Guide: How to Fund and Convert SGD to USD on IBKR (Manual vs Automatic)
Here’s a guide on how to fund your Interactive Brokers (IBKR) account as well as convert your SGD into USD for investment. The guide also compares between different methods of funding as well as the fee difference between manual and automatic, recurring conversions.
⚠️ Investing involves risk and Sethisfy.com is not liable for any loss, financial or otherwise. You are encouraged to exercise due diligence when signing up for any financial product, or investing based on the materials published on this site. None of the content here should be construed as financial advice.
Why use IBKR?
IBKR is well known in local investment circles as a good choice if you are looking for a low-cost broker. Some of its advantages include extremely competitive foreign currency exchange rates, low commissions, and access to Ireland-domiciled ETFs which generally benefit from lower dividend withholding taxes compared to US-listed ones. You can find out more info and sign up here.
While it may not matter that much when one’s investments are smaller, the savings can add up for larger portfolios. The downside, however, is that the user interface can be a bit more challenging to use than other platforms.
This article will hence be a part of a series of guides on how to use IBKR to invest, particularly for those who are unsure on how to get started so stay subscribed for updates.
Funding your IBKR account – PayNow vs eGIRO
- Open the IBKR app and tap Menu (☰)
- Tap Deposit Funds
- Choose to deposit by Instant Local Transfer via PayNow or Instant Local Transfer via eGIRO
| PayNow | eGIRO | |
|---|---|---|
| Setup | None | Linkage |
| Deposit Process | Generate and scan QR each time | Just input desired top-up amount |
| Transfer Time | Minutes to hours | Almost instant |
Personally, I prefer using eGIRO. After making the linkage with my bank account, deposits are as easy as inputting the desired amount and tapping a button. Funds also appear in my account almost immediately after, while PayNow transfers can take around half an hour based on my experience.
Get S$450 or 26,000 Max Miles upsized S$500 or 28,000 Max Miles with HSBC Cards! Limited time only, tap here to see eligible cards
Manual conversion to USD
- Tap Menu (☰), then Transfers
- Tap Convert Currencies, and tap Convert Currencies
- Tap Currency I Have and select SGD and input your desired amount
- Tap Currency I Want and the estimated amount will be shown
- Slide to Submit to confirm
The fee for manual conversions is 0.002% with a minimum of US$2.
Update: XY has helpfully provided this point to note for manual conversions if you are using a cash account
Automatic conversion to USD
For cash accounts, making a trade in USD will result in your SGD being automatically converted to USD. In margin accounts, however, doing a trade without performing a currency transaction first will result in a negative balance of USD.
For both cash and margin accounts, recurring investments will also trigger automatic currency conversions, and your SGD will be automatically converted into USD (when purchasing USD denominated counters).
The fee for automatic conversions is a spread of up to 0.03% with no minimum.
Fees – manual vs automatic conversion
While both manual and automatic conversion will enjoy similar exchange rates given by IBKR (which are possibly one of the best in the market), there are some fee differences between the methods of conversion:
| Manual | Automatic | |
|---|---|---|
| Exchange Rate | Very good | Very good |
| Fee | 0.002% | ~0.03% |
| Minimum Fee | US$2 | None |
Manual currency conversions incur a 0.002% fee with a minimum of US$2. This means that any amount up to US$100,000 will incur US$2.
For automatic currency conversions, IBKR will typically impose a spread up to 0.03%.
Based on this fee structure, manual conversion is better for amounts US$6,666.67 and up. So if you are converting amounts lower than this, you are better off with automatic currency conversions.
Of course, unless your amount is significantly larger than US$6,666.67, the difference in fees can be quite small. A US$10,000 amount, for instance, can incur around US$3 of fee under automatic conversions versus US$2 of fee for manual conversion. Some investors may happily pay a few extra dollars each month just so that their recurring investment is automatic.
You can see more details and sign up for IBKR here.
Subscribe for more deals and updates!
If you’re someone who wants to earn more from credit cards, savings accounts and other financial deals, stay subscribed to the Telegram or WhatsApp so you can be notified of news and deals. Remember to unmute and turn on notifications or the updates may not reach you.
