Hacker News Reader

Comment by xmodem | Hacker News Reader

I'm very happy with TransferWise' low fees, but their 'borderless' account is unfortunately no substitute for a real account in the native currency in a lot of cases.

View on HN

I'm not sure whether their fees are really that low. For transfers between your own accounts, for anything over very small amounts, I found that their 0.35% variable fee is pretty large compared to adding the funds to a brokerage account and then doing the conversion there (ie. IB charges 0.002% on currency trades, with a min of $2), and transferring back out into the desired currency.

Well, for starters most transfers I and my friends have had to make are not to our own accounts. There's also the time issue - I have an IB account, and love it, but most of the time I'm using Transferwise because I'm in a different country and paying someone, or because I need to move money between my own accounts quickly. Transferwise is literally instant for about half the transfers they do, which is incredible. Meanwhile with IBKR I'm usually out at least three business days for any USD funds to show up in IBKR, plus whatever time to wait on the foreign currency side. Then there's also the UI - sometimes I need someone else to transfer the money, or IBKR's login system is locking me out, etc etc, and in those cases Transferwise always wins. Or if I'm transferring under 25k and I need to do it outside of market hours - in that case my transaction is an odd lot at IBKR, getting me (oftentimes) bad rates, and I might as well use Transferwise.

Don't get me wrong, I like IBKR and I do use it, but Transferwise is definitely more useful 90% of the time.

Yeah, you're definitely paying a premium for them handling smaller quantities, end-to-end, in one easy tool. IBKR requires knowledge of Forex trading, but is hands down the cheapest and fastest solution - for those that are able to work it. To be fair, that describes basically all of IBKR.

It's still mind-blowing to think IBKR charges $20 per million, when the airport Travelex will charge you $20 per hundred lol.

Could you explain how this works, or point me in the right direction on what to read? I'm interested in not using Transferwise as much if this is better.

https://www.interactivebrokers.com/en/index.php?f=759

You'd open up a trading account, deposit funds from one country to it (generally free in EU/UK, can be done with a simple bank transfer, though can take 1-3 business days). Rather than the common use case of a brokerage account to buy stocks/invest, you place an order into their IdealPro order book they run to buy the currency you want (might have to jump through 2 trades, they don't run every single pair). Generally this is tailored at larger investors, so anything under $25k is subject to some additional fees due to being a small size (https://ibkr.info/node/1459), but still significantly less than the 0.35% TransferWise charges. The costs for you are commission (<0.2bps), potentially small size fee (1-2 bps), and crossing the bid/ask spread, which is ~0 for currencies). When that order has been filled you now have the desired currency in your account and you can transfer it back out (potentially to a different country or different account).

In some countries you'd have to include it in your tax reports of your are using this method. An additional thing to take care of

You're probably right, but that's not the point.

It's a free/cheap multi currency account with local bank details in 6+ countries, which give you 90% of the functionality you want, namely the ability to hold and transfer cash.

If you need more functionality you get a local bank account.

The deal breaker for me is the fee for bank transfers, something I've never paid for before.

> The deal breaker for me is the fee for bank transfers, something I've never paid for before.

You are too young :-). This also might change. German banks start again to take monthly fees for accounts, so why not for single transactions.

This said, I have to deal with accounts in NZ and Europe. Fees as well as speed for transfers between them is a whole other world when using TW compared to classic banking. These kind of costs have exist forever, SEPA conditions are the exception, not the rule, internationally. TransferWises multi-currency account is a nice part of the package. I learned here today, this can be done even cheaper by using a Forex broker like IB, but I don't need this on a daily basis.

Where do you live? Bank wires are pretty expensive everywhere I've seen. (local bank transfers like ACH are free on TW too)

In the UK, EU and Australia - probably a few other places too - fees to transfer fund between do not exist (unless you are a business).

I guess this is something that might have changed - but I definitely recall being charged for making transfers from Poland to the UK, and same very recently for Switzerland <-> UK transfers. In both, rather insidiously, the outgoing bank cannot tell me what the final fee will be, and I only find out what was charged when less money appears in the recipient account than what I sent.

There is no fee to send money from your TransferWise Borderless UK account to another UK bank account.

There is, it's just really small: 34p or something.

EDIT: 32p - https://transferwise.com/gb/pricing/borderless-send?source=G...

There's a few for ATM withdrawals over 300 a month. Whereas all banks in New Zealand don't charge any fees for this on most if not all account types.

New Zealand too.

EU / Switzerland, so I've never experienced this. I thought it was due to SEPA preventing such fees, but that doesn't seem to be the case if I read this section correctly: https://en.wikipedia.org/wiki/Single_Euro_Payments_Area#Char.... I guess healthy competition just killed these fees.

I apparently have to pay €0.28 per transfer in EUR with Transferwise. There are competitors (both in CHF and in EUR) that do this for free. I do something like 8 transfers per month, so that's 8*0.28*12 = €26.88 per year, for no added value. Not convincing.

how much is Dwolla in comparison?

their ACH fees does seem a little more expensive

What are the limitations?

The list of countries where the fees are lower than just using your card from $OTHER_COUNTRY is very short.

That’s a dealbreaker for me, but I’m a happy customer of theirs for transfers.

Often getting an account in another country is a big hurdle - TW makes this incredibly easy.

e.g. I'm opening an account in France at the moment (as a French resident!) and it is taking literal weeks and lots of scanning documents, posting paperwork, phone calls etc. TW opened a Euro account for me in a few clicks.

One in the US is that you cannot use a borderless account for ACH transactions initiated by the counterparty (despite it presenting the details that make it look like you can).

I'm curious to know how you verified this. The help text in the app is explicit that "There's no fee to receive ACH payments, or any other kind of payment that uses your ACH routing number."

I remember the app used to show two sets of US bank details, and that the routing number for receiving wire transfers was different from the one used for receiving ACH transfers. But that seems no longer to be the case.

Yes they were consolidated recently, less than 6 months ago.

I regularly push money into my TransferWise USD account from another USD account and they supposedly added direct debit support about a year ago.

Are you sure? I’ve done ACH transfers from my own bank account into TW.

I know if the ownership details don’t match up exactly there are extra steps, but it was pretty painless for me.

If you're saying that people can't transfer money into your account via ACH, then that's not true. Being paid by a client is a specific use they describe.

The opposite is what I am describing. I.e I cannot (read: could not last time I tried it, about 2 years ago) pay rent using TransferWise, upon entering the routing code and account number.

That means no paychecks, right?

have you looked at Currency Cloud?

Reply on news.ycombinator.com