Costs and taxes, worldwide
You cannot control the market. You can control almost everything else: the platform fee, the currency spread, the fund cost and how much tax you hand over unnecessarily. Here is the list I worked through myself when I left my bank's investing platform.
Referral link: ibkr.com/referral/marco1592. The bonus is paid by Interactive Brokers. Using it costs you nothing extra.
Most banks and retail platforms charge 0.2% to 0.5% of your whole portfolio every year, whether markets rise or fall. On USD 200,000 that is USD 400 to USD 1,000 a year for storage. Interactive Brokers charges nothing for a standard account, so this line simply disappears.
A bank or app broker typically takes 0.5% to 1.5% each time you convert into another currency. Interactive Brokers converts at close to the interbank rate for about 0.002%, minimum USD 2. If you invest USD 500 a month in a global fund from a different home currency, that gap alone is worth hundreds a year.
A USD 10 monthly plan is USD 120 a year, or USD 3,600 over 30 years, before you have bought a single share. Check whether the free trades you are paying for are actually worth more than the subscription.
A globally diversified index fund costs 0.06% to 0.22% a year. An actively managed bank fund often costs 1.2% or more and, on average, does not make that back. Choosing the cheap fund is the easiest decision on this page.
Every order has a fixed cost. Buying once a month instead of once a week cuts your commission bill by roughly three quarters without changing anything about your strategy.
For most non-US investors an Irish-domiciled fund is the efficient default: Ireland's treaty with the US cuts the withholding tax on the fund's US dividends to 15% and there is no US estate tax exposure. Where you can hold US-domiciled funds, they are cheaper but need a W-8BEN and estate tax planning.
Tax rules are national, but a handful of mechanics show up in nearly every country when you invest across borders. These are the ones worth understanding before you optimise anything else.
Without a valid W-8BEN, the US withholds 30% of your US dividends. With one on file, and a treaty between the US and your country of residence, that drops to 15% in most cases. IBKR collects the form during onboarding and reminds you to renew it every three years.
Most countries let you credit the foreign tax already withheld against the domestic tax on the same income, so the money is not taxed twice. The mechanism differs by country: a credit line in the tax return, a specific form, or an automatic offset. Use IBKR's Withholding Tax Report as your evidence.
Some countries tax realised gains at a flat rate, some at your income rate with a holding-period discount, and a few do not tax private capital gains at all. This single rule usually matters more to your after-tax return than the choice of broker, so find out how it works where you live before you build a strategy around it.
An accumulating share class reinvests dividends inside the fund. In some jurisdictions that genuinely defers tax; in others you are still taxed on the income the fund earned. Check your local treatment before assuming accumulating is automatically better.
An ISA, 401(k), IRA, PEA, pillar 3a, ISK or their local equivalent almost always beats optimising broker fees. Fill the tax-advantaged space you have, then invest the rest in a low-cost brokerage account.
Non-US persons holding US-domiciled securities above roughly USD 60,000 can be exposed to US estate tax, unless a treaty protects them. Irish-domiciled ETFs sidestep this entirely, which is a large part of why they are the default for investors outside the US.
Tax rules differ by country and by personal situation, and they change. This is general information from a private investor, not tax advice. Check with your local tax authority or an adviser before acting.
Moving to a broker without platform fees, without subscriptions and with near interbank currency conversion removes most of the list above in one afternoon.