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 🙂

Banking in Spain

Don’t stress about banking in Spain, it’s the one thing I can say they are very efficient at. Unlike in the US, there are no wait times on deposits nor transfers – they are instantaneous. The most popular bank in Catalunya is Caixa Catalunya, after which is probably Santander. All you need is a passport to open an account if you are a foreigner. You’ll pay a service fee of 5 Euro a month. If you have a NIE, the fee is waived. Online banking is great, though not necessarily well translated if you choose their English version, but easy enough to navigate and again, transfers to others or to pay bills are instant-no waiting.

Cheap method to transfer money between the US and Spain

If you don’t have an income in Spain, or need to occasionally transfer money to your Spanish account, transferring money from your US bank account to your new Spanish account will cost you about 40-45 dollars a pop. That’s because you have to buy a bank wire. There are not too many alternatives that cost any less, however I DID find one way that takes a lot longer but is far cheaper. If you plan ahead this will work for you.

You will need two Paypal accounts. To open a Paypal account you need a unique email, so use your current email and link it to your US account, and then just create a new gmail/yahoo/hotmail account to set up another Paypal account linked to your Spanish bank account. Once you get them validated, you can gift yourself money from your US Paypal to your Spanish Paypal.

Be sure to mark the transfer as a GIFT, otherwise you will pay Paypal’s high commission rates.

EDIT: As of November 2014, I have stopped using Paypal for my transfers because of their conversion fees. I now recommend TransferWise.  The cost to send from US banks is lower than any bank. Read more about it here.