How to transfer money internationally to another bank for free
If you’re like me and receive payments in multiple currencies, you’re probably tired of getting a bad deal on the exchange rate. I was letting PayPal convert automatically for me and getting charged heavily as a result. There’s also a 3.5% currency conversion charge on top, so you end up losing out a serious amount of money, just for accepting payments.
The same is true of other providers and bank accounts. I was getting charged 2.99%
on top of a terrible rate by my bank account. This is why I want to share some tips and tricks that I’ve found over the years to get the best rates, it'll hopefully help you if you’re in the same position.
Transferring money to foreign bank account
It doesn’t matter what currency you convert to or receive in, this will work for you. By far, the best service that I’ve used is Transferwise, which ended up saving me about $40 for each $1000 that I received, see the real-time currency conversion rate here.
So you can input the currency that you want, and it’ll tell you what the rate is right now. What you see is what you get. I didn’t trust this at first given my experience, but I’ve done plenty of successful transfers, and can reassure you that it’s legit.
If you like the look of it, you can then sign up for free, and if you find this information helpful,
I’d appreciate it if you use my link. It doesn’t affect your transfers, but it'll help support this channel, which allows me to share helpful content for free.
First of all, most companies involved in currency exchange add a mark-up to their exchange rate, whereas Transferwise doesn’t, which is the first thing that attracted me to try out the service.
They use the actual exchange rate that you’d find on places like Google, whereas other companies use an inflated rate on top of their extortionate fees, so you end up getting doubly charged. If you scroll down on the main page, you can see the actual exchange rates offered by other services, which are correct and up to date - you can verify them by going onto their sites if you want.
The feature I like best is that when you’re registered, you can click “open a balance” and create a new currency on your account in about 5 seconds. So if you’re American and want a British bank account, you can just click a button and you’ll be given a sort code and an account number to use, which is what you need to share with people to get paid without fees.
The same goes the other way around and for any currency, you can get a bank account. That's what I did for my American account and other foreign transactions. It seemed too good to be true, and I was so distrustful when I started that I was sending $1 at a time to my new American account because I thought this is just too easy, what's the catch?
The payments worked out every time, even when I got the confidence to start sending large amounts of money. You can even request a physical card to be sent to you for your new overseas bank account if you want.
I've not done that because all my transactions are online so I don’t need it, but it’s a nice feature to have. When someone sends you pounds, for example,
it goes to Transferwise’s British account, then they send you money in your currency from
an account they have in your country, so technically the money isn’t converted, it’s just stored separately, in accounts opened in their respective countries by Tansferwise.
The same goes for payments that you send to other people. You can avoid a large amount of fees this way. I hire a lot of freelancers who work for me and get paid in dollars, so rather than getting charged a transaction fee and a currency conversion for paying them, I pay directly in the currency that they use.
If you use Etsy, or Merch by Amazon or similar platforms, you can avoid currency conversion fees by paying or receiving directly. This saves a fortune in the long run.
I also get paid in dollars through PayPal, which is something that I can’t change because PayPal is the only pay-out option. You can add your Transferwise multi-currency account to PayPal, so you can send/receive money in any currency.
This is a bit confusing at first, and you’ll find mixed information online, but I managed to do it and I’ll explain how. On PayPal, you can go to your wallet and click “Add a currency”.
You’ll be presented with this list of options and you can click the new currency to add immediately. This means you can receive payments in that currency on your PayPal, but the problem is these payments will just be stuck in your account.
What we also need to do is add a bank account in that currency. This is where it gets complicated as there’s a list of mainstream banks and Transferwise isn’t on that list. You can start typing something in the search box and then manually add the details, but if you’re using Transferwise, it might not go through.
I found some people were saying that they were able to add it, and others were saying that they couldn’t, so sometimes it works, and sometimes it doesn't for whatever reason.
Some said they had to call PayPal to get it added and they were able to put it on that way, so I called PayPal but was told by the advisor that it simply wasn’t possible to have this kind of account with PayPal.
I didn't believe them, so I just called back and got someone different who put it on straight away for me, and I’ve been using the service ever since, saving a lot of money.
This allows you to avoid the poor exchange rate and currency conversion fees. When it’s added as an account, you can send and receive dollars, pounds, or any currency through PayPal. You connect your native currency bank account to Transferwise and then you just re-route all payments through to that.
It removes the barrier between sending and receiving payments internationally. Traditional bank accounts only work in one country and currency, unless you’re willing to pay their expensive fees. This bypasses that outdated process and allows us to make the most out of international exchanges.