements. For guidance on choosing the right ETF, see the ETF guide. More on accumulating vs. distributing ETFs in a separate article.
FAQ
What is a conversion fee at a broker?
A fee for converting one currency to another when buying a security denominated in a foreign currency. It is typically 0.1–0.5% of the transaction and is charged on every purchase if you don't hold the relevant currency in a multi-currency account.
How does a multi-currency account at a broker work?
It lets you hold multiple currencies separately. You convert once — either via the broker or more cheaply externally — and then buy ETFs in EUR without a recurring conversion fee. This saves most for investors doing regular DCA.
Is a currency-hedged ETF the same as a multi-currency account?
No. Currency hedging in an ETF protects against exchange rate movements affecting the value of the underlying assets. A multi-currency account addresses the operational conversion fee from CZK to EUR. They are completely different things.