Opening Interactive Brokers (IBKR) account with Global Trader App

If I’m a U.K. expat living in Cyprus what should I put as the base currency when registering to open an account with IBKR, EUR or USD?

This may be the first of a few questions over the coming days/weeks as I begin to navigate this process and optimise for tax purposes.

I also have to sell my holdings within Interactive Investor in the U.K. then transfer the cash into my U.K. bank account, before transferring the cash over to IBKR to buy VWCE.

I’m confused about all the currencies/potential fees/delays and I’m anxious as there’s significant sums of money involved.

Any help/advice is most welcomed. Thanks in advance.

Hi there,

Great question! Since you’re a UK expat living in Cyprus, choosing between EUR or USD as your base currency depends on how you plan to fund and trade:

  • Go with EUR if your daily expenses are in euros and you’re transferring money from a euro account. This avoids conversion fees when withdrawing or making euro-based transactions.
  • Go with USD if most of your investments (like VWCE) are in USD, as this minimises currency conversions when buying and selling assets.

Regarding your transfers, once you sell your holdings within Interactive Investor (II), your funds will initially be in GBP. Transferring them to your UK bank account won’t incur any fees, aside from standard bank processing times. When moving the money to IBKR, if your base currency is EUR or USD, you’ll need to convert it. IBKR offers low forex conversion fees, more cost-effective than most banks.

In conclusion, since you’ll be dealing with multiple currencies, minimising conversions is key to reducing unnecessary fees. If your future income and withdrawals will be in EUR, setting EUR as your base currency makes sense. Otherwise, if most of your investments are in USD, that might be the better long-term choice.

Best,
Samuel

Hi Samuel,

A little more detail, as both of your suggestions appear to apply.

I won’t be trading.

I will be making a single purchase of a global equity fund and a single purchase of a global government bond fund selecting an asset ratio split I am comfortable with.

I will then choose drawdown or choose the distributing version of the fund to receive dividends for the income to live off. Although I have read choosing the accumulation version is better for tax optimisation and adds greater compounding. So, not sure which to pick. Another decision I have to make…

I am no longer working, so there won’t be any additional funds I will be paying in. I will be just buying and letting compound interest work its magic.

If I choose VWCE will most of the underlying investments be in USD anyway??

For the foreseeable future I see myself as being in the EU, although in years to come this may or may not change.

Do IBKR automatically do these conversions for you?

Yes, the money is currently invested/held in GBP with II - sell Global All Cap - GBP to U.K. bank - GBP to IBKR - GBP to buy VWCE with IBKR (IBKR does conversion automatically).

Many thanks

Hi there,

Thanks for the extra details! Since you’re making one-time investments and living off the income, the main focus should be on minimising unnecessary currency conversions and ensuring smooth withdrawals.

To answer your questions:

  • VWCE (Vanguard FTSE All-World UCITS ETF) is denominated in EUR, but many of its underlying investments are in USD, as it tracks a global index. However, you’ll be trading it in EUR, so if you fund your IBKR account in EUR, you avoid extra conversions.
  • IBKR does not automatically convert currencies by default, but you can set up auto-conversion when placing a trade. You can also manually convert funds within IBKR at a low forex conversion fee.
  • If you transfer GBP to IBKR, you’ll need to convert it before buying VWCE, as VWCE trades in EUR.

Since you plan to stay in the EU for now and won’t be adding more funds, choosing EUR as your IBKR base currency could make withdrawals and account management simpler. But if your situation changes in the future, you can always update your approach.

Hope this helps! Let me know if you need more clarification.

Best,
Samuel