Why do we convert your money to USD?

3. November

By Adam Hano, Birdwingo’s Co-founder ✨💰

You have probably noticed that we hold all your cash in USD. In this post, we will explore the reasons behind “why” and the benefits it brings. Let’s dive in!

📈 Access to Markets

At the moment the US treasury bills yield higher returns than the Euro ones. Therefore, we are able to give higher yields on any uninvested cash in your account.

When your money is held in USD, you have direct access to the US markets. US markets have significantly lower costs than European markets. For example, the S&P 500 ETFs have a 0.01% fee on the US markets but a 0.1-0.2% fee on the European markets.

Furthermore, the costs associated with accessing European Stock exchanges are higher than with the US ones. Therefore, for each trade, we are able to charge you a significantly lower price than the competition, without any spreads or other hidden fees.

📊 Inflation Considerations

We believe that holding some (or all) of your cash in USD is one of the safest options these days. Currently, the inflation rate in the United States is significantly lower than that of the Czech Republic, for instance. Therefore, if you convert your Czech Crowns to USDs, you are shielding yourself at least a bit against the inflation in Czechia. This tactic combined with the ability to receive a high yield on your uninvested cash is a great strategy to combat inflations in countries without a stable currency such as the USD or EUR.

🛡️ Assurance of Safety

Birdwingo offers an unparalleled level of protection at $500,000 USD, which is the highest in Europe and far exceeds the standard European protection of €20,000. One of the reasons that we are able to offer such a large protection on your investments and cash is due to our utilization of the US financial infrastructure.

If you’re playing the long game, you’ll definitely want to pay attention to how much protection your broker is bringing to the table.

🎯 Measuring Performance

The majority of the world’s most popular (and largest) companies are being traded on the US stock markets. Their stock performance is tracked by the ups and downs in their USD prices.

With everything priced in USD, and your positions in the same currency, you can see your investment’s profit or loss straight up — like how much cash you’ve pocketed.

❔Does it matter which currency I hold my money in?

For the long haul, the currency you hold doesn’t really make a difference. Actually, with the costs we talked about, you’re better off sticking with USD.

Over the years, the back-and-forth fluctuations between solid currencies like the EUR and USD tend to even out. (Let’s be real, predicting how strong will the Euro be compared to the Dollar in 20 or 30 years is pretty much a guessing game.)

🏪 Conversion Costs - A Non-issue

Let’s not forget about the big deal – currency conversion. At Birdwingo, we convert your cash using the Interbank Exchange Rate. Yep, that’s the best rate you can get, the same one that banks use to exchange money with each other, and almost the same rate as Google flashes on your screen. (Why “almost”? Because the rate changes every second, which can lead to tiny lags.) How do we pull that off?

We have partnered with top-tier payment providers that charge us a fixed fee for their services. We offset that expense with the commissions per trade we receive from our users, ensuring we don’t have to impose any additional charges on you.

Investing and trading in assets tend to follow certain patterns, with universal principles that help in risk diversification — like spreading your investments across various asset classes, leaning on large ETFs such as VOO or VTI, and incorporating bonds into your portfolio. However, currency trading seems to be a harder thing to grasp for an ordinary investor.

📲 What is Birdwingo?

Birdwingo is a go-to investing app with more than 20k users where you can invest in stocks & ETFs like Apple, Tesla, S&P 500 ETF & more.

What do we offer?

11,000+ most popular stocks & ETFs
lowest fees on the market
personalised portfolios
robo-advisory
auto-invest