Hi! Today I would like to delve into a subject that will certainly be of interest to people like me, who work in Great Britain and regularly share their earnings with the family in their beloved homeland. Of course, everybody will find it helpful, no matter where he or she works and what currency they are paid in. What is it all about?
About monstrous, in my opinion, commissions and fees charged by banks on currency transfers. I was always hugely annoyed by how much I paid, pretty much for nothing, to transfer money to my family in my country. For some time, however, I have been using TransferWise, in my opinion an exceptionally well-functioning portal, thanks to which money transfers from England to my parents (on the other side of the world :/) is no longer such a cumbersome duty. Would you like to know how to save money on such transfers? If so, keep reading!
I said a firm NO! to foreign currency transfers through banks…
… because, as I mentioned before, I was totally fed up with paying giant commissions. In my case a British bank was charging a flat fee of 20 pounds per transfer. It’s really a considerable amount when combined with each transfer, and if that wasn’t enough, the exchange rate itself for the transaction performed by the bank differed from the market rate as well. Even though the difference wasn’t very significant, with larger transfers at a thousand pound level it meant another dozen pounds or so, which I could spend on something more interesting…
I learned about TransferWise pretty much on accident, and initially didn’t find their offer especially appealing. Somehow I never trusted this kind of international money transfer systems. However, I started using it after some encouragement on the part of an acquaintance I met here, in England, who also transferred a part of his earnings to his family in their homeland.
I tried it once and you know what – you can take the banks’ offers and stick them on a shelf among the books. The service offers currency transfers practically at the market rate. What’s more, in my case of a thousand pound transfer the commission is just under five pounds!
Finally, after all my calculations, it turned out that this safe and convenient way allows to send money to my homeland almost 80% cheaper. Stay away from banks, just like I did, since, pardon my French, they milk you ruthlessly and unscrupulously. I still can’t forgive myself how much money I wasted during the year I transferred money through banks, yikes…
Good, but not for everything, or a short profile of TransferWise.
Unfortunately, all that glitters is not gold and I would like to emphasize right off the bat that you can’t use the system as an online currency exchange office, which is a real pity, although the portal still gets a huge thumbs-up from me for saving my money on transfers. What I mean is that the system won’t allow us to perform a simple currency exchange, or to realize transfers from one currency to another within one’s own accounts, heh.
The matter is somewhat complicated and it stems from a rather strange approach to reality, namely, the service completely ignores the option of having a foreign currency account in one’s own country. Let’s say, for example, that we live in Poland and we own a standard PLN account and a second account in British pounds.
For TransferWise this option is impossible because a British pound account may only be established in Great Britain. The service, then, won’t work for cheap currency exchange between accounts within one country, but believe me, for transfers between accounts in different countries it’s simply ideal.
How does TransferWise work?
Are you wondering how this service works? Everything is incredibly simple and, fortunately, does not require going through a ton of legalities, as is apparently the case in many other services of this kind. In order to transfer money, we obviously have to have an account set up on TransferWise, which luckily is free.
In addition, we’ll need, of course, our bank account number as well as the account number of the person we wish to send the money, including, naturally, all the information and the target country. What’s really great in my opinion is the complete absence of hidden fees. Banks have always irritated me in this respect.
Everything seems great, they operate fairly, but all fees are buried somewhere deep in the regulations printed on so many pages that they wouldn’t bring shame to the most respected writers the world has seen throughout its history… No point wasting my breath and time on searching for all those fees.
Already on the home page we immediately see a simple calculator which will tell us everything about the transfer. We select the source currency and enter the amount, and then choose the target country currency. We get a very nice calculation showing how much money our recipient will end up with after the exchange.
At the same time we also see TransferWise’s commission and the exchange rate that will be used in the process. What else would you need? The transfer itself is equally simple, just a few clicks, providing some more information and you can go grab your coffee (and pay for it with the money saved during the transfer.) At any moment we can monitor the status of our transfer, and the service itself provides a slew of guarantees in regards to the safety of our money.
I’ve mentioned the advantages, but does TransferWise have any disadvantages as well?
You do realize that nothing in this world is ideal, right? Well, of course TransferWise is not an ideal system but it’s pretty darn close. I think I’ve said plenty about the advantages already. So, in a short summary of my scribble I will mention the low commission charged by the portal itself, and also the fair exchange rates, simple registration process and really high security of the transfers, which is guaranteed by the system.
For some it will certainly be a disadvantage that TransferWise supports bank accounts only. Well, if our recipient does not have a bank account, we will not be able to transfer the money there, there is no option for any transfers. For now, the list of countries included in the service is not impressive but it should be sufficient for the typical directions of European employment.
Finally, it’s good to be aware of the fact that transferring money through the service may take slightly longer compared to regular bank transfers, especially in the case of exotic countries. I don’t think it’s a terrible disadvantage, though. We pay much less for the transfers, and if we are pressed for time we can make an exception and do a quick bank transfer with the corresponding fee, can’t we?
…ah, I almost forgot: TransferWise has a surprisingly good support, it’s an advantage I haven’t mentioned before. They respond to questions very quickly and provide such exhaustive answers that they really go beyond the scope of the question. I’m not joking 😉
Fees and required documents limited to a bare minimum
I have already mentioned that in order to set up an account you won’t need a ton of documents scanned and sent over for verification, right? What we need is to have in our head or somewhere on a piece of paper some basic info about ourselves (no, we won’t need to reveal the shoe number…) and some document to confirm our identity, like a passport or ID card. That’s it.
As for the fees, I don’t have much to say, either, they are really low and totally transparent. We only pay commission at as little as 0.5%. Yes, this really is it! Exchange rates are really close to their market values, so you won’t overpay here.
As an interesting fact I will also mention that TransferWise supports a recommendation system. If you bring in at least three new people who will transfer at least 200 pounds (or its equivalent in a different currency), you will receive a 50 pound bonus, which I think is an interesting option.
Time to finish and sum up – is it worthwhile?
I’m running out of time so I will do a quick recap. Is it worth taking advantage of? You know, if something works well and is safe and can be cheaper, does it make sense to fatten up the wallet of a bank which will not get any poorer if we don’t support it?
Although I’m not suggesting anything to anybody, I’m personally very happy about the fact that with each transfer so much remains in my pocket. I work hard for my money and senseless wasting it on bank commissions and transfer fees really pains me.
I will be glad to answer your questions, if you have any, of course 😉 Add some comments and don’t forget to share your experience concerning using this service. Take care!