Transferring money to Europe

[thegrind]

I have citizenship in Europe as well as USA. I would like to retire to Europe. I'm not sure if I want to leave my money in the USA. I guess to do this I would have to setup a mail forwarding service?

Ultimately, I'd like to move my money to Europe without getting killed in conversion fees since I'm looking at 7 figures. Anyone have any suggestions on the best way to transfer the money? Banks I'd probably get clobbered so I'm looking at Transferwise/wise.

 

[The Cosmic Avenger]

I'm not sure why you would need to transfer anything, but then I've never lived outside the US. Do banks only have branches in one country? I thought I had seen foreign banks with branches in NYC.

 

[FIREd]

I transferred nearly my entire wealth (7 figures) from the US to Europe 3 years ago. At the time I used Transferwise for only a small portion of the transfers because I found that a more convenient way was to open a checking account at HSBC in the US and one at HSBC in my destination country (not a small feat in itself, when not yet a resident of that country). Then moving money between the two accounts was as simple as a moving money between 2 accounts within the same bank. It was a one step process and the money appeared in my account in Europe the next business day. No transfer fees, but around 1% currency exchange fees IIRC (yeah not cheap, but the price to pay for convenience). The HSBC route appeared gone now as HSBC is shuttering its US operations, but other international banks might be an option.

 

[The Cosmic Avenger]

That's kind of what I was thinking, FIREd, and I know Capital One had a credit card that doesn't charge an exchange fee, they just give you the bank rate if you charge abroad in a foreign currency, so I thought there might be a bank that did that with withdrawals/deposits.

 

[Alan]

I did something very similar to Fire’d with 2 HSBC accounts, used it to transfer a 6 figure sum to the UK to buy a house but mostly I use Wise (used to be called Transferwise) for most of our transfers.

Unlike Fire’d we are both US citizens so OP needs to be aware that USCs are considered resident in the USA for tax no matter where they live. Consequently any overseas ‘mutual’ funds are taxed punitively as PFICs. Vanguard.co.uk has mainly ETF funds similar to their funds in the USA but Vanguard UK won’t even allow a USC to become a customer because of FATCA regulations. (It is easier for foreign financial institutions to simply avoid reporting to the USA by having no USC customers)

Vanguard US allows overseas customers so I manage and maintain our IRA and brokerage accounts from England easily enough, selling, trading and moving money to England as needed. We also have private US pensions plus SS which means lots of financial ties and need to be able to move money regularly to England.

 

[Alan]

I have citizenship in Europe as well as USA. I would like to retire to Europe. I'm not sure if I want to leave my money in the USA. I guess to do this I would have to setup a mail forwarding service?

I forgot to mention that if you choose your US bank and brokerage carefully they will allow an overseas address. For us it is HSBC US and Vanguard, but other banks and brokerages also accept overseas customers. So no need for a forwarding address.

I did initially use our daughter’s address as our mailing address with Vanguard, and when our son moved over in 2017 he gave his sister’s address to the company he left so they would send his final W2 there, which they did and she sent him a picture of it. In both our cases the State of California came after us for taxes and we had to complete more tax forms plus proof that we were not resident and that the companies that had sent the W2 and 1099-R were not California companies.

 

[FIREd]

I did something very similar to Fire’d with 2 HSBC accounts, used it to transfer a 6 figure sum to the UK to buy a house but mostly I use Wise (used to be called Transferwise) for most of our transfers.

It seems like I was making large transfers and there was some kind of limit with Transferwise perhaps? I can't remember now but I have a lot of $15K transactions with Transferwise on my spreadsheet. On that spreadsheet, I also tracked the cost of moving money (including transfer fees and currency exchange fees). To give a rough idea, transfers with HSBC cost me around 1.1% and transfers with Transferwise around 0.65% (at the time).

 

[Alan]

It seems like I was making large transfers and there was some kind of limit with Transferwise perhaps? I can't remember now but I have a lot of $15K transactions with Transferwise on my spreadsheet. On that spreadsheet, I also tracked the cost of moving money (including transfer fees and currency exchange fees). To give a rough idea, transfers with HSBC cost me around 1.1% and transfers with Transferwise around 0.65% (at the time).

You were probably a newish customer like myself and had some limitations. I normally don’t transfer more than $15k at a time with Wise.

 

[thegrind]

Thanks for the info. I had an account at HSBC with this in mind but closed it when I heard they are pulling out of the US. I am a little leery about FACTA as I was calling around to some banks in Europe and they wanted no part of FACTA even though I am not doing this to avoid taxes but then again this was shortly after FACTA came out. Looks like Wise would be my best bet to dribble the money in.

 

[oiseux]

For my apartment, I used Schwab. Others I know are happy for small transactions with Wise. Some have used MoneyCorp or OFX.

I agree, if you already have target countries in mind and are not renouncing your US citizenship, I'd look at the tax treaties closely. In a number of cases, it is more advantageous to retain US-based investment accounts.

 

[Bryan Barnfellow]

I keep all invested assets in the US, which has the world's most transparent, efficient, and inexpensive markets. Investing as an American in European mutual funds, ETFs, etc. can be very tricky with respect to taxes (both US and the European country you live in). So, be very cautious about this.

I use Schwab as a brokerage and bank in the US but also have some Vanguard funds (TIRAs and Roths). I maintain a US address for this purpose. I transfer funds to my local bank in Switzerland from Schwab in the US using Wise (formerly called TransferWise). The rates are low and the transfers are very fast and have been getting faster over the years. Never any problems.

It works as follows: I transfer funds quarterly. As income accumulates in the Schwab account I initiate (online) a Wise transfer from their US domestic bank to my Swiss bank at a guaranteed mid-market actual FX rate plus a small fee. This results in overall costs that are significantly lower than bank-bank international wire transfers. Wise then waits for the exact amount I am transferring to show up in their US account (along with information identifying me as the transferee).

I then do a domestic transfer to that bank from my Schwab account. Schwab charges $15 dollars/transfer but the first three each quarter are free. Hence, I try to do only three per 90 days and cherry pick the best FX rate days. I find that the domestic wire transfer (Schwab to Wise bank) is measured in minutes, start to finish. Then Wise picks up the funds from its account and I receive my funds in my account within x hours (Wise estimates the time of receipt at my bank and is usually right).

The reason Wise is cheaper is because it doesn't actually transfer your funds, but instead pays them out to you in your own country and in its currency from a bank account it maintains in your country. So, for them always a domestic transfer. Wise keeps me updated via email of their steps in the transfer process. Note: I employ email/text alerts from FX sources so that I can be assured of a good rate that might pop up on any given day. It makes a difference.

FATCA is indeed a huge problem for Americans in Europe and around the rest of the world. Most banks just won't allow American accounts. I was asked to cancel my account within 24 hours of notice more than a decade ago. In Switzerland the bank of the Postal Service must, by charter, allow any customer to have an account, so they are the default. But UBS has a set up for Americans--they wall off this group in a way that avoids much of the FATCA reporting from the rest of the bank.

As US citizens my wife and I have to fill in a joint report (online) once/year detailing all of our non-US accounts, via the FBAR report. We are below the thresholds for detailed FATCA reporting.

-BB

 

[matjung]

You should research in advanced what the European Tax Man thinks about your US Pension.
If you open a stock account in the wrong European country you quickly loose 25% of dividends, trading profits and distributions from investment funds.
The European Tax Man is interested in taxing your World Income. Weather the savings are in the US or not. May not be relevant. It will also depend on tax agreements between the US and the country of your choice.
Which European country is crossing your mind?
At a lot of European banks you can open USD accounts.
Then the conversion into EUR, GBP, etc. takes place at a later point in time.
Each US commercial bank should be able to transfer your money to your European Bank account. The European Bank would usually not charge a fee for receiving money.
You could ask Citibank or any other major US bank. They have offices in both continents.
For small money Wise may have better fees then a US Bank.
For big money, a US bank may have a better offer for you.

 

[DjBrown]

SWIFT
Cheapest and safest way to transfer money from bank A to bank B anywhere on this planet.

 

[sverbroekken]

As a few other posters have already mentioned, I use "wise" (formerly transferwise). After living in the USA for 8 years (and 15 out of the last 19), we moved from the USA back to Europe (Netherlands) in fall 2019 (due to both COVID and visa challenges).

Of course, 95% of our money was in dollars in US banks, and very little in Europe in our NL bank. I guess the good thing is we did have a Dutch bank that we had been using off-and-on, primarily during family trips back to NL. I needed to transfer a substantial sum to ensure we had enough in NL to live on initially, for a furnished rental home for up to 6 months (ended up being only 4) and for a down payment for a house.

So I used wise and transferred money in increments under $10K (not to evade scrutiny, but simply I didn't want to risk too many $$ in any one transaction). Always went smooth, and they are very clear about what the exchange rate is you pay and also the fees. Even now I continue to use it, and frankly I hope this company is still in business when I retire because with a US pension and 401K, I will need it in the not too distant future to transfer that from the US to Europe - on a monthly basis - as well.

PS - my #1 concern for retirement is the exchange rate risk though. It may - for me - be the reason to eventually try to move back to the USA for retirement vs. staying here in NL. We like both regions/countries!

Good luck.

 

[Alan]

SWIFT
Cheapest and safest way to transfer money from bank A to bank B anywhere on this planet.

In my understanding SWIFT is a type of international money transfer system used by many forex companies including Wise.

https://wise.com/help/articles/2553074/paying-by-swift

SWIFT payments, also called international wires, are a type of international transfer sent via the SWIFT international payment network. The SWIFT international payment network is one of the largest financial messaging systems in the world. Wise can send or receive certain currencies via SWIFT payment.

The thing I like about Wise is that it is cheap AND fast because it maintains its own bank accounts in many countries so that no money is actually transferred internationally (SWIFT system not needed). When I do a Wise transfer I send a wire from my US bank to their US bank (Wells Fargo) and the money appears in my UK bank the same business day. For me US bank to bank wires are free. If I choose to use ACH and let Wise pull the money from my US bank then that is also free but takes a day or 2 due to the delays in the ACH system.

Our smart technology links local bank accounts in countries all over the world. So often we’re able to use money from a TransferWise user sending money the other way around. Once we get that sorted, we'll give you an estimate of when your money will arrive – usually it’s much faster than a bank transfer.

If you provide your recipient’s email address, we'll also give your recipient a heads up to let them know your money is on the way. It will go right into their bank account.

 

[DjBrown]

In my understanding SWIFT is a type of international money transfer system used by many forex companies including Wise.

SWIFT is used by all banks. For example brokerage account with Schwab gives you access to SWIFT transfers. You know exact exchange rate and that rate with Schwab is as good as it gets. You pay 0 fees if you have reasonably large account.

Cheapest and safest way to transfer money. This is how companies make international payments.

I do agree with posters that it is better to keep money in US. When in EU if I need few thousand bucks Schwab Debit card gives me best exchange rates, if I need 10k+ Schwab SWIFT takes care of it.

 

[MichaelB]

SWIFT is not a financial business and doesn’t make transfers. It’s a platform for financial institutions and business users to communicate and uses protocols and standards to ensure security and confidentiality. To transfer funds internationally, banks use SWIFT and consumers use banks. The transfers have high fees and are slow.

Wise is an alternative to banks. I’m not sure about the fees but it certainly is much faster. Based on the experience of international members here, like Alan, I’ve used it and really don’t see myself going back to using banks unless something changes.

 

[Closet_Gamer]

I've done international wires through my brokerage and the costs have been minimal. $25 or so if I recall correctly. Took maybe a few hours to process.

Just ensure you know who is doing the currency conversion and how its calculated.

 

[braumeister]

I've been using Wise (formerly Transferwise) for years. Fast, relatively cheap, and reliable. Highly recommended.

 

[DjBrown]

https://wise.com/help/articles/2932389/how-much-does-it-cost-to-convert-between-currencies

You pay 0.43% markup for currency exchange. Maybe that is fantastic rate.

However if you withdraw from ATM using Charles Schwab VISA debit card linked to your brokerage account you pay VISA exchange rate markup which is 0.11 to 0.218%. So I claim that even ATM withdrawal when using Schwab Visa card gets you better rate than Wise and it is "pretty fast".

https://moneymattersforglobetrotters.com/no-foreign-transaction-fee-or-exchange-rate-markup-account/

 

[braumeister]

So I claim that even ATM withdrawal when using Schwab Visa card gets you better rate than Wise and it is "pretty fast".

Of course. But you're mixing apples and oranges.

Taking foreign currency from an ATM while overseas is completely different from sending money overseas.

 

[DjBrown]

Of course. But you're mixing apples and oranges.

Taking foreign currency from an ATM while overseas is completely different from sending money overseas.

I agree. What I am trying to say Schwab provides this as a service to customers so that customers keep their brokerage accounts with Schwab.

I am not sure about markup on Schwab SWIFT transfers. It is not 0.43% or higher from my experience and 100% I payed no fees.

 

[Alan]

I agree. What I am trying to say Schwab provides this as a service to customers so that customers keep their brokerage accounts with Schwab.

I am not sure about markup on SWIFT transfers. It is not 0.43% or higher from my experience and 100% I payed no fees.

Don’t get fixated on stated fees, it is the end product that counts. I have a US and a UK account with HSBC and they brag that their global transfer between accounts is free of any fees and is completed in minutes. However I have done the following several times to verify how much better Wise is. I will set up a transfer of money, say $15k, to my UK HSBC account and I will have 2 windows open on my browser, one logged into Wise and one logged into my US HSBC account. In both windows I get to the final screen to see how many £s will arrive in my account and Wise is always tens of £s better, so I click cancel on the HSBC transfer and submit on the Wise transfer. Since Wise is already set up as a payee in my HSBC account it then only takes a minute to wire the $15k to Wise.

In the past, before Wise and me having a US HSBC account I used various forex companies such as xe.com to send money to the UK, and once to Ireland to pay euros to rent a holiday cottage.

 

[braumeister]

I agree. What I am trying to say Schwab provides this as a service to customers so that customers keep their brokerage accounts with Schwab.

You might want to take another look at the title of this thread.

 

[DjBrown]

According to this lady Schwab VS Wise advantage depends on how much you are wiring.
Clearly markup = Conversion rate is better with Schwab. If you don't pay any fee (which is a case for large accounts) Schwab wins on every level.

I do agree that Wise has excellent rates that beat almost any bank, but Schwab is even better.