Ask HN: How do you transfer money internationally? I'm an independent developer living living Canada with some clients in the US. I am paid monthly by cheque in $US and I am looking for the most cost effective way of converting that money to $CAD. I'm interested in hearing about banks, brokers or even using something like bit coin as a means of currency exchange. |
Not this sadly.
If you want to convert your funds at a "Big" Canadian bank, please do so at Tangerine, which has the best rate I found (they take 1.45%) - otherwise, there are plenty of other suggestions in this thread that could help. The best rate will most certainly be with Interactive Brokers (max(0.01%, $2.50)), but the account set up is a bit tedious and they have a few restrictions.
I have both a CAD & USD account with Tangerine but the lack of wire transfer is hurting now, so looking to switch over to another bank.
torfx.com
When I had actual physical cash that I needed to hand in, I found the best rates withL
When that is not an option, I use a bank that has zero foreign transaction fees, and refunded ATM fees. First Republic Bank's ATM refund account, in my case.
Yes, there'll be fees, and it's not as interesting as bitcoin. But it's not a hard thing to do.
Even here in Brazil, where external commerce is completely disincetivised, my bank asks $50 a transaction (the most expensive one).
But then a week later, out of nowhere, my account was suddenly 'limited', with the requirement that I send a copy of my passport and latest bank statement to the US. I enquired and got a canned response.
I have not complied. Two years later, my account is still locked, and there is no way to shut down my account. Never used Paypal since; and I never again will. I hate them intensely.
That said, it's much easier to convert USD to CAD in Canada, then CAD to USD in the US. I had an account at a small regional bank and if you were converting less than $100 of CAD, you'd be lucky if you got 2/3rds of the actual exchange rate.
$1200/year in bank fees just to get paid every two weeks? It's real money in comfy western Europe, in Brazil it's surely a fortune?
The final costs for the exchange are the trading fees (typically $10 per transaction for an online broker), the bid-ask spread, and any fluctuation in price between the buy and sell price (this can be in either direction---gains are taxable). Fluctuations over periods of a few minutes should be small for a highly liquid and stable stock. Always use limit orders to protect against any unusual events such as a flash crash.
There are lots of links found through a web search that describe the process and which Canadian online brokers make this easy to do. Also see http://www.northernraven.ca/financial/NGcalculator.php for a calculator that helps you select which stock to use. You want to select a stock with high liquidity (typically translates in a low bid-ask spread) and also a high unit price (to minimize the relative bid-ask spread cost).
The calculator at the link above shows that using today's prices to convert $10k can save about $80 versus a 1% currency conversion cost by using one of a number of stocks.
For example, according to the calculator, converting $100k saves about $350 versus a 0.3% conversion fee. Even converting $10k is cheaper than 0.3%. What are Interactive Brokers fees?
Another reason is that you don't have to transfer your money out of your accounts to a third party. Everything happens within your brokerage accounts.
1. RBC has a USD account for $9/month. It's the cheapest in the country. For clients who insist on paying by ACH or cheque, that allows me to take USD inbound and hold them as needed.
2. I use a money changer (persepolis work, as do several on King Street) simply because the DIFFERENCE on the exchange can be as high as 1.5%, which is a little nuts. It's not automated (sadly), but companies like Freedman will pick up cheques from you - if you're not already downtown.
3. BTC + Coinbase. Some people are more than happy enough to pay in BTC. That in turn makes it easy to get other currencies without the pain.
#3 is by far the most cost effective - especially if you deal with the occasional non-US currency, as I do. The reality is that items #1+#2 combined helped me shave hundreds of dollars in exchange fees.
https://www.vancity.com/BusinessBanking/AccountsAndServices/...
But CUs are provincial entities, so that may not help you or the OP.
There should also be some banks in Canada (including TD and RBC) that offer US Dollar accounts, such as this one from Scotia[3] that seems to offer direct deposit, so maybe look those up as well.
Otherwise, foreign exchange sites like XE or Xoom may be an option as others have mentioned here, but I'm not too familiar with them.
[1]http://www.tdbank.com/personal/cross-border-banking.html [2]http://www.rbcroyalbank.com/cross-border-banking/index.html [3]http://www.scotiabank.com/ca/en/0,,59,00.html
On the flip side, if you find a way around this - especially for Royal, please let me know. It'd make my life a better place :)
1. Charles Schwab
I didn't know that before signing up, but my US Charles Schwab account has Banks all over the world that I can just wire money to, use my US account number as the "subject" of the transaction and it will magically appear in my US account. No fees, good exchange rate. That way I can get the Money from Germany to the US
2. Currencyfair(.com)
They have great exchange rates. You basically send money from Country A to one of their bank accounts in the country A area (e.g. SEPA) and then buy the foreign currency on their site (quick or marketplace) and transfer it out. Very minimal fees, great rates.
3. Debit Cards
My German credit card and my US debit cards (among them: Schwab) allow me to deduct money from ATMs for free. Both of them don't charge any fees (no cash advance for the German ones) and allow me to do so internationally.
I'd say just get a US Bank account from Charles Schwab the next time you're over there. I got mine 4 years ago without having a SSN or a work visa, just using my passport. I guess this is just possible if you do it "in branch" though.
Super easy to get started, and very low fees.
If I could remotely trigger a large international wire transfer from my bank, I wouldn't need a 3rd party service.
Living abroad, requests to transfer money are usually met with "just step into a branch and we'll take care of that". But my nearest branch is 2,000 miles away and I'm not planning to step anywhere near there in the next year or so.
The best I've gotten is "then just overnight us a notarized letter", which works, except for the part where Notaries are mostly a US invention so the few existing overseas ones will happily charge you $150 to put their stamp on the document. ... which the bank will then find some tiny flaw with (when the FedEx package trickles through their mailroom a week later) that can be corrected by simply overnighting a new notarized letter.
It's infuriating.
It works by issuing local payments, which are much cheaper. You make a local payment to TransferGo account in your country. In turn they use their foreign bank account to make local payment to your recipient.
The fees are essentially max($2.50, 0.01%) but there's some restrictions (min $10k deposit, $10 monthly fee)
Unfortunately now you can't even deposit into European bank accounts that are related to Bitcoin... but anyway it's a really cheap way of sending money, not all currencies are available yet though (no CAD) but keep an eye out.
It appears cheaper than both PayPal and my bank, however it is up to you if the savings is worth the hassle of setting it up. Once it is set up you transfer money to their local bank account (within your origin country), and then at the destination country they deliver it via bank transfer from an account there, so you need a normal bank account in both source and destination (i.e. no Western Union style use).
I believe HSBC also offer free intercountry account transfers as long as you own both accounts.
Now I have to use XE Trade, and never really know how long a transfer will take or what exchange rate it will settle on.
With the below link you will get your first transfer for FREE:
Additionally, if you ever travel and spend money in the US, you can spend in US currency, again avoiding exchange rates.
[1]: http://www.bmo.com/home/personal/banking/bank-accounts/us-do...
I would look at the RBC USD accounts if I were you.
There's a huge gap between the regulated dollar rate and the street price, so the loss is negligible (I used to just extract the money from an ATM)
Cheaper (lower fees + better exchange rate) than the bank, I can do it all online.
I've blogged about our experience here: http://blog.preinheimer.com/index.php?/archives/418-Paying-a...
If they had a US account you could do with ACH, life would be easy. But they don't.
I'm not 100% sure on the fees but they are not even close to 0.3% for forex. It's pretty much around $2 for most trades (their example covers: USD 50,000 daily volume for EUR = USD 2.00). Here are the details of the fees: https://www.interactivebrokers.com/en/index.php?f=commission...
I think the reason IB charges are so low is because they deal with very large customers (banks, trading houses, etc.).
Based on some googling, there are secondary fees to consider such as minimum monthly fees and wire transfer fees, which might make it more or less attractive than alternatives depending on conversion amounts and regularity of transactions.
You mentioned that you use Interactive Brokers. Are you a Canadian citizen living in Canada that transfers money into and out of an Interactive Brokers account, exchanging USD and CAD?
My email address is in my profile if you want to get in touch with more questions :)
After some further research, it does seem like Interactive Brokers is a good option for the OP. For posterity, here are two blog posts by a Canadian describing how he uses Interactive Brokers: http://blog.plsoucy.com/2012/11/best-way-to-convert-usd-to-c... and http://blog.plsoucy.com/2013/03/converting-usd-cad-interacti...