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If you’re interested in investing you may well have heard of eToro as a way to buy and sell a range of assets including shares and crypto currencies, right from your smartphone. eToro focuses on social investing, which means you can make connections through their app and see how others are investing and building their portfolios. It’s already used by 25 million people - but before you get started you’ll want to learn more about the eToro fees you may need to pay. This eToro review and fee guide is for you.
Read on for all you need to know about eToro Malaysia - including how safe it is, how much you’ll pay in fees, and how to cut the costs of international investments with Wise.
|Table of contents
eToro is available for customers based in Malaysia, but it is not licensed by the Securities Commission Malaysia. That means that eToro appears in the Securities Commission Investor Alert List², and while Malaysian customers can access eToro’s services they won’t be offered the same protections in Malaysia they would be entitled to if they were using a provider which has a local licence.
That said, eToro is licensed in a range of countries and regions, including being covered by the Financial Conduct Authority in the UK, ASIC in Australia and regulatory bodies in the EU and EEA³. That means it’s subject to some pretty strict rules about how it operates and protects customers and their money.
If you decide to register an eToro account from Malaysia you’ll want to read through the terms and conditions carefully, including learning more about how the regulations are applied to your specific account. You’ll be creating an account with one of eToro’s globally registered entities - most likely eToro Australia - so it’s well worth taking a look at how that entity protects your money before you invest.
If you’ve heard of eToro then the chances are that you’ve also heard of their headline grabbing 0% commission offer. In fact, while eToro doesn’t charge anything for customers to open an account or to buy certain assets, there are a few eToro fees⁴ you should know about. These include withdrawal charges, spreads and currency conversion costs.
eToro is pretty upfront about these charges, and they’re all detailed on their website for prospective customers to see. We’ll also walk through them, and how they might impact an eToro Malaysia customer, next.
The eToro currency conversion fee is one key cost to understand before getting started with eToro in Malaysia. This applies because the eToro platform operates online in US dollars only. That means that although there’s no fee to deposit funds, you’ll need to pay a currency conversion fee if you’re adding funds to your account in MYR. There’s then also a currency conversion cost when you withdraw your funds back to your MYR account, plus the upfront withdrawal fee which applies regardless of currency.
Here’s how it works:
|eToro fee (Bronze, Silver and Gold account tiers)
|Deposit USD funds
|Currency conversion fee if depositing or withdrawing any currency other than USD
|Currency conversion fees apply, based on the currency involved and the deposit and withdrawal method. The fee used is the equivalent to 0 to 150 PIPs* on the mid-market exchange rate Conversion fees may be reduced or waived if you hold a Platinum or Diamond tier account. To upgrade your account you’ll need to hold equity in eToro of 25,000 USD for Platinum - or 250,000+ for Diamond
If you’re wondering what PIPs are, you’re not alone. PIP stands for percentage in point and is a measure of the smallest price change a currency can make - about 0.0001 of the exchange rate in question. Aside from the fact that this is an extra charge when you’re adding or withdrawing funds to your eToro account, it’s also pretty tricky to calculate.
One smart way to beat this charge is to use the Wise multi-currency account to withdraw USD directly without using eToro’s conversion service.
There’s a 5 USD fee whenever you withdraw funds from eToro. There’s also a minimum withdrawal amount of 30 USD - and as we noted above, you’ll need to pay any relevant currency conversion costs if you’re not withdrawing to a USD denominated account.
The minimum deposit amount that applies to your account will depend on where you live and how you’re paying. In Malaysia the minimum eToro deposit amounts are as follows⁵:
|eToro minimum deposit
|Minimum deposit by card
|Minimum deposit if you use a bank transfer
eToro doesn’t charge many fees for trading stocks and ETFs - although there are a few restrictions you’ll need to know about based on your specific account type. Here’s an overview:
|Additional broker fee
Other charges may apply when you trade - and if your account is registered with eToro Australia you’ll only be able to access the 0% commission trading when buying on the US stock exchange.
Depending on the assets you hold, you may find that eToro is obliged to withhold tax on some dividend payments⁶. This depends on where the company issuing the dividends is incorporated. If you’re taxed on your dividends but would not ordinarily need to pay tax on that income in your country of tax residence, you may be able to get a refund through the application of dual taxation treaties.
As with all things related to tax, it’s important to get professional and personal advice to make sure you’re complying with the law in Malaysia and in the country where the income is generated.
With CFDs you’ll be able to trade in an asset without actually owning it - however, there are extra costs for this type of trade. The charges can be fairly complex and depend on the assets involved - so if you’re trading currency you’ll need to know both the eToro forex spread and the relevant overnight fees, for example. Read through the full fee listing online before you dive into trading CFDs to make sure there are no surprise costs.
|Currency CFD spread
|From 1 PIP
|Commodities CFD spread
|From 2 PIPs
|Indices CFD spread
|From 0.75 points
|Stocks and ETFs CFD spread
|Crypto CFD spread
|Any position left open overnight is also subject to overnight fees which vary based on the specific CFD
You can use your eToro account to trade crypto currencies like bitcoin, ethereum and cardano - make sure you’re fully aware of the costs and risks involved, though. Even eToro’s own site carries a warning about the volatility of cryptocurrencies, which can be a risk for newer investors.
|Transfer crypto to eToro wallet
|0.5% for most currencies, with minimum cost of 1 USD, maximum of 50 USD
|When transferring funds there are also blockchain fees which can only be estimated prior to the transaction completing
Aside from those we’ve listed, eToro also has an inactivity fee. After 12 months of inactivity you’ll pay a 10 USD/month charge, making it well worth closing your account if you’ve decided not to use it any more.
eToro is one of several attractive services which appeal to people looking to trade and invest from their phones. As it’s not regulated in Malaysia you won’t get the full protections with eToro as you might with a locally registered investment platform. Nonetheless, eToro is trusted by millions of people around the world, and is subject to regulations in a range of countries and regions, making it a popular pick.
Before you start using eToro take some time to review the full range of costs and risks involved. Although eToro uses its headline grabbing 0% commission claim to turn heads, it’s not an entirely free service - it really depends on where your account is registered and how you decide to use it. One simple way to cut some of the costs involved with using eToro - and keep more of your money for yourself - is to withdraw funds in USD via your free Wise multi-currency account.
That means you can skip eToro’s complex currency conversion costs, and get the real mid-market rate with low, transparent fees with Wise instead.
This publication is provided for general information purposes and does not constitute legal, tax or other professional advice from Wise Payments Limited or its subsidiaries and its affiliates, and it is not intended as a substitute for obtaining advice from a financial advisor or any other professional.
We make no representations, warranties or guarantees, whether expressed or implied, that the content in the publication is accurate, complete or up to date.
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