How do YOU transfer money overseas?
We used to do it with a traditional wire transfer from our Canadian bank until we heard about Wise (formerly “Transferwise”).
Now we save about 3% per transfer and we get the money in our overseas account within seconds.
Our major issue before deciding to use Wise was trust. Who are these people? Are they going to steal my money?
Wise is listed on the London Stock Exchange and valued at 11 Billion US. It was started up by the same people who started up Skype and has investors such as Richard Branson and Fidelity Investments (I know Fidelity because I’ve had mutual funds with them for over 10 years through my bank). They have over 13 million customers around the world.
Once I knew all the above I decided to try a test using Wise.
Look at the difference (this test was done in September 2021 so don’t get shocked by the exchange rate. Look instead at the exchange rate difference and the difference in the money you receive)
A. A traditional bank transfer with my bank
Amount to transfer $2500 CAD
Exchange rate: .6487
Gross amount 1,621.75 Euros
Less transfer fee
(6 CAD *.6487) – 3.89 Euros
Net Euros received 1,617.86
Our Canadian bank has a daily transfer limit of $2500 and a transfer fee of $6 CAD per transaction. The money takes 2 days to reach our Spanish bank.
Biggest disadvantage – the padded exchange rate.
B. A transfer using Wise
Amount to transfer $2500 CAD
Fees: -13.70 CAD
Net 2,486.30 CAD
Exchange rate: .67064
Net Euros received 1,667.41
Above were the results of our 1st transfer with Wise. The fees with Wise are actually higher than fees on a bank transfer but the big difference is the exchange rate. The reason is that Wise uses mid-market rates (ie. real rates) set by the market, not padded rates like the banks. So they don’t make their money on the exchange rate, they make money on the commission.
Analysis – Transferring using Wise (vs the bank) we saved 49.55 Euros, the equivalent of $74 CAD on a $2500 CAD transfer. $74/2500 = 2.96% saving.
Not only do I save money, transfers are done almost instantaneously. After my 1st transfer above, I set up my Wise account so that all I have to do is click a few buttons. The average time it takes me to exchange/transfer my Canadian dollars – from my Canadian bank to my Spanish bank – is under 10 seconds. The first time Wise was telling me that the transfer was done in 7 seconds. I couldn’t believe it. I went to my Spanish account and the money was sitting there. 7 seconds!! That’s unbelievable.
3% might not seem like a huge saving. I transfer about $2500 Canadian from my Canadian bank about once a month so I save $75. It won’t change my life but it’s enough to cover my monthly electricity and internet bills.
But imagine if you need to transfer more money than that on a monthly basis. That 3% will result in big savings. That’s why you should chose Wise.
Want to use Wise? Register here. It’s easy
Related: How to Get a Spanish Non-Lucrative Residence Visa
Related: What Travellers and Expats should know about Managing their Finances
Hi Frank….. interesting bit of financial analysis work you’ve done here. I remember looking at Transferwise a couple years ago. But i can do transfers fairly cheaply with a similar TD service. Of course it varies by bank and country. TD doesn’t charge me any ATM fees and there is no ATM withdrawal fee in France like in Spain. In otherwords i can withdraw C$2500 (over 5 days!) without incurring any fees at either end.
But i am planning to buy property here (j’ai mon visa long séjour maintenant!) and Wise may be the better option to go with higher amounts.
Saludos hombre!
Hi Don,
Congratulations!! Bravo! Where in France do you figure you’ll live?
In the end, the biggest determining factor on a money transfer is the exchange rate. RBC (my bank) can have a $6 transfer fee but that doesn’t mean much when their exchange rate isn’t competitive. I wrote my manager, asking him if they offer a service that’s more competitive and he basically told me that money transfer companies like Wise are the way to go. I guess Banks are diversified enough that they don’t have to be more competitive in that field.
Happy for you. So are you still in Canada or in France now?
Thanks Frank….. I’m back in france now. Yes it’s definitely a good idea to compare exchange rates. I’ll be living in a small town called Sommieres (pop 5000) between Nîmes and Montpellier. I’ve already spent considerable time there since 2019 as my partner has been restoring an old stone house there. I really like the town – it’s pretty, lots of sunshine, good food, fantastic marché and decent expat population.
Overall the long séjour visa seemed fairly straight forward. It involved an application, 90 min interview, 1yrs health insurance, secured accommodation for min of 3 months, proof of sufficient funds, a notarized letter stating that i wouldn’t be professionally employed and about C$250 in fees. NO lawyers required! It took 5 weeks to receive it after the interview. I now have to register with department officials. What’s also nice is the visa is multiple entry!
Saludos!
interesting comparison. ive always travelled using credit card, cash and debit card for ATM uses and been reasonably happy with how that’s panned out. but it’s actually been getting harder. The Cirrus Maestro system would charge 5 bucks on Cirrus and 2 on Maestro and i always looked for Maestro. But they are the same now. It can make a fair difference though!
I withdrew money from my American back at an ATM here in Sweden and paid a 1% fee to my bank. I didn’t think it was all that bad.
One thing that can be tricky here in Sweden is exchanging cash. Sweden is on it’s way to becoming a cashless society. This is not something that the government has decided. The banks are doing it because of, among other things, the costs of handling cash. The government has, however, allowed stores to not accept cash.
Ok. No worries. However, try walking into a money changer with several hundred dollars and suddenly you will get the third degree.
I got a coronavirus stimulus check from the US government, which no Swedish bank would cash. I waited until I went back to the US and cashed it at Walmart. When I came back to Sweden, I was short of cash, so I took $600 to Forex and exchanged it without issue. The next week I got a huge bill for my moving expenses to another city. I decided to exchange $700 more. The teller suddenly started asking me where I had gotten the money from, noting that I had exchanged $600 the week before. That an American would have US dollars doesn’t seem odd to me. However, Forex (and probably other places) can refuse to exchange your foreign currency if you can’t prove where you got it. Money laundering laws.
While I can understand their side, I imagine very few transactions are money laundering. Most are probably normal people just trying to change money or pay a bill.
One of our biggest issues Edith is Lissette being American (on top of being Canadian). The US is very strict about Americans hiding cash overseas and just opening a bank account in another country requires a filing out documentation specific to Americans. We had this both in Croatia and now in Spain. Then of course you have to make sure to account for your foreign holdings to the IRS.
They keep Americans on a very short leash.
So I’m wondering if you somehow triggered something in the system with your various Forex transactions?
PS. The biggest factor Edith is the exchange rate and not the transfer fee. Some exchange companies advertise zero fees but get you big time on the exchange rate.
Next time you do a transfer, compare your bank rates to Wise using their pricing calculator. Then you’ll be able to see how competitive your Swedish bank’s rates really are.
Hi Edith,
I’m not sure what you’re referring to – do you mean my site? Comment boxes? Let me know what you mean, if there’s an issue I’ll forward them to my IT guy who takes care of the technical aspects of the blog.
Hope you’re well,
Frank
My husband and I traveled around the world for over three years. We set up accounts at Schwab. They do not charge atm fees and reimburse any fees the bank in that country charges. We set it up so only the chequing account was accessible by atm. We would transfer money from our savings acount electronically to our chequing account the day we needed to access it. That way, if our PIN number was stolen there was very little money they could access. This worked beautifully for us.
Thanks Sandy, that sounds good. We had a standard no-fee chequing account. Actually I don’t know if they have something equivalent in Canada to what you had, but if you’re someone who’s travelling the world and drawing maybe smaller amounts of money but with more frequency then it really is worth it.