In summary, this article talks about the cheapest way to withdraw via IC Markets (basically free) and my withdrawal experience with IC Markets using this cheapest method (PayPal). If you want to skip the details, scroll right to the bottom for the 2 cheapest ways to withdraw via IC Markets.
Note: I have received messages from some clients that they don’t have an option to withdraw from Paypal in their IC Markets accounts – This is because you haven’t deposited funds into your account via Paypal before. Just deposit the minimum deposit of USD200 (or equivalent in your preferred currency) using paypal, and the option will become available. Then you can withdraw free using Paypal!
I recently tried withdrawing from IC Markets using Paypal for the first time, since the other option of international bank wire was more costly AUD $20
The idea was, Paypal does not charge any fees when withdrawing to your bank account over $200. Below $200, there is a $1 fee.
This is true, but my PayPal balance is in USD and PayPal automatically converts this to my local currency (SGD), with no option to withdraw the PayPal balance in USD and Paypal’s exchange rates are more expensive. I would like my bank do the conversion instead. Rates: Paypal – 1USD to 1.342 SGD , my bank 1USD to 1.371 SGD, spot rate is 1.380
So at the end of the day, withdrawing from PayPal would cost about the same as doing a international wire from IC Markets to my local bank. Let’s break it down how this is so:
Let’s say I was withdrawing 1,500 USD.
International wire AUD20 + my bank charges SGD20, then convert $1,500USD to SGD at 1.371 (my bank’s rate) . The calculation is as follows: First converting USD to SGD: 1,500USD * 1.371 = 2056SGD. Then deducting bank wire fees: 2056SGD – (20AUD + 20SGD) = 2016SGD (Final amount)
PayPal would be 1,500USD * 1.342 = 2013 SGD
Therefore, both are about the same
However, PayPal is still useful. There are two hacks I want to talk about
One: Withdrawing via PayPal is still cheaper if you send them local currency. Because PayPal doesn’t charge any fees on local currency withdrawals above $200 (below $200 they charge $1). I just need to get IC Markets to convert USD to SGD for me (Rate is 1.361, better than PayPal), then withdraw the converted funds to PayPal.
Example: I have IC Markets convert 1,500USD to 2041.5 SGD. I then withdraw 2041.5 SGD to PayPal. I withdraw the final sum of SGD 2041.5 from PayPal to my local bank account incurring no extra charges
Hack 2: Withdrawal is completely free if you have local currency (SGD) in IC Markets and withdraw it to PayPal
Example 2: Let’s say I have 1,500SGD in IC Markets and I withdraw it to PayPal. The withdrawal is free. I then withdraw the 1,500 SGD from PayPal to my bank account, incurring no charges because withdrawals from PayPal is free above $200.
Compare this with an international bank wire of $20 (sender’s bank) + $20 (receiving bank) fees
So to sum up: the cheapest way to withdraw from IC Markets are the following 2 methods
- Convert your USD to local currency within IC Markets (especially if you have a large sum), you get better rates, then withdraw via PayPal
- If you already have local currency in IC Markets, withdraw via PayPal
So what did I do with the USD 1,500 stuck in my PayPal and I am forced to convert it to SGD at a poor exchange rate given by PayPal?
I deposited the money back to IC Markets, (no fees) then I got IC Markets to convert the USD to SGD at a rate better than PayPal and similar to my local bank by doing an internal funds transfer between two live accounts (one in USD and one in SGD), then withdrew the sum to PayPal in local currency (SGD), incurring no charges.
There you go! Hope you learnt the cheapest way to withdraw via IC Markets!
If you are trading Forex and you want a commission discount on every trade whether you win or lose, sign up for our IC Markets commission discount here. There is a $1.50 per round turn lot direct commission discount (8% discount for cTrader accounts) on every of your trade.
If you like to have the same for other brokers, we have over 30 brokers rebate deals on our homepage, sign up for them!