How to Send Money Abroad Without High Fees by Using TransferWise

How to Send Money Abroad Without High Fees by Using TransferWise

Last Update: October 27th 2020

Whether it's for your business or for personal use, I found myself more and more having to transfer money internationally, and usually also convert money from one currency to another. For example, every month I need to convert some of the money I earn from my business & investments (mainly in US dollars and Euros) to the local currency of the country where I live at the moment, for example Polish zlotys (PLN). 

I still see many people using traditional banks to do that, and loosing a lot of money in fees in the process. In this article, I will tell you what online service I use to nearly completely avoid fees when transferring money internationally.

Why Using a Online Service Rather Than Your Bank

The number one reason to use an online transfer services like TransferWise or CurrencyFair is to avoid the huge conversion fees that are charged by banks when transferring money abroad, and especially when making a currency exchange. For example, my French bank charges about 42 € of fees when transferring money outside of the European Union, for example to the US. But that's not all. The biggest fees are usually not the one charged by the bank, but comes from the fact that your bank will usually give you a very bad exchange rate. Another example of this: if I want to transfer Euros to my local account in Poland (in PLN), if I use my French bank I would get a rate of 3.9 PLN for one Euro, at the time this article was written. However, a quick online search will show me that the current rate is 4.2 PLN for one Euro! This means that over a transfer of 1000 Euros, I'd lose about 71 Euros just because of the 'bad' conversion rate!

Services like TransferWise were made specifically to solve this issue: as they have banks in all the countries (or areas) that they support, they can provide the best exchange rates for all your transfers. They charge some fee for each transfer as well (they have to live from something), but it is usually much lower at the end compared to a traditional bank. For example, taking into account the transfer fees and the bad conversion rate, a transfer of 1000 Euros in US dollars will give me 

It also solves another issue that I encountered personally with some banks I was using in the past: sometimes, you don't even have the option to send money where you want to send it. For example, years ago I wanted to transfer money from my French account to the US, and there was just no online option to do that, even by paying huge fees. If I wanted to use my bank, I actually had to go in the local branch (located at more than 2000 kms from where I live now!) to make the transfer. Services like TransferWise therefore also solve this issue, as it supports most of the countries & currencies in the world.

Why TransferWise?

As I mentioned before, there are many options when it comes to using a platform to transfer money abroad. And although prices can vary, I always use TransferWise as they usually have the lowest fees on the market (and by fees I mean the actual transfer fees plus what you would loose due to an unfavourable conversion rate applied by some platforms).

They also have an interface which is very easy to use, whether it is to open the account or to actually transfer money. They also have a bunch of additional features except transferring money, which I will mention at the end of this article.

How to Make a Transfer

Let's now see how to actually make a transfer using TransferWise. As I mentioned earlier, it's actually really simple. After opening an account, when initiating a new transfer you will see this first step:

How to Send Money Abroad Without High Fees by Using TransferWise

That's where you will put how much you want to send, and also in which currency you want the recipient to receive it. You'll also get a live estimate of how much this will cost you, and even an estimate of how much this would have costed if you were using a traditional bank.

Then, you will be asked to select the recipient of the transfer:

How to Send Money Abroad Without High Fees by Using TransferWise

That's where you will input data about the recipient, like his/her name, IBAN number, etc.

Finally, you will be asked how you want to actually fund the transfer. Usually, you will have the option to make a bank transfer (it evens support fast transfer schemes like ACH in the US or SOFORT in Germany), or in some countries even credit/debit cards for an even faster payment:

How to Send Money Abroad Without High Fees by Using TransferWise

After that, you're all set and you'll just have to wait for a few days for the money to be transferred. I usually see that transfers that are funded by debit/credit card arrive to the recipient in less than 2 days, whereas with a bank transfer it's usually 3 days in total.

Other Useful Features

As I mentioned earlier, TransferWise is constantly adding new features, and the one I like the most is called Borderless Accounts:

How to Send Money Abroad Without High Fees by Using TransferWise

This basically allows you to receive money directly on those accounts, like you would have an account at a traditional bank. For example, before that I had to use another service like Payoneer to receive money from Amazon Affiliates US, which resulted in a lot of conversions fees when transferring the money back to my account in Europe. Now, I can just receive money in US dollars on TransferWise, and just transfer it back to my bank account with very little fees!

It doesn't yet support all currencies for direct bank transfer (like it would be your own account), but it's all coming soon according to TransferWise.

So I hope that this article will help you to reduce the fees on your next money transfer abroad! Also, note that if you signup to TransferWise with any of the links found inside this article, you'll get 500 worth of free transfers!

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