TransferWise

TRANSFERWISE Money Transfer: What You NEED to Know

TransferWise Money Transfer

transferwise money transfer

As an expat in any country, you will inevitably have to do an international money transfer. As TransferWise has gained ground in the international financial field, more expats are looking into whether or not it’s the best option for sending money abroad. From my experience, TransferWise has always been the cheapest, fastest, and safest service. This article explains what you need know about sending your money with a Transferwise money transfer.


Table of Contents:

  1. What Is TransferWise?
  2. Costs
  3. How TransferWise Works
  4. Speed 
  5. Safety 
  6. Currencies Supported 
  7. Frequently Asked Questions (FAQ)

1. What is TransferWise?

TransferWise is an international money transfer service. A TransferWise money transfer lets you send money between different countries and currencies at a very low cost. It’s the modern, affordable, and more transparent version of a bank transfer. 


2. Costs: Rates & Fees

TransferWise Money Transfer

How much does TransferWise cost?

The cost of any international money transfer service is composed of two things: the exchange rate and the transfer fee. TransferWise is exceptionally low-cost because they use the mid-market exchange rate and have minimal fees. You can also lock in an exchange rate for 24 to 48 hours, depending on the currency.  

TransferWise Exchange Rate

TransferWise uses the mid-market exchange rate. This is the fairest and cheapest exchange rate you can get for international money transfers.

In addition, TransferWise lets you secure an exchange rate for a specified amount of time. They refer to this as a guaranteed rate. TransferWise offers this guaranteed rate because the mid-market exchange rate is always changing. With a locked exchange rate, however, the recipient of your money receives the amount you initiated the transfer with. How long this guaranteed rate is available to you depends on the currencies you are transferring money between. As long as you pay for the transfer within the specified amount of time, you will get the guaranteed rate. 

If TransferWise does not receive your money within the specified period of time, the exchange rate is no longer guaranteed. Your money will still be transferred, but at the most current mid-market rate.

TransferWise Transfer Fees

TransferWise fees depend on two things: the amount of money you are transferring and the currencies you are transferring money between.

The fee is usually a percentage of the transfer amount. For small transfers, however, sometimes the fee is a very low, flat fee. The percentage you are charged also depends on the currencies you are using. 

TransferWise fees are very transparent. In other words, there are no hidden fees, and you can see how much TransferWise will charge you before you even have an account. You can simply go to their homepage, and use their calculator to see how much your transfer will cost. 

Bonus:


3. How TransferWise Works

TransferWise Money Transfer

How does TransferWise keep costs low?

TransferWise’s business model is very direct, and it is the reason they are able to keep their costs so low. 

TransferWise has bank accounts all around the world. This lets TransferWise use their own accounts to complete your transfers, and you don’t have to pay any hidden or overpriced bank fees. 

For example, let’s say you want to send 500 GBP to Germany. When you pay TransferWise 500 GBP, they deposit this money into their UK account. Then TransferWise converts GBP to EUR, and TransferWise’s German account sends the equivalent in euros to the recipient.

Since TransferWise uses their own bank accounts, the money never really crosses any boarders. It’s called a Peer to Peer service. That’s why their costs are so much lower than banks’ costs. 


4. Speed of TransferWise Money Transfers

TransferWise Money Transfer

How long does a transfer take?

The time it takes for your money to be transferred depends on 4 things:    

1. The countries you are transferring money between. 

Each country and currency has varying transfer times. How fast your recipient’s bank can process your money impacts how fast your transfer is completed. TransferWise states on their website, “Converting your money can take a maximum of 2 working days, but it’s very rare that it takes this long.In my experience, all of my transfers have only taken 1 business day.

2. Payment method. 

How you pay for your transfer also impacts how fast your transfer is completed. For example, card transfers usually go through immediately while bank transfers take more time. When you set up your transfer, you can see how much time each payment method will take.

With some currencies, such as GBP and EUR, there are different kinds of transfers. For instance, with money sent from GBP you can choose between Low cost transfers, Fast and easy transfers, and Advance transfers. How long your transfer takes depends on the kind of transfer you choose. Once you set up your transfer, you can see the estimated time of arrival.

3. The time you pay for the transfer. 

A TransferWise money transfer can only be completed when the banks are open. For example, if the recipient’s bank is closed because it’s after business hours or it’s a national holiday, the transfer will take a little longer. 

4. Security verifications.   

On occasion, your transfer might need to be reviewed. TransferWise may need to check your ID, where the money came from, or your address. They refer to this as process verification. Sometimes it makes transfers take a little longer, but it also keeps your money safe. 


5. Safety

TransferWise Money Transfer

Is TransferWise safe to use?

As with all banks and financial businesses, TransferWise is heavily regulated and must follow the laws put in place by regulatory boards across the world.

For example, it is regulated by Financial Crimes Enforcement Network (USA), Kanto Local Financial Bureau (Japan), Financial Conduct Authority (UK and EEA), Australian Securities and Investments Commission (Australia), and Authorité des Marchés Financiers (Canada).

In addition to outside regulations, TransferWise goes through their own process verification to prevent fraud and money laundering. TransferWise is a very safe method for transferring money internationally. 


6. TransferWise Money Transfer Currencies Supported

All Major Currencies

What currencies does TransferWise support?

TransferWise supports all major currencies. With a TransferWise money transfer, you can currently send money in 22 different currencies and receive money in 50 different currencies. 

TransferWise money transfers support 22 different currencies, including AUD, ARS, BRL, CAD, EUR, GBP, HKD, JPY and USD. You can find a list of all 22 currencies here

Currencies you can receive money in, but cannot use to send money, include AED, BDT, CLP, EGP, MAD, VND and ZAR. You can find a complete list of all the currencies you can receive money in here

Thai Baht is another example of a currency you can receive money in, but cannot use to send money. For instance, you can transfer USD to THB but you cannot transfer THB to USD. 


7. Frequently Asked Questions (FAQ)

What happens to the guaranteed rate if my transfer occurs on the weekend?

Since banks only process transfers Monday – Friday, TransferWise doesn’t consider Saturdays & Sundays as part of the time frame for the guaranteed rate. See the FAQ below for an example.

An Example of a guaranteed rate with transferWise

It’s Friday at 5:00pm. You want to send 1,000 GBP from your British bank account to your German (EUR) bank account. You go to the TransferWise website to begin the process. At 5:00pm Friday the mid-market rate is such that 1 GBP → 1.11483 EUR. You will see that the guaranteed rate for transfers from GBP to EUR is 24 hours.

Therefore, after you set up the transfer process, you have 24 hours for TransferWise to receive your payment to have the guaranteed rate of 1 GBP → 1.11483 EUR.

Because TransferWise doesn’t include the weekend when they determine the guaranteed rate, you have until 5:00pm on Monday to submit your payment, rather than 5:00pm on Saturday. 

If you submit your payment by 5:00pm on Monday, 1,000 GBP will be transferred in EUR using the mid-market, guaranteed rate from the previous Friday. If you submit your payment after 5:00pm on Monday, the mid-market rate will have very likely changed, and this would instead be the exchange rate used to complete your transfer. 

Exchange Rate Tip #1

Unlike TransferWise, banks will charge you an exchange rate that is higher than the true mid-market exchange rate and then keep the difference for themselves. You can find the mid-market rate on Google. For example, you can type into the Google search bar, “Current exchange rate between the US dollar and the Euro.” Google search results will tell you how many US dollars you can get for 1 Euro as of that time. This is the rate TransferWise uses, and is the best rate you can get for international money transfers. 

Exchange Rate Tip #2

Be cautious of any service claiming to have a ‘0% fee’ or ‘zero commission’. It’s never free to do an international money transfer. Any service making these claims is charging you a higher exchange rate than the true mid-market exchange rate. One reason I use TransferWise is because they always use the true rate. Therefore, TransferWise is completely transparent about how much money I’m paying in fees. 

More Info for Expats

After comparing many different international money transfer services, it’s clear that TransferWise is the most fair, fast, and secure option.

If you’re ready to make a transfer, don’t forget to use this link! You can transfer up to 500 GBP for free.

And – if you’d like to learn more about transferring money, our article, “International Money Transfers: Sending & Receiving Money Abroad,” has all the information you need!

Lastly, with the German bank N26 you can send money via TransferWise directly through the N26 app. Our article, “GERMAN BANKS: #1 Guide for Expats in Germany (2020),” has all the information you need on banking in Germany!


*Full Disclosure: Some of the links we use on this website are affiliate links. By using those links, you help keep our website free. There is no additional cost for you. We also want to note that we only recommend services we trust and that we would use ourselves.

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