Transfer to the USA as an example

TransferWise in a Test:
Transfer to the abroad for only € 1

20.4.2016

Do you want to transfer money to a country with another currency? For example, to the USA? And this at the lowest possible cost?

Then you are at the right spot on our special portal!

We have already presented to you our favourite service provider for international transfers TransferWise in several articles.

Today, we follow up with an update, in which I show how I pay an invoice in the amount of US-Dollar 50 with TransferWise:

Note on the video clip: Normally, the duration of a transfer between Germany and the USA via TransferWise takes about 2-3 banking days. If you look at the dates in the video clip closely, you will notice that in my case, it took a few days longer until the credit entry was made.

I do not want to deprive you of the reason, as it is a great characteristic of the provider. I made a mistake in the account number. The last number was missing. So the transfer could be credited and the money was returned.

About this, I received a notification e-mail from TransferWise. I was asked to check the account number and correct it, if necessary. Alternatively, I could have let the refund be transferred back to my German bank account! 

The fault was on my side – so I corrected the account number and sent the money again free of charge. This time, the credit entry took place within 2-3 days on the payee's account!

It was a great detail that TransferWise carried out the second transfer free of charge and above all, it did not even charge additional fees for the cost of returning, although it was clear that I committed the fault.

At this point, I want to thank TransferWise very much!

TransferWise helps the “humble man” 😉

Thanks to TransferWise, such international transactions between small business owners – like paying the invoice of USD 50 for composing a background music – became possible.

My main bank on the web, the DKB, would have charged me Euros 12.50 for a USA-transfer and the money receiving US-bank another USD 15.

The correspondent bank for the transfer between my and his bank would have probably also cost between Euros 10 and 20!

For smaller amounts, also PayPal could be considered. However, this assumes that both own a PayPal account.

Not everyone is aware that PayPal charges 3 % on top of the current exchange rate, in addition to the transfer fee for merchants. However, this is not a big deal at smaller amounts … in our case, it would have been about Euros 1.40 fees invoiced in the exchange rate! The fee structure at the currency exchange does also apply to private customers!

Why do I use TransferWise?

I opted for TransferWise to process my payments to the abroad, because I particularly like the following points:

• permanently first-class exchange rates through the “pool system” (see Presentation of TransferWise)
• only one login for private and business payments (several companies manageable)
• several “funding sources” possible for the transfer:
  • conventional SEPA-transfer to the TransferWise account
  • via instant transfer (TÜV-certified service provider)
  • debiting from a credit card
• fast execution of the transfer
• fast and free opening of a TransferWise user account.

Let’s take a look at the fees!

Not every transfer with TransferWise only costs one Euro as in my self-test. For transfers to the USA, it charges 0.5 per cent on the current exchange rate – these are 2.5 percentage points less than at PayPal or Western Union.

The basic price is one Euro!

At 0.5 per cent, all USA-transfers of the equivalent of Euros 200 only cost one Euro fee. From the Euros 200 threshold, the per cent rate applies.

If one would transfer, e.g. USD 500 – that is the minimum deposit for the checking account in the USA (in German language), which already some of our readers have opened through us – one would currently pay Euros 2.23 in fees. This is much less than with a classic international transfer from a bank.

As one of our recent tests showed, TransferWise definitely is the best choice for transfers below Euros 2,500 (cheap USA-transfer (article in German language)). In this test, however, it was not taken into account that in most cases also fees of a correspondent bank apply, as well as the charges of the US-bank for an incoming international transfer.

Therefore, I always use TransferWise for international transfers up to USD 10,000 …

… and I have made extraordinary experiences with that. Finally, my US-banks – and I have already received the same feedback by several readers – do not charge any fees for the crediting to the US account, when the transfer was made with TransferWise. This does not count as an international bank transfer in the technical banking sense!

At our test “Transfer cheap to the Czech Republic“ (article in German language), TransferWise incidentally won using any sum, which is due to the fact that the exchange rate was significantly better than in the also tested banks!

Euro against the US-Dollar is traded extremely frequently, so that German banks also offer a fair exchange rate.

The fees vary from country to country

If you want to transfer to a different country than the USA, you may like to take a look at the table of fees.

It is no complete comparison to an alternative bank transfer, because the costs of an international currency transaction is basically composed of

• the official fees according to the price list and
• the exchange rate (providers like to hide additional fees herein).

And yes, one can see the exchange rate at a bank transfer classically with the settlement of the execution. So after you have sent the transfer.

At TransferWise, one can see the expected exchange rate – which applies pretty accurately also at the execution – up front and can still decide whether one wants to execute the transfer now or wants to wait.

Here again the link to ►►► https://transferwise.com.

Question session

Admittedly: I am not a currency expert and neither a “penny pincher” at international transfers … but you are welcome to ask your questions about the use of TransferWise through the comments feature and I will try to get good answers and solutions. If you yourself are experienced in this area, I would be pleased to count on your participation. Thank you very much!

Frequently read articles in this context:

• Withdrawing cash in the USA (Florida)
• USD account in Germany
• ING-DiBa current account as a completely underestimated option for German guests and expatriates!