Hello I have a question concerning base currency on IB. I've searched existing threads and not found quite what I'm looking for. I've just opened an account on IB and need to choose my base currency. I live in Switzerland, originally from the UK. The money I will invest is currently in three currencies: GBP (75%), CHF (20%) and USD (5%). I plan to invest mostly in US ETFs / stock (70%) with the rest in Swiss or UK ETFs. I'm not sure if I should a) choose USD as my base currency because that is where I will mostly invest, b) choose GBP because that is the currency where most of the money I will invest is in or c) choose CHF because I live in Switzerland and am a resident for tax purposes. An advice would be welcome! Thank you.
USD would be better because otherwise every time you should buy ETFs or any other product whose base currency is $, you will pay exchange fees (spread). In any case even if you have a base currency CHF and you hold UK and US ETFs the same as having direct exposure to £ and $.
Base currency choice is important for reporting. Which one would you like to see in your account statement? It does not have any material effect on you otherwise.
The choice of base currency is not a one-time-only choice. If you choose a currency and later decide that it is not convenient you will be able to change the base currency. As @ids already mentions, is it mostly related to reporting your account statement. It has no influence on your cash positions or the currencies of the instruments you trade.
To be clear - HobbyTrading is absolutely correct - base currency is for reporting but also if a cash account, the currency in which you will be charged if you do not meet monthly minimums. Otherwise, it makes no difference. You are free to convert or hold multiple currencies as you please.
The choice of the base currency is very much important. I think USD is much better as a base currency.