What is the cheapest way to send large amounts of money from EU to US?

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There is a similar question regarding "small amounts of cash", but at some point I might need to transfer more than 50K€ to the US. I am looking for the cheapest (less commissions, better exchange rates) way to do it. Is it better to do it in euros or dollars? Somebody was giving me a 3.5 per mil commission, but I don't know if that is good or outrageous.

arkaia

Posted 2014-04-23T00:48:12.533

Reputation: 348

As always, the cheapest way is by postal service. – Flimzy – 2014-04-23T04:14:43.353

@Flimzy Can you elaborate on that? – gerrit – 2014-04-23T14:09:18.960

1@gerrit: The cheapest way to send money is to deliver it physically. For any distance longer than that which you can walk, the postal service is the cheapest courier service available. What elaboration do you need? – Flimzy – 2014-04-23T14:13:53.807

@Flimzy I don't think that's allowed for large amounts of money, and one would still need to exchange the currency. I doubt it is cheaper to exchange 50,000€ in cash than 50,000€ electronically. – gerrit – 2014-04-23T14:16:45.360

@gerrit: So what you're saying is that you think the question is not really looking for the cheapest way to send money... which makes this question very subjective. – Flimzy – 2014-04-23T14:25:08.767

Where to get the best exchange rate (whether for cash or electronically) is a very complicated issue, and depends on many factors, not the least of which is where you bank--making that aspect of the question, IMO, "too localized." – Flimzy – 2014-04-23T14:27:58.610

2@Flimzy Arguably, "send money from EU to US" implies exchanging between euro (or another EU-based currency) to USD. – gerrit – 2014-04-23T14:30:06.313

@gerrit: Perhaps so. Which makes the question even harder to answer objectively. – Flimzy – 2014-04-23T14:32:47.537

2I think this question can be answered objectively, as it is quite specific. – gerrit – 2014-04-23T14:36:12.630

I think the question was in fact answered objectively by Rob Hoare. There might be some details specific to each transaction, like in our case the fact that the US does not allow sites like CurrencyFair.com or currencyonline.com to send money if you are a US resident. Overall, the information provided was useful and that should be the point, I think. – arkaia – 2014-04-24T18:33:03.203

Answers

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There are several costs involved in sending money internationally. For a large amount, the most significant of these is the exchange rate.

At a bank, there is usually a 2-3% "spread" on the "interbank rate" (the middle rate you see quoted on sites like xe.com, Yahoo, Google). This means that if (for example) the interbank rate gives you 1.4 USD when you sell 1 EUR, the bank may offer 1.4*0.97, or 1.358 USD per USD. Doesn't sound much difference, but that 4.2 cents per € difference comes to a couple of thousand dollars on a €50,000 transaction.

To get a better rate than a bank, you need to go to a specialist currency exchange broker. Most of these have a spread of 1% or so. There are additional costs, you have to send the money to the company, exchange it, then send it on to your bank in the destination country. Companies like this include currencyonline.com, xe.com, and probably others in your country (although it doesn't actually matter which country the broker is in, CurrencyOnline do a good job from New Zealand).

In recent years, there's another alternative, peer-to-peer currency exchange. The largest and best-established of these is CurrencyFair.com (in Dublin, Ireland). I've used them for several years now, without any problems.

These work in a similar way to currency exchange brokers, except you're exchanging money (anonymously) with somebody who wants to exchange money in the opposite direction. This means the spread can be very tiny, often under 0.5% (in fact I've sometimes got a rate better than the interbank rate).

Currencyfair accept Euros into their Dublin account from any EUR account (as well as separate GBP, USD etc accounts). You should be able to use free bill pay from any European account. Then, you exchange the money at the rates shown on their marketplace (if you want a certain rate, you can put the offer out there and wait until rates move in that direction). Then, it's transferred out to your own account in for example the US, typically for 4 USD. The combination of great exchange rates and low transaction costs makes it hard to beat, and for GBP-USD the whole process can take under 24 hours.

Note that CurrencyFair, and an increasing number of other currency brokers (and financial services in general) can't deal with US citizens and residents - too much regulation from FATCA and other US paperwork. People in the US may find their choices are very restricted. One way round this is to set up the account from the other country (in Europe), if you have the basic Know-Your-Customer paperwork from there (passport etc).

Whichever currency broker you choose (or are limited to), it's still almost always a better deal than a bank. Just be sure to check how much it costs you to send them the money (if they require a wire transfer that can cost a lot), and how much they charge to send the money out (again, a wire transfer can eat into the savings).

Rob Hoare

Posted 2014-04-23T00:48:12.533

Reputation: 2 287

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I haven't tried it just yet, but in few weeks I intent to use TransferWise.

Advantage is that it covers both currency exchange and the international transfer. Their EUR/USD exchange rate has zero spread, they only charge a fee, which currently seems to stand at less than 0.5% for EUR→USD transfer.

Behind the scenes it works, because there are people in US wanting to send money to Europe, while at same time there are Europeans sending money to US. Instead of doing international transfers, it just does internal clearing, transferring the money in and out from local accounts.

Downside of TransferWise is that there is no option to send money to bank account that is not in one of the supported countries.

vartec

Posted 2014-04-23T00:48:12.533

Reputation: 1 973

1Can highly recommend TransferWise, have saved about £1000 in fees since using them over the past year or so... – Dean Ward – 2014-07-22T19:37:17.483

Ditto. Been using TransferWise for ~2 years now without any issues. Have yet to find a better deal. – Rob P. – 2014-07-28T12:50:50.557

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I have been using Paysera for USD to EUR transfers, however never for such large amounts. They advertise that there is no limit for how much you transfer, therefore it could be an option. They have a flat rate for transactions depending on the currency, so if the same applies for such a large amount, then it would be very cheap.

roe

Posted 2014-04-23T00:48:12.533

Reputation: 21