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FXCM fees explained

Dec 2018
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Overview of FXCM fees and charges

FXCM logo

It's safe to say that FXCM's fees are low in general. They either don't charge a brokerage fee for things other brokers do charge for, or they only charge a small amount. This means that you can use FXCM even in case you trade frequently like multiple times a week or daily.

Here's a high level overview of FXCM's fees

FXCM Fees snapshot
Assets Fee level Fee terms
US stock fee - Not available
EURUSD fee Low The fees are built into spread, 1.3 pips is the spread cost
US tech fund fee - Not available
Inactivity fee High $50 per year after one year of inactivity

FXCM fees
FXCM 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 FXCM fees with its closest competitors, Pepperstone and Oanda.

FXCM fees
FXCM trading fees

FXCM's trading fees are low which makes it suitable for you even if you trade often (i.e. multiple times a week).

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

Trading fees

FXCM's trading fees are low.

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

  • EURUSD, a popular currency pair
  • EURGBP, another popular currency pair

The typical trade means that you buy for $20,000 using 30:1 leverage, and sell it after a week.

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

Here is the verdict.

FXCM forex trading fees
FXCM Pepperstone Oanda
EURUSD benchmark fee $13.8 $17.6 $19.4
EURGBP benchmark fee $16.4 $14.1 $14.7

Financing rates

FXCM financing rates are low.

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

FXCM yearly financing rates
FXCM Pepperstone Oanda
Apple financing rate - - -
Vodafone financing rate - - -
EURUSD financing rate 3.1% 4.2% 4.5%
EURGBP financing rate 3.1% 3.0% 3.0%

FXCM fees
FXCM non-trading fees

When it comes to looking at all the non-trading fees FXCM 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 FXCM 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 FXCM stacks up in non-trading fees
FXCM Pepperstone Oanda
Withdrawal fee $0 $20 $35
Deposit fee 0 0 0
Inactivity fee Yes No Yes
Account fee No No No

FXCM fees
FXCM 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 FXCM is not different: you will see the exact same amount on your brokerage account that you sent by any of the deposit methods FXCM offers.

FXCM deposit methods
FXCM Pepperstone Oanda
Bank transfer Yes Yes Yes
Credit/Debit card Yes Yes Yes
Electronic wallets Yes Yes Yes
Deposit fee 0 0 0

FXCM fees
FXCM withdrawal fee

Unlike the majority of the online brokers we have reviewed FXCM 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.

FXCM withdrawal fees and options compared
FXCM Pepperstone Oanda
Bank transfer Yes Yes Yes
Credit/Debit card Yes Yes Yes
Electronic wallets Yes Yes Yes
Withdrawal fee $0 $20 $35

FXCM fees
FXCM inactivity fee

FXCM does apply an inactivity fee and it is $50 per year 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 FXCM charges an inactivity fee makes it less ideal for you if you are a buy and hold investor.

FXCM has high inactivity fee.

FXCM Pepperstone Oanda
Inactivity fee Yes No Yes
Inactivity fee $50 per year after one year of inactivity No inactivity fee €10 per month after 2 years of inactivity

Read more about FXCM 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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