Moving money from US to Portugal to buy a house strategy?

Finances
21

Hello.

I highly recommend not using Currencies direct for transfering your money from USA to Portugal. Had huge problems with them last year. Wise was good but I only used that for smaller amounts.

22

Hasn’t anybody used XE or OFX for larger amounts of money transfers? I ran a quote on Wise and the fees were atrociously high
as high as the bank for larger transfers. Reviews I read confirm this. XE and OFX seem a lot more reasonable priced. OXF has some pretty strict security measures, such as uploading a video of your face and recording of your voice.

23

I believe all money transfer options have been discussed extensively on this forum.
The ranking so far is this:

  1. IBKR
  2. Wise
  3. traditional bank wire transfer
24

My lawyer told me that I need to use the bank transfer option due to the need for traceability of the transfer. However, in that case, I do think it is important to also check and see which is better for the conversion - either have it converted to euros by the sending bank, or by the receiving bank. In my case, the Portuguese receiving bank had a much better exchange rate.

1 Like
25

Apparently not. Try it and let us know.

You pay for the safety of the major transfer paths. Assuming of course even they are safe. SWIFT transfers are not for the faint at heart.

I’ve used XE in the past many times. Their fees are ok. Better than other alternatives? shrug Would I move 350k through them? Nope. Wouldn’t use wise either, unless I did it as drips and drabs.

What you’re paying for:

  1. obscurity - how many US citizens do international transfers in the first place?
  2. scale. Most US banks do NOT have international currency desks or access to deep liquidity. When they do a trade, they’re paying someone else. Citi and JPM have real desks. That’s it. Everyone else is basically paying them. How many correspondent accounts sit at JPM? There’s a reason. Hell, if you pay attention, you’ll note that IB itself routes JPM Germany to get to the continent. But they’ve no incentive to give great rates to RandoBankX who is moving a little cash occasionally.
  3. currency risk. There is no such thing as a single market for currencies. They’re all traded OTC between counterparties. The liquidity you see on IB is really you only trading against counterparties on IB itself, the arbitrage they may be doing against other platforms - and IB’s own market making group itself. But all that means is that there’s no clear single market - you’re paying for that arbitrage and slippage for price signals to reach between liquidity pools. Meanwhile whoever you’re dealing with is taking a currency risk on your behalf, for the time between “accepting your trade” and “actually doing the exchange wherever they can manage in a size that the counterparty will accept”. This is real shit. if you want to trade 100k but the average block size is 1mm, either your side’s gotta ball together enough individual trades enough to get to size and accept the currency risk, or the other side will treat you as an odd lot and screw you for it.

When you’re used to Schawb or Robinhood charging low to no commission on displayed spreads that are penny-wide, you miss the fact that you’re still paying anyway - just via PFOF and a mid-market that’s getting pulled around such that it is displaying what Citadel needs it to be to make the PFOF fees make sense. There is ZERO meaningful liquidity at the displayed mid-market. It just looks good to you the consumer. Any market-maker worth their salt has algos that are adjusting their expected execution price based on their predictions of what the real liquidity is. Don’t believe me? Go try to hit that displayed liquidity with any size and watch the market literally run away from you as toxic.

The rest of the world’s markets do not work like this. So you can’t really expect it.

You can also focus too much on fees. Currencies move 1-2% in a day or two. Great, you got a 20bip cheap transfer. The currency then moves 100bp against you. You’re still hosed. Maybe by less, sure.

I’m not saying to let yourself get screwed, but squeezing the last penny out for something you’re going to do exactly once anyway?

I imagine you will get better exchange rates on the European side, at least out of the major banks. I can see where say BIson would do a better job, since they’re wealth mgmt anyway and tied off-continent so they’re changing currency all the time.

One word to the wise: Don’t just transfer the entire lot in one go. Do a EUR100 wire transfer. Make sure it actually goes through using the instructions you give them. Then transfer more.

I just recently tried to move a mere EUR400 to Activo, using Activo’s instructions. Real straightforward. HSBC has a nice, clean interface, Activo has a SWIFT mnemonic, and it’s tied to Millenium anyway. Easy, right? Nope, bounced. Took me two weeks of waiting because Activo wouldn’t investigate until it’d been two weeks. Then they couldn’t find it. Finally talked to HSBC who said someone bounced it, I think JPM, with an invalid routing instruction through what appeared to be some correspondent account. It was a frustrating experience. But it was $400, and it cost me $35 in fees on what was supposed to be a fee-less transfer since HSBC lets me wire without a wire charge. EOD, if I’d lost it
 I’d have been really annoyed, but not hurt. I really need to wire several grand for a bunch of fees, though. Imagine if that’d have gotten lost somewhere, or had a percentage whacked out in fees for mis-transfers?

(I ended up using IB and SEPA. But I’m a long time customer of IB. If you aren’t, I don’t think it’s going to work out well for you. Not that I know.)

26

Thanks for the follow up. I hadn’t seen this particular post.

Kerry Antoniadis

27

Exactly my thoughts, hence I chose for myself the ‘safest’ path #3.