Lowest Cost International Transfer from Account in US to Portugal

Hello! We are all here transferring large sums of money for our GV investment. I would like to know how others have gotten their funds to Portugal legally :slight_smile: securely, and at a low cost. As a starting point, I have heard about Wise (formerly TransferWise), Currencies Direct, OFX, Xoom and RationalFX.

If you are in the US and did not use your home bank in the US to wire funds to your account in Portugal:

  1. What service did you use?
  2. At what rate were you able to transfer funds (as compared to the official EUR-USD rate that day)?
  3. Did you do your transfer all in one lump sum?
  4. Did you encounter any problems in making your international transfer?
  5. What potential problems (GV-related or otherwise) should I look out for?

(I personally have decided to go through the EUR 350,000 real estate option, have opened an account with Millennium BCP and am ready to move money from my credit union in California.)

Thank you in advance!

Jay

I wired dollars to my dollar account at Bison Bank. Bison converted the funds to Euros at no cost and no spread, which is almost too good to be true. My only lossy cost was the correspondent bank charge by CGD of a few Euros.

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We just bought a farm in Portugal and used OFX. The service is fast and secured but the exchange rates are not transparent. Customer service is great. Transfer Wise has better rates and you can see the fees.
Hope this helps

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I’m soon going to be transferring money from Schwab to Bison Bank. I’m trying to figure out if I’m better off doing the conversion with Schwab or Bison. Schwab has good exchange rates in my experience, so I was planning to do that, but it sounds like I should consider Bison? I guess I can get a quote from both and see which is better.

I encourage you to check for yourself. My experience was that the currency exchange at Bison was literally free, a complimentary service for valued customers. That is, if you hypothetically changed from dollars to Euros and back again, you’d have the same number of dollars you started with–no fees, no margin. You can’t beat that. In an earlier post, I tallied the Bison conversion outcome against quotes by TransferWise and xe, and Bison was the clear winner. I didn’t check with Schwab or Fidelity, but I’m guessing it’s not free.

A word of advice: it is crucial to ensure that the right correspondent bank (CGD) is explicitly specified on the international wire instructions. Another frequent poster warned me that her initial test transfer of a few thousand dollars had gotten “lost in the mail”–routed to the wrong intermediary bank–and had been returned to sender a week later with about $100 in fees deducted.

Although my ARI funds originated from Schwab, Schwab did not have a convenient way to supply the vitally important correspondent bank wiring instructions; I would have had to fill in and mail a paper form to proceed. :-/ Since I had already been through the process with Fidelity, I first wired the money from Schwab to Fidelity, then two days later wired from Fidelity to Bison. It requires persistence to convince either Schwab or Fidelity that the correspondent bank is needed. Both times, after a half hour of negotiations on the phone, the pleasant Fidelity reps hunted down obscure guidance in their systems that convinced them that my concern was valid. You might consider making a test transfer first to ensure that the process goes smoothly; losing $1000 would hurt less than losing $400,000.

If you don’t already have it, ask Bison for the wiring instructions for your dollar account. To clarify, you only need to specify CGD as the correspondent bank (or intermediary? whatever it’s called). You don’t need to route through Citibank in New York; US banks can send directly to CGD.

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You need to consider both any fees, and the spread you’re being charged. A bank can easily just use an unfriendly spread and collect the money that way instead of in an explicit fee. Thing being that it’s hard to get someone to quantify what spread they are going charge versus interbank - and what interbank even is. There isn’t an “exchange” or a “latest price” because it’s all over-the-counter trades at the bank-to-bank level, and to get an accurate sense of it you have to get a quote from both vendors at the exact same time… and then it’ll vary anyway. I’ve been using Interactive Brokers where the spread is in fractions of a bip, with the intent of wiring the actual EUR to the bank, for which I’m only charged a wire transfer fee. Or so the plan goes anyway.

(I’ve actually been averaging in over the last couple months. Idiot me didn’t take the leap at 1.17 of course.)

and yes it’s called a correspondant bank. The issue is that only certain banks actually participate in SWIFT (international) at all. So what happens is a bank like Bison will make an arrangement with, say, JPMorgan, such that to the US, it looks like a regular fedwire ABA target, but JPM knows anything going to that account is really to be transferred to Bison over SWIFT. Alternatively, a regional bank (say M&T or BBT) has an arrangement with a JPMorgan such that if the regional bank needs to do an international wire transfer, it forwards the wire to JPM with instructions for the further transfer. As you might guess this can cause quite a mess.

The best arrangement is to simply have an account with a JPM or Citi or HSBC that is natively hooked to SWIFT, so you can punch directly to the international bank. This reduces confusion, and typically you’ll just get interbank if you’re a premier customer with no markup. of course it also requires having the requisite bank account in the first place, and opening the account for the sole purpose of doing the wire transfer is folly at best.

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I would use a real bank to transfer large sums, even if it is more expensive. With Wise or Revolut they just can close your account for what reason ever. Too insecure. I am European

I think this is only true if for pure currency speculation. But if you convert USD to EUR to buy a Portuguese stock, then later sell the stock in EUR and convert back to USD, that’s just a normal capital gain/loss since the primary investment was stock, and the currency exchange was just part of buying/selling the stock.

Actually, for currency speculation, you can elect special treatment to get mark-to-market/cap-gain, IIRC.

That said, you’re right, now that I think about it. You have to account for the gain/loss counting for the currency mark as of the time of transaction, since you have to account for the purchase/sale in USD. That said, any currency changes that happen before and after the sale do count as a separate sec988. It’s messy.

I’m deleting the previous post since it’s not correct.

This is very helpful and on point. I was thinking the best option is setting up a global HSBC account. If you keep a balance of 75k you won’t be charged any fees. You can open a Euro account once you have your US account established. My understanding is that you can then move money back and forth between your Dollar and Euro account to your heart’s delight. Unfortunately HSBC does not have an office in Portugal or Spain so I will open my account in France. I am not sure if you need a local Portuguese bank or could just use your HSBC euro account to do business in Portugal.

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Well, that’s another wrinkle on it, yeah. If you can set up the multiple accounts in multiple countries, then they make it easy; they have a global footprint and way of thinking that lets them tie it all together into One Global View and One Identity. Of course that requires you have the footprint in the multiple locations already - just because you have a US account does not mean you can open a French account as a US citizen; you have to “exist” in France already, so to speak, to meet whatever requirement the French bank would have imposed if you walked in the front door. It’s just that once you have Premier status, you are Premier everywhere whether or not you have any money in the local account or not, and everything’s just all linked together. In the old days at least, your Premier credit card meant you could walk into any HSBC anywhere on the planet and they’d make a creditable effort to at least try to help you in whatever way they could - emergency cash, phone calls, no-fee-everything as if you were a local, etc - as a courtesy, even if you didn’t have an HSBC account in that particular country. I’ve done it. It’s really kinda weird. Or HSBC would cut you a mortgage in some new country based on your credit in whatever country you were coming from, irrespective of local standards. Alas, as HSBC’s footprint has shrunk, this has become less useful, but it’s still fairly unique IME.

Frankly the thing I like most about HSBC is their wire transfer interface. Fast free wires anywhere in the world through a non-stupid interface from a SWIFT-native bank.

The Global Money Account thing sounds great but it isn’t really that useful. It’s like a mini-venmo or something.

You can get HSBC Expat, which is a Jersey-based bank; they have USD/GBP/EUR accounts. Standalone it’s a terrible deal, but if you’re Premier then all the fees drop away and it’s reasonable. But you have to show you’re actually an expat or going to be; I tried, and got bounced because I didn’t have a timetable for leaving the US.

For money transfers from the US to Europe (PT, ES and IT so far) we use Wise. We’ve used Xoom before, but prefer wise.
You can see the current market spot/intraday rate, and what the fee will be before you initiate the transfer, no surprises, no guessing. I also try to hedge and transfer USD to EUR when the rate is good, and use when the rate is bad. The rate has been horrible lately (1.20), and we’ve also made some larger purchases recently at this horrible rate, sadly it could not be avoided.

Usually the transfer completes in seconds, at least that’s been our experience, going from our Wise account to either our IT conto corrente, or to our landlords ES or PT account, or anywhere really. Also note that your Euros are not in a foreign bank, but in the US if you’ve opened the account in the US, so no FINCEN 114 or FBAR required, which is also nice.

As for sums larger than 15k euros, you can send as much as you’d like, you just can’t HOLD in your wise account 15k+ euros for more than 3 days. If you do, you pay the interest since it’s a negative rate for euros currently. Wise is up front about it, and once your euro account has more than 15k in it, they’ll email you, with the notice and what that interest rate is. Here’s what they sent me just this month when we bought our second car in cash.

You’ve gone over your 15,000 EUR free allowance.

We charge an annual fee of 0.4% on any EUR you hold above this amount.

We’ll wait 3 days before we start charging the fee — this means we’ll start charging you on April 18.

The fee is calculated daily based on the amount of EUR you hold above your free allowance. We’ll take the fee from your account at the end of each month.

As an example — this means that for every 1000 EUR you hold above your free allowance, you’ll pay about 0.33 EUR a month.

When I check the rate at wise, it’s the intraday rate, so it’s really current, and if you have a terminal and watch rates, you’ll know. Other services “clear” and use the close that’s posted in the WSJ, like what schwab uses for their no foreign transaction fee ATM withdrawals, it’s that close rate, not the intraday rate.

If you don’t want to pay the interest, don’t hold more than 15k in euros. We have a Euro balance in Wise, to pay for items like rent, or anything that requires a transfer SEP and not SWIFT for payment. SWIFT is expense, old, slow, and happy to never use that again.

Setting up bank accounts in Europe really depend on residency, but you can still get non resident accounts (although some banks don’t want the hassle of an American customer and the reporting requirements), and most countries don’t know the difference between them cross borders. FWIW.

OP: Jay

  1. What service did you use?
    Wise

  2. At what rate were you able to transfer funds (as compared to the official EUR-USD rate that day)?
    Intraday rate.

  3. Did you do your transfer all in one lump sum?
    Lump sum for this instance.

  4. Did you encounter any problems in making your international transfer?
    Zero - went from Wise to a car dealers SEP account instantly, they confirmed receipt in minutes.

  5. What potential problems (GV-related or otherwise) should I look out for?
    The important things are the rate and the fees.

Good luck with your purchase!

I am not so sure about that. I highly suggest that you verify this information.

Which part are you not sure about?

I’ve contacted Wise support about this specifically, and they indicated that they are registered as a US entity, not a foreign bank.
Here’s their US address.
TransferWise
19 W 24th Street
New York, NY 10010
United States
They’ve also indicated that since I opened the account in the US as a US resident, all my money, regardless of currency is kept in the US. Other accounts may vary depending on how/when it was opened per residency rules.

‘Foreign Bank Account Report’ (FBAR) – aka FinCEN 114
Required if your aggregate non-US financial accounts total over $10K USD at any point during the year. Since Wise, even your Euro holding account, is a US account, it’s not required for reporting on FBAR.

If you have information to the contrary, I’d love to review it.

I have posted about this previously in a different thread.

First, I received conflicting information from Wise support.

Second, if you check the IBAN used for your Euro denominated accounts you will quickly determine they are NOT assigned to US banks.

I suppose it is possible that Wise is using European bank routing only as passthrough intermediaries but this seems highly unlikely given the highly regulated nature of finance.

But don’t just take my word for it, Solved: I live in the US and have a transferwise account w… (intuit.com)

I spoke with two different support agents at wise to confirm what they told me.

I understand about the IBAN numbers, but they stated that all my money, regardless of currency is held in a US bank. The IBAN numbers are used as routing to their ledger.

When I inspect my transaction, it’s actually not sent from my IBAN euro account, but their account through their European banking partner. The recipient’s inbound transaction was in care of my account, and not from any of my account numbers, iban or otherwise.

Probably how moving all money only cost me 0.28 euros.

Well, you may well be right.
I am not trying to convince you to file the reporting with the US government. But i did so and it was painless. I really don’t know for sure if I am right or wrong, but I at least don’t have to worry about not filing it. As far as I know there is no penalty for filing the reporting if you are not required to do so.

I just saw your edit and link to another forum by user MinhT1. Unless they are a representative for transferwise, I guess my comment is as anecdotical as MinhT1’s. CYA and DYDD.
Agreed, file to be cautious and document, document, document.
I’ll reach out to wise support and ask if my account is regulated by Financila Coduct Authority in the UK, but I suspect that is the answer for a British resident and not a US resident.

My suggestion: if you are relying on a statement from Wise for not filing FBAR, make sure it is in writing so that you can use that to mitigate potential treasury dept penalties.

The ONLY thing i could ever get in writing from Wise was something stating that all funds are held in the countrie(s) of the local currency.