Forex and Brokerage Fees Explained: Every Cost You Need to Know

• Bid-ask spread: the difference between the price you can buy and sell at — part of every trade, not always visible as a line item
• Commission: flat or percentage charge per trade, separate from the spread
• FX conversion fee: charged when buying/selling assets in a different currency from your account base currency
• Custody/platform fee: annual percentage charge on assets held (common at UK platforms: 0.25–0.45%/year)
• Inactivity fee: charged if no trades are made in a defined period (IBKR removed this in 2021; many others still charge)
• Withdrawal fee: charged to send money out of your broker account to a bank
• Foreign exchange markup: the difference between the interbank rate and the rate your broker actually uses — often undisclosed

To compare brokers honestly, build a cost model for your specific usage: how many trades per year, average trade size, base currency vs target currency, and annual portfolio size. Then apply each broker's fee schedule to estimate total annual cost. For a buy-and-hold investor making 12 trades per year at £500 each with a £10,000 portfolio: platform fee matters more than per-trade commission. For a frequent trader, commission per trade dominates.