Author Topic: Best way to transfer money internationally?  (Read 7969 times)

Kwill

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Best way to transfer money internationally?
« on: July 29, 2017, 01:56:04 AM »
What is the most cost-efficient way to transfer money overseas? I have savings in the US that I would like to use for a deposit on a flat in the UK sometime in the next few months or up to a year from now. I've been using Transferwise when necessary. It's considerably better than what my bank charged me when I was first transferring money to cover my move, but I wonder if the collective wisdom of the Mustachians has any suggestions before I start doing anything with larger amounts.

Is it worth worrying about which direction the pound will go? Do everything now even if the deposit sits in a UK bank at almost no interest for awhile, or leave it in the States until I work out all the details?

aspiringnomad

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Re: Best way to transfer money internationally?
« Reply #1 on: July 29, 2017, 09:02:42 AM »
I have no practical experience with this yet, but have you looked into OFX? Mark-ups are supposedly higher than TransferWise but there's no fee. Might be worth costing the two out.

I would not worry about which direction the pound will go anymore than I'd worry about which direction the dollar would go. IOW, move the money as soon as you're sure you want it moved.

SnackDog

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Re: Best way to transfer money internationally?
« Reply #2 on: July 29, 2017, 09:13:30 AM »
I think HSBC offer free transfers if you open an account with a large balance.   Just be sure to get the account set up well in advance and maybe do a test transfer to understand how long it takes.

SquirrelStache

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Re: Best way to transfer money internationally?
« Reply #3 on: July 29, 2017, 09:18:36 AM »
I use Transferwise to move money from the US to UK and it's about a quarter of the cost of what my bank was charging me (and a bunch less paperwork).

Kwill

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Re: Best way to transfer money internationally?
« Reply #4 on: July 29, 2017, 01:26:38 PM »
I have no practical experience with this yet, but have you looked into OFX? Mark-ups are supposedly higher than TransferWise but there's no fee. Might be worth costing the two out.

I would not worry about which direction the pound will go anymore than I'd worry about which direction the dollar would go. IOW, move the money as soon as you're sure you want it moved.

I looked at OFX for the first time since you mentioned it. Thank you for the tip.

It turns out that the OFX exchange rate is slightly less advantageous than the Transferwise one. I checked out the two rates for $4000. It looks like I would have received 2,984.00 with OFX (fees built into exchange rate) vs 3,019.54 with Transferwise (upfront fee of $33.71 based on a percentage).

I was looking at this page for OFX: https://apps.ozforex.com.au/customer-rates

Referral link for TransferWise: https://transferwise.com/u/kristinw1

Kwill

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Re: Best way to transfer money internationally?
« Reply #5 on: July 29, 2017, 01:29:44 PM »
I think HSBC offer free transfers if you open an account with a large balance.   Just be sure to get the account set up well in advance and maybe do a test transfer to understand how long it takes.

Thank you. This is good to know. I think in my case it would be tricky for me to open a new bank account for this purpose because the money is in the US and I am in the UK. I'd have to check into the exchange rates since sometimes the fees are hidden that way.

aspiringnomad

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Re: Best way to transfer money internationally?
« Reply #6 on: July 29, 2017, 02:18:18 PM »
I think HSBC offer free transfers if you open an account with a large balance.   Just be sure to get the account set up well in advance and maybe do a test transfer to understand how long it takes.

Thank you. This is good to know. I think in my case it would be tricky for me to open a new bank account for this purpose because the money is in the US and I am in the UK. I'd have to check into the exchange rates since sometimes the fees are hidden that way.

Yeah, I think most banks make money on "free" transfers through unfavorable exchange rates that end up costing you more. Transferwise offers you the most favorable exchange rate and then transparently charges the 1% fee. But I also costed out an exchange from USD to NZD at OFX and it came in a little cheaper there than at Transferwise even with a slightly less favorable exchange rate because it wasn't enough of a difference to make up for the fee. YMMV.

mandy_2002

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Re: Best way to transfer money internationally?
« Reply #7 on: July 29, 2017, 02:55:56 PM »
I have a Charles Schwab debit account which has no foreign transaction fees and refunds any fees charged by ATMs to withdraw money.  Since your time horizon is pretty broad, and in my case, the best thing to do would be to take out several hundred pounds each day or couple of days, then deposit it in the bank I'm using.  (I called them once about the limit because I needed something like 500 Euros, and they said that it wouldn't be a problem, so I'm not sure what the daily limit would be for me; this is something I'd find out if I were in your situation). 

I'm not sure what your ATM fee situation looks like, but this option would work really well for me.

Kwill

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Re: Best way to transfer money internationally?
« Reply #8 on: July 29, 2017, 03:12:28 PM »
I have a Charles Schwab debit account which has no foreign transaction fees and refunds any fees charged by ATMs to withdraw money.  Since your time horizon is pretty broad, and in my case, the best thing to do would be to take out several hundred pounds each day or couple of days, then deposit it in the bank I'm using.  (I called them once about the limit because I needed something like 500 Euros, and they said that it wouldn't be a problem, so I'm not sure what the daily limit would be for me; this is something I'd find out if I were in your situation). 

I'm not sure what your ATM fee situation looks like, but this option would work really well for me.

This is an interesting idea. It never occurred to me to take the money out as cash. My main credit union in the States charges ATM fees but doesn't charge a fee on international credit card use. I guess one small-scale thing I could do would be to put more of my daily purchases (groceries, etc) on the US credit card with the 1.5% cash back and then put more of my UK income straight into savings. I'd be somewhat concerned about the exchange rate, but getting the cash back points might balance that out.

I'd be worried about using an ATM to withdraw a lot of cash over an extended period because it would look fishy, like I was trying to avoid legitimate oversight or taxes. I'll want to withdraw $10,000 from my IRA with the first-time homebuyer deal, and for something like that, I want an appropriate paper trail.

kaetana

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Re: Best way to transfer money internationally?
« Reply #9 on: August 05, 2017, 12:02:03 AM »
Have you considered Bitcoin? There are debates about its value as an investment asset, but its usefulness in transferring money is generally indisputable. I'm not familiar with companies specific to the US and UK, but I've used it to transfer money between Australia, the Philippines and Europe. Basically I transfer money in currency A to a bitcoin exchange in country A and buy bitcoins. Then I send the bitcoins to another bitcoin exchange in country B and withdraw it in currency B into a bank account. The fees are tiny and the Bitcoin part of the process takes an hour. It's the traditional banking parts on either side that will determine how long it takes. You'd have to find bitcoin exchanges in both countries and investigate their fees to see if it's worthwhile, but in my case it's the cheapest solution I've found. Some people aren't comfortable dealing in bitcoin at all, which is totally fine, but I thought I'd toss it up there as a suggestion.

Kwill

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Re: Best way to transfer money internationally?
« Reply #10 on: August 05, 2017, 03:54:09 PM »
Have you considered Bitcoin? There are debates about its value as an investment asset, but its usefulness in transferring money is generally indisputable. I'm not familiar with companies specific to the US and UK, but I've used it to transfer money between Australia, the Philippines and Europe. Basically I transfer money in currency A to a bitcoin exchange in country A and buy bitcoins. Then I send the bitcoins to another bitcoin exchange in country B and withdraw it in currency B into a bank account. The fees are tiny and the Bitcoin part of the process takes an hour. It's the traditional banking parts on either side that will determine how long it takes. You'd have to find bitcoin exchanges in both countries and investigate their fees to see if it's worthwhile, but in my case it's the cheapest solution I've found. Some people aren't comfortable dealing in bitcoin at all, which is totally fine, but I thought I'd toss it up there as a suggestion.

Definitely uncomfortable with this idea, but maybe it's just a kneejerk reaction to something unfamiliar? This is the sort of thing that might be interesting to try with a small amount.

I finally registered for OFX and got a proper quote for the amount I wanted to transfer. Transferwise was still slightly better, but they were quite close. When I tried to do a large transfer, though, Transferwise wanted more documentation on my identity. So now I'm waiting. It's good they're being careful, I guess.

meghan88

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Re: Best way to transfer money internationally?
« Reply #11 on: August 06, 2017, 03:49:59 PM »
I use www.xe.com.

The spread to buy or to sell is slightly more than one cent over mid-market rates.  YMMV because I think my rate has been grandfathered.  I can send cash from my domestic account to any foreign account without any more fees than the one-cent spread.

aalferez

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Re: Best way to transfer money internationally?
« Reply #12 on: August 06, 2017, 04:07:19 PM »
I use XE too. You can set a transfer on a money value. Like, if Euro to Dollar is 1,5 -> 1. So you get a good change.
And then you have 7 days to do a transfer.
It is very quick

Goldielocks

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Re: Best way to transfer money internationally?
« Reply #13 on: August 07, 2017, 07:40:07 AM »
We used customs house (now part of western union), a FX company.  Takes a bit to set up, but is ideal for large amounts, because the spread (the difference between buy / sell dollar of the currency)  was the lowest, by about 1.5%.   Those banks with "no fees" make their money on the currency spread, you know, often 3.5%.

Other Fx houses should be similar.

The other way I have exchanged is with my on-line investments.  When I transfer a stock in CDN "in kind" to a US account, I am getting pretty much the exact exchange rate.   It can take a few days to settle, and you need a way to withdraw the money after you transfer, then sell.  This should work if you can find an investment brokerage that allows you to set up accounts in your chosen currencies.

Both of these are best if you are trying to transfer more than $25,000...   And with that large a cash transaction, the small rate % savings can be worth the time and hassle (up to two weeks) to set it all up.

The CDN to US exchange -- there is a snowbirds buying club that people use to make large, low percentage cost purchases, and hand the savings back to members.



JetBlast

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Re: Best way to transfer money internationally?
« Reply #14 on: August 07, 2017, 09:21:27 AM »
Have you considered Bitcoin? There are debates about its value as an investment asset, but its usefulness in transferring money is generally indisputable. I'm not familiar with companies specific to the US and UK, but I've used it to transfer money between Australia, the Philippines and Europe. Basically I transfer money in currency A to a bitcoin exchange in country A and buy bitcoins. Then I send the bitcoins to another bitcoin exchange in country B and withdraw it in currency B into a bank account. The fees are tiny and the Bitcoin part of the process takes an hour. It's the traditional banking parts on either side that will determine how long it takes. You'd have to find bitcoin exchanges in both countries and investigate their fees to see if it's worthwhile, but in my case it's the cheapest solution I've found. Some people aren't comfortable dealing in bitcoin at all, which is totally fine, but I thought I'd toss it up there as a suggestion.

Bitcoin is far more volatile than traditional currencies. Have you had any issues with the value of bitcoin moving sharply in the short time between transactions?

Christof

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Re: Best way to transfer money internationally?
« Reply #15 on: August 07, 2017, 02:59:12 PM »
I recently switched from Transferwise to Revolut. They are exchanging at the spot rate for no fee...