Paying via Transfer to Foreign Bank Account

[audreyh1]

I have a tour that requires payment by bank transfer (they say wire) and will send me the instructions for transferring funds to their company bank. Payment will be initially 30%, the remainder a couple of months later. The total is ~ €6500.

I'm sure Fidelity handles foreign bank transfers. But I don't know the fees involved or yet how to set such a thing up.

Is this something that I should try to do via TransferWise? And do I set up an account with them?

It's all very mysterious to me.

Thanks for any help.

Audrey

 

[bingybear]

When I had a son going over to Japan to study I helped him get a bank account thru a US bank that had a presence in Japan. I then purchased yen (forex) and Fidelity wired the money to his account. Not really a big deal.

Somewhere you will have to deal with currency exchange unless the recipient will accept USD.

I have not used the service you are talking about. It may be fine. I have not tried them.

When I did it wires were free for Private Client. I don't about now. Check with your broker, they may walk you thru the whole thing.

 

[Sunset]

Wire of money has a fee, probably varies by bank, I was quoted $30 to wire $1,000.

Why doesn't this tour just use credit card payment (and add on 2.5% extra for the cost) ?

Be careful of the scam where someone intercepts the email and sends you an email with different account numbers to get the wire. You could always phone to confirm the account #'s in letter are accurate.

 

[Alan]

I have used Transferwise lots, and when I first set up a new bank account I transfer a small amount first and check that the recipient gets it okay by calling or texting. The email intercept has become very popular as a means to steal money.

 

[audreyh1]

Why doesn't this tour just use credit card payment (and add on 2.5% extra for the cost) ?

Because they don't?

Bank wire transfers are not that unusual for paying for tours in Europe.

 

[audreyh1]

I have used Transferwise lots, and when I first set up a new bank account I transfer a small amount first and check that the recipient gets it okay by calling or texting. The email intercept has become very popular as a means to steal money.

Well, this is concerning.

 

[audreyh1]

When I had a son going over to Japan to study I helped him get a bank account thru a US bank that had a presence in Japan. I then purchased yen (forex) and Fidelity wired the money to his account. Not really a big deal.

Somewhere you will have to deal with currency exchange unless the recipient will accept USD.

I have not used the service you are talking about. It may be fine. I have not tried them.

When I did it wires were free for Private Client. I don't about now. Check with your broker, they may walk you thru the whole thing.

I understand that currency exchange is involved. But some institutions charge a low mark-up on currency exchange while others pad it quite a bit.

So I'm curious as to Fidelity's fees and mark-up.

Sounds like you purchased the foreign currency at Fidelity, then had it wired. Well that would tell me the conversion rate Fidelity is offering.

 

[audreyh1]

I have used Transferwise lots, and when I first set up a new bank account I transfer a small amount first and check that the recipient gets it okay by calling or texting. The email intercept has become very popular as a means to steal money.

What do you mean when you first set up a new bank account?

I will be wiring to a third (or is it second?) party.

 

[Alan]

Well, this is concerning.

The last time I paid a large sum to a new payee here in England was to a contractor doing work on our house. When I paid his bill HSBC called me to ask how I had received his bank details. Once I told her that it was via a PDF file emailed to me but that I had already sent him £1 and phoned to check then she said she would release the payment.

When I had talked to him to let him know what I was doing he fully understood and told me about someone he knew who had been scammed like this. There had been an article on BBC Moneywatch some months back that detailed the scam saying that thieves could hack a person’s email account and modify a PDF file to make it look genuine.

What you might do is call is the person and read out the bank details to them to confirm the numbers. That would save 2 transfers.

 

[Alan]

What do you mean when you first set up a new bank account?

I will be wiring to a third (or is it second?) party.

If you have never sent money to a person before, then setting them up the first time is a “new” payee. Once you have done it successfully then further payments are not to a new payee as Transferwise will have it and give you the option to select it without typing in all the details again.

 

[audreyh1]

The last time I paid a large sum to a new payee here in England was to a contractor doing work on our house. When I paid his bill HSBC called me to ask how I had received his bank details. Once I told her that it was via a PDF file emailed to me but that I had already sent him £1 and phoned to check then she said she would release the payment.

When I had talked to him to let him know what I was doing he fully understood and told me about someone he knew who had been scammed like this. There had been an article on BBC Moneywatch some months back that detailed the scam saying that thieves could hack a person’s email account and modify a PDF file to make it look genuine.

What you might do is call is the person and read out the bank details to them to confirm the numbers. That would save 2 transfers.

Good advice. I'll figure it out one way or another.

 

[audreyh1]

How do you transfer from your bank to TransferWise?

Do you set up like an account at TransferWise and then set up a link to your bank?

This is the part that is very mysterious to me.

 

[Alan]

How do you transfer from your bank to TransferWise?

Do you set up like an account at TransferWise and then set up a link to your bank?

This is the part that is very mysterious to me.

You can either set up your bank account with TW and when you transfer money abroad it will pull the $s using ACH once you hit submit. Alternatively you can not set up your bank and after you hit submit TW will ask you to wire the $ funds to their account. Wire will cost a little extra but if you don’t plan on routinely sending money and don’t want TW to have your bank details then this is the way to go.

TW will show you exactly what you will be paying and it will be much cheaper to wire funds to TW in $s than directly to a foreign bank.

 

[audreyh1]

You can either set up your bank account with TW and when you transfer money abroad it will pull the $s using ACH once you hit submit. Alternatively you can not set up your bank and after you hit submit TW will ask you to wire the $ funds to their account. Wire will cost a little extra but if you don’t plan on routinely sending money and don’t want TW to have your bank details then this is the way to go.

TW will show you exactly what you will be paying and it will be much cheaper to wire funds to TW in $s than directly to a foreign bank.

OK - thanks. That clears up some definite mysteries.

Another confusion, is that I need to pay for the tour in Euros. Can you specify with TransferWise the amount in Euros, and then they pull whatever in $ covers that amount at the moment?

 

[BigNick]

Another confusion, is that I need to pay for the tour in Euros. Can you specify with TransferWise the amount in Euros, and then they pull whatever in $ covers that amount at the moment?

Yes. You can either "Send $1000" or "Ensure the other party gets €1000". If you choose the latter, it will say "You need to send us $1145.67" or whatever. The rate is fixed for about 24 hours.

Another TransferWise product is their "borderless bank account". This is kind of like a 2-stage transfer. First you send money (say, in USD) to your borderless account. Then, at any later point, you can send € from that account to a € payee, or £ to someone in the UK, because your borderless account also has Euro (SEPA) and Sterling (BACS) account numbers, as well as ABA and ACH routing numbers. Conversions are done at the mid-rate and their commission is usually a fraction of a percent.

Even better, but not yet available to US customers, is that you can get a debit card for the borderless account. With this, you have a card that works in Switzerland like a CHF card, in Germany like a EUR card, and in Denmark like a DKK card. You can put a balance in each of those currencies on it and convert between them at any time. Every payment is done in the local currency. If you try to pay 100DKK and your DKK balance is only 80, it will convert a few EUR or USD to DKK and charge you a couple of cents. On a trip round Europe this can save a lot of money in card usage fees.

I very rarely get enthusiastic about any consumer item, but I unhesitatingly recommend TransferWise. (They have a referral program. DM me if you want to be my first official referral - there is a bonus for both of us!)

 

[bingybear]

I understand that currency exchange is involved. But some institutions charge a low mark-up on currency exchange while others pad it quite a bit.

So I'm curious as to Fidelity's fees and mark-up.

Sounds like you purchased the foreign currency at Fidelity, then had it wired. Well that would tell me the conversion rate Fidelity is offering.

When I did this it was not Fido's make up. I did a Forex trade. Instead of buying and ETF, I bought an amount of Japanese Yen. IIRC there was a small trading fee. My private client reps helped me with all the details. The mark up was based on the price I got on the trade. I would expect the Euro will not have much of a bid/ask spread.

The way I did it did not involve a preset spread of the money changers, but of the market.

Give Fidelity a call assuming you have accounts.

I would be cautious moving $ overseas. Keeping in the normal banking/financial systems can help document what is going on. You never want anything that could be seen as money laundering by mistake.

 

[audreyh1]

When I did this it was not Fido's make up. I did a Forex trade. Instead of buying and ETF, I bought an amount of Japanese Yen. IIRC there was a small trading fee. My private client reps helped me with all the details. The mark up was based on the price I got on the trade. I would expect the Euro will not have much of a bid/ask spread.

The way I did it did not involve a preset spread of the money changers, but of the market.

Give Fidelity a call assuming you have accounts.

I would be cautious moving $ overseas. Keeping in the normal banking/financial systems can help document what is going on. You never want anything that could be seen as money laundering by mistake.

Yeah - OK. Thanks.

I have a message into Fidelity Private Client Group, and I'll call them if they don't answer my questions sufficiently.

I didn't find anything on the Fidelity site about buying foreign currency.

 

[Alan]

Yes. You can either "Send $1000" or "Ensure the other party gets €1000". If you choose the latter, it will say "You need to send us $1145.67" or whatever. The rate is fixed for about 24 hours.

Another TransferWise product is their "borderless bank account". This is kind of like a 2-stage transfer. First you send money (say, in USD) to your borderless account. Then, at any later point, you can send € from that account to a € payee, or £ to someone in the UK, because your borderless account also has Euro (SEPA) and Sterling (BACS) account numbers, as well as ABA and ACH routing numbers. Conversions are done at the mid-rate and their commission is usually a fraction of a percent.

Even better, but not yet available to US customers, is that you can get a debit card for the borderless account. With this, you have a card that works in Switzerland like a CHF card, in Germany like a EUR card, and in Denmark like a DKK card. You can put a balance in each of those currencies on it and convert between them at any time. Every payment is done in the local currency. If you try to pay 100DKK and your DKK balance is only 80, it will convert a few EUR or USD to DKK and charge you a couple of cents. On a trip round Europe this can save a lot of money in card usage fees.

I very rarely get enthusiastic about any consumer item, but I unhesitatingly recommend TransferWise. (They have a referral program. DM me if you want to be my first official referral - there is a bonus for both of us!)

One caution for a US person living in the USA with the TW borderless account is that if it exceeds $10k at any time during the year then it should probably be reported on an FBAR filing to the Treasury. A lot of discussion on Expat websites about the TW borderless account and on a webinar with Greenback Taxes yesterday someone asked that specific question and the answer was to be safe and report it. Not an issue for folks like myself who have to do FBAR anyway, just another account to add to the report list.

 

[audreyh1]

So, is any account with TW this "borderless account"?

 

[Alan]

So, is any account with TW this "borderless account"?

No, the normal use of TW is like any other forex company. The borderless account is a bank account that handles multiple currencies. You have an account balance and an account number etc.

A lot of folks moving to the UK for example find it next to impossible to open a UK bank account ahead of the move because of all the strict money laundering rules. The same would be true if a non resident US person wanted to open a US bank account. The TW borderless account is a good solution.

 

[audreyh1]

OK - thanks.

 

[bingybear]

Yeah - OK. Thanks.

I have a message into Fidelity Private Client Group, and I'll call them if they don't answer my questions sufficiently.

I didn't find anything on the Fidelity site about buying foreign currency.

look at these links. fidelity uses one of their subsidiaries


capital markets


foreign currency wiring

I did my transfers over a decade ago.

 

[HarveyS]

I trade USD for Singapore $ on the Fidelity web site. Your rep can walk you thru this. The trade requires you go to the black trade tab, then at the bottom of the screen choose "expanded". Then you can find currency. They charge a 1% currency conversion fee.
Then I visit my local branch to fill out the paperwork for the wire transfer of SGD to a singapore account. This may be a problem if there is no local branch as I believe you have to visit in person for the paperwork. Check with your rep.
Since you will be making multiple transactions, request to be set up with a "Standing Instructions" form. Then you can just call in your request. For me, easy peasy.
I was just at Fido yesterday doing this, and learned of the standing instructions.

 

[audreyh1]

Thanks.

I don’t have a local branch, but I believe they will accept mailed instructions.

 

[deserat]

I've read this thread with interest as I may be moving back to Europe for a few years. I also have European clients and they pay me in Euros. I belong to a credit union that allows foreign bill pay, Service Credit Union, and they have an IBAN number associated with my account as well as a German address for one of their branches. I have my account with them for that reason: the IBAN number as it allows electronic transfer of funds throughout Europe.

If you are willing to have another account, then you might look into Service Credit Union. I've found I can live in Europe and not worry about FBAR or other issues due to the dual numbering system: ACH and IBAN.