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City Index fees explained

Apr 2019
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Overview of City Index fees and charges

City Index logo

When it comes to brokerage fees City Index shows a mixed picture: some fees are high but some are low. First you need to figure out your approach or you should use our questionnaire to be able to tell whether City Index fees are an advantage for you. Continue reading about City Index fees and charges to see if this is the right brokerage for you or a similar broker like IG or Plus500 is better for you.

Here's a high level overview of City Index's fees

City Index Fees snapshot
Assets Fee level Fee terms
US stock fee High $0.018 per share; min $10
EURUSD fee Low The fees are built into spread, 0.69 pips is the spread cost
US tech fund fee - Not available
Inactivity fee Average £12 per month after one year of inactivity

City Index fees
City Index fees explained

Online brokerages in general charge much lower brokerage fees than traditional brokerages do - this is largely due to the fact that online brokerages' businesses can be much better scaled: From a purely technical standpoint it doesn't make that much of a difference for them if they have 100 or 5000 clients.

This is not to say however that they don't have any fees at all. They make money by charging you at various events for various rates. Usually you need to keep an eye on these 3 types of fees:

  • Trading fees - these are brokerage fees that you pay when you actually do a trade, i.e. buying an Apple stock or an ETF. What you pay is either a commission, a spread or financing rate. Some brokers apply all of these.
    • A commission is either based on the traded volume or it is fixed.
    • A spread is the difference between the buy price and the sell price
    • Financing rate or overnight rate is charged when you hold your leveraged positions for more than one day.
  • Non-trading fees. These occur related to some operations you make in your account, i.e. depositing money to your account, withdrawing money from it or not trading for an extended amount of time.

We compare City Index fees with its closest competitors, IG and Plus500.

City Index fees
City Index trading fees

City Index's trading fees are mid-tier which means you need to pay special attention to asset classes with high trading fees.

Let's break down the trading fees into the different asset classes available at City Index.

Trading fees

City Index's trading fees are average.

It is super hard to compare trading fees for CFD brokers. What we did at Brokerchooser? Instead of quoting long fee tables, we compare brokers by calculating all fees of a typical trade for three assets.

For the assets we chose cleverly and arbitrarily:

  • Apple, a large US stock
  • Vodafone, a large European stock
  • EURUSD, a popular currency pair

The typical trade means buying a position, holding for one week, and selling it. For the volume we chose a $2,000 position for the stocks and $20,000 for the EURUSD.

This super catch-all benchmark includes spreads, commissions and financing costs for all brokers.

Here is the verdict.

City Index fees benchmarked
City Index IG Plus500
Apple benchmark fee $22.1 $34.9 $8.9
Vodafone benchmark fee $30.7 $30.5 $7.6
EURUSD benchmark fee $13.6 $12.3 $17.6

Financing rates

City Index financing rates are low.

If you want to trade on margin and prefer to hold your positions long, financing costs can be significant.

City Index yearly financing rates
City Index IG Plus500
Apple financing rate 5.8% 5.8% 13.9%
Vodafone financing rate 4.0% 4.0% 12.1%
EURUSD financing rate 3.3% 2.9% 4.5%
EURGBP financing rate 3.3% 2.9% 3.0%

City Index fees
City Index non-trading fees

When it comes to looking at all the non-trading fees City Index is an average broker. This means that some of the non-trading fees are high, but the others are low or not charged at all.

Non-trading fees include various brokerage fees and charges at City Index that you pay not related to buying and selling assets. Among some others, typical non trading fees are withdrawal fee, deposit fee, inactivity fee and account fee.

A high level overview of how City Index stacks up in non-trading fees
City Index IG Plus500
Withdrawal fee $0 $0 $0
Deposit fee 0 0 0
Inactivity fee Yes Yes Yes
Account fee No No No

City Index fees
City Index deposit fee

Deposit fees are applied when you send money to your trading account from your bank account. Usually brokers don't charge money for that and City Index is not different: you will see the exact same amount on your brokerage account that you sent by any of the deposit methods City Index offers.

City Index deposit methods
City Index IG Plus500
Bank transfer Yes Yes Yes
Credit/Debit card Yes Yes Yes
Electronic wallets No Yes Yes
Deposit fee 0 0 0

City Index fees
City Index withdrawal fee

Unlike the majority of the online brokers we have reviewed City Index does not charge a withdrawal fee. This means that you'll see the same amount of money on your bank account that you transferred from your brokerage account.

City Index withdrawal fees and options compared
City Index IG Plus500
Bank transfer Yes Yes Yes
Credit/Debit card Yes Yes Yes
Electronic wallets No Yes Yes
Withdrawal fee $0 $0 $0

City Index fees
City Index inactivity fee

City Index does apply an inactivity fee and it is £12 per month after one year of inactivity. This means that you need to be strategic about your trading activity to avoid getting charged after a longer time of no trade. The fact that City Index charges an inactivity fee makes it less ideal for you if you are a buy and hold investor.

City Index has average inactivity fee.

City Index IG Plus500
Inactivity fee Yes Yes Yes
Inactivity fee £12 per month after one year of inactivity £12 per month after 2 years of inactivity $10 per quarter after 3 months of inactivity

Read more about City Index inactivity fee on their own site.

AUTHOR

Gergely Korpos
Gergely Korpos
Co-founder, CPO
Gergely's aim is to bring more clarity into personal investing. He has 10 years of experience in financial markets with GE Money, KPMG and MOL. He concluded thousands of trades as a commodity trader and financial portfolio manager
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