If you have been reading this blog, you know that for six years I have been transferring money to myself from my US bank to my Spanish bank via two Paypal accounts. For those of you who don’t know, I freelance primarily in the US and Canada and am paid in US dollars. So I need to get money to my Spanish bank account without paying stupid amounts of money for wire transfers on top of currency conversion fees.
My solution was to use Paypal, as it was the easiest and cheapest solution I could find, though their currency conversion fees are not stellar. For example, the actual rate at the moment is $1 = €.81 (which is really good, you should be converting your currency NOW), but the Paypal rate for payments is €.77 and balance conversions is €.78. Which, if I send smaller amounts, isn’t horrible but if I send even $2000, the cost is about 50 dollars. Which is too much!
So, I found a new potential solution called TransferWise. I’m trying it out right now. The total cost to transfer and convert up to $1500 is a $15 dollar flat fee. For transfers up to $4999.99, the fee is 1% of the amount sent (so up to $50). Over that and the fee goes down to 0.7%. So, for a $6000 transfer, the fee would be 1% for the first $4999.9. Then for the additional $1000.01, the fee would be 0.7%. This means the cost would be $57 (50 + 7). But how much would a wire transfer cost for that amount? I think it would only be $45 dollars.
But…your first transfer is free if you sign up, so I think you can transfer ANY amount for free.
Let me know if any of you sign up and use this service, I will report back here if I find any hidden fees or problems. It might be a good solution for transferring smaller amounts (under $5000).
Update: I’ve used this service and found it to be cheaper than Paypal (due to TransferWise using the actual, current exchange rate) if you transfer small-ish amounts. I just transferred $1700 and it cost me nothing – because your first transfer is free. That transfer right there would have cost me close to 50 bucks! That right there was worth the sign up. I am going to keep using it amounts less than $3000 or so.
Update #2: If you sign up with this link, your first transfer is FREE! That’s like free money 🙂
January 9th, 2015 at 9:37 pm
I also get paid in US dollars. I opened a Schwab checking account and got an ATM card and take cash from the ATM at current conversion rates, no fees.
Also, use Capital One credit card for purchases – no fee there either.
February 17th, 2015 at 8:55 am
Living here, you do need to have a Spanish bank account as most memberships, utilities, rent, etc., require instant bank transfers every month – there is just no way around it. So in order to get money into that Spanish bank account, you’ll need to convert and transfer dollars to Euros.
February 28th, 2015 at 3:45 am
Hey, I think I might have a solution for this. So I’ve been in Spain for a few years now and have had a Bank of America checking account for like ever (just e-banking). So, BOA has various partner ATM’s abroad; I can’t remember them all but, in Europe, they include Barclay’s and Deutsche Bank which can be found in just about every Spanish city. My BOA account allows me to withdraw Euros from these various partner ATM’s, no fees, I’m not even sure if they charge conversion fees. But yeah, I think this could be a better alternative for you, you could just have your American money direct-deposited into a BOA account and then withdraw it directly as Euros from a partner ATM abroad before taking it straight to your Spanish bank. Let me know if this works for you!
March 11th, 2015 at 6:54 pm
This is very helpful. I’ve been going crazy trying to figure out how to transfer my annuities to Madrid.
Thanks.
March 13th, 2015 at 11:52 pm
I’ve done two transfers with TransferWise and found it the cheapest and fastest way to send money. It’s cheaper than PayPal and any bank wires.
Speaking of withdrawing money in Spain from an American account, even if you don’t pay ATM fees, I’m not sure you get an actual exchange rate, banks always add some percentage on top of the current conversion rate, whether it is wire transfers or ATM withdrawals. However, using an American credit card, you do get an exact actual exchange rate (not sure if it would be also the case with a debit card use). Unfortunately, in Spain you can’t use a credit card for all your needs, many payments, especially recurrent ones, can only be taken directly from your Spanish bank account, so you really need one.
March 17th, 2015 at 7:32 pm
Hi there, good information. I’ve heard that some Spanish Banks will not open an account for someone with a U.S. bank account because of the IRS’s need to know everything. Any truth to that ? Thank you.
March 19th, 2015 at 3:30 pm
The idea that Spanish employees would care about, much less even know of, the entity that is the IRS made me laugh. No. Anyone can open a ‘tourist’ bank account at La Caixa (I suspect at all the other bnks as well). It costs 5 euro a month to keep a tourist account.