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Comment by hkmurakami | Hacker News Reader

Having been recently charged a 4% worse FX rate than the going rate in an 5-figure international wire transfer, a world where the current financial transaction system is torn apart cannot come fast enough!

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For this kind of transfer I recently discovered and have saved tons of money using TransferWise. Their model is to charge a moderate upfront fee (0.5% for £200 and up), but then after that they complete the currency conversion always at the exact mid-market rate. The fee may sound like a lot at first, but as you discovered, all the banks "hide" their fee in atrocious exchange rates, such as the 4% mark-up you experienced.

Some downsides are that they don't support every currency yet (cf. https://transferwise.com/support/customer/en/portal/articles...), and they can be significantly slower than banks.

Anyway, here, use my link and I get some money. (and you get a free transfer up to £3000): https://transferwise.com/u/85ec4

Hey this looks great! Getting gouged for 4% on a recurring basis was stomach churning for me, so I'll definitely look into this more (and will use your link when doing so).

Anything below 1% and I'm totally happy.

If you do this transfer often I recommend moving your currency to a brokerage and then doing a FX trade. You will often get close to BBG spot rate using IB.

I'd also recommend this approach. FX is a cash cow business for banks. Money changing is one thing, where the business has cash management risks and cost, but FX on a wire transfer is close to 100% profit for the institution. They trade at mid and keep that 4%.

As the parent poster commented, Interactive Brokers will give you rates close enough to mid as to not matter (e.g. the current rate to buy/sell EUR with USD is 1.2313/1.2312, plus a few dollars commission).

Hell, even Transferwise would be < 1%

How would you go about setting something like that up?

I assume this comes with quite a few caveats?

Sign up with a brokerage account, there are many. interactive brokers is one of the cheapest (I'm not affiliated). Then, link your two bank accounts with the brokerage. Buy/Sell you currency then transfer the funds via wire/ach...

Seems awesome for personal uses (which I expect to be doing on a fairly regular basis). I persume this might make business tax compliance a bit more complex, but at some point it may be worthwhile for me in that realm as well.

Thanks!

With price fluctuations of Bitcoin, 4% could be a pretty good deal!

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