Smart ways to fund your US brokerage account from Europe: tips and guidance

Opening a US brokerage account from Europe is no longer a tall order as there is a rather good selection of US brokers and trading platforms that accept international clients. Most of these brokers, however, offer only USD-denominated accounts, meaning that you will have to transfer USD to fund your account. If you have a personal bank account in a currency other than USD, you will be charged a conversion fee when topping up your account.

Major US brokerages that accept clients from Europe:

• Firstrade
• Interactive Brokers
• Lightspeed Trading
• Tastyworks
• ZacksTrade
• Charles Schwab
• TradeStation
• Alpaca Trading
• Passfolio
• TradeZero

Opening an account at a digital bank will potentially save you a lot in conversion fees if you are depositing funds into your US brokerage account in any currency other than USD. Digital banks like Revolut and Wise offer bank accounts in several currencies with great currency exchange rates, as well as free or cheap international bank transfers. Opening an account takes only a few minutes on your phone.

• European traders with a US brokerage account typically have to fund their accounts in USD
• Opening an account at a digital bank can save you conversion costs
• Wire transfers, widely accepted by US brokers, are costly transactions
• You may use international ACH transfers to deposit funds into your account at select US brokers with Wise
• Apex Clearing, a clearing house used by several US brokers, no longer accepts Wise transfers
• Some alternative financial service providers such as CurrencyFair are still cheaper than a traditional wire transfer

Although most US brokers that cater to international customers charge no deposit fees, wire transfers can prove costly with fees as high as $50 per transaction. One way to lower your deposit costs is to use an ACH transfer to send money to your US brokerage account. ACH is short for Automated Clearing House network, and it includes thousands of financial institutions. ACH transfers are electronic, bank-to-bank money transfers processed through this network. Banks and other financial service providers gather the transactions in batches and process them at set times, typically three times each business day. Although not the fastest way to move money around (ACH transfers typically take 1-2 business days to clear), ACH deposits have a huge advantage: in most cases they are free or cost very little. ACH is a US local payment network and ACH transfers are almost exclusively used within the US. Nevertheless, Europeans can also use so-called IATs, which are International ACH Transfers. IATs are categorized as ‘International’ when they originate from a foreign country. Most transfers originated through popular online international money transfer tools also typically qualify as an IAT.

If you live in Europe and have a US brokerage account, one of your best options is to open an USD bank account at Wise. You can do it in a few easy steps and you will be able to link your Wise account to your brokerage account in order to initiate an ACH transfer. Provided of course, you have an account at a US broker that accepts transfers from Wise. Some of these brokers are Passfolio and Alpaca Trading. By using Wise, you will be able to lower international transfer fees as the service provider connects bank accounts all over the world. You can send USD to any bank or brokerage account in the US that accepts ACH payments.

Make sure you link your brokerage account to your Wise account and select ACH transfer as the depositing method. You will need both the ACH routing number and the account number to be able to complete the transaction. Make sure you save the verification code you receive from the broker as you will need it to complete the transfer. Expect the first transfer to take longer, possibly as much as 5 business days. Once the system is fully set up, transfers may clear within the day.

ACH transfers with Revolut

For the time being, Revolut only supports ‘inbound’ IATs, meaning you can only receive money into your Revolut account through this payment method. This means that you can use Revolut to withdraw money from your brokerage account through an IAT but not for topping up your account.

In a negative development, you will find that some brokers, which have in the past accepted ACH transfers with Wise no longer do so. The reason for this is that Apex Clearing, a clearing firm that many brokers use to settle investment transactions, stopped accepting Wise and Revolut deposits. So if you used your Wise account to fund your tastyworks or TradeZero account from Europe through Wise, you will not be able to do so. In addition to the transfer not being cleared, you will be charged a hefty fee of between $30-$50 for the failed transaction. tastyworks, for instance, warns international clients that any attempt to link their Wise (formerly TransferWise) account to their tastyworks account will be rejected when trying to transfer funds. As a result, the clearing firm will charge a $30 ACH Reversal Fee. At TradeZero, which also uses the services of Apex Clearing, the ACH Reversal Fee is $50. Major US brokers that accept international clients and use Apex Clearing include:

• Firstrade
• Tastyworks
• TradeZero

At tastyworks, you may use CurrencyFair to transfer USD to your brokerage account but expect to pay $20 per transaction in fees as this is how much CurrencyFair’s intermediary bank charges. This may still prove a cheaper option than a wire transfer.