TransferWise versus Interactive Brokers - thread?

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Marseille07
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Re: TransferWise versus Interactive Brokers - thread?

Post by Marseille07 »

rongos wrote: Thu Jan 07, 2021 5:57 am Something to think about.

Although Transferwise says it is slower, ACH pull seems to be safer than ACH push.

There have been numerous stories on these forums of ACH pushes getting lost, and the bank you pushed from won't go any further than to say "we sent the money, there's nothing more we can do, call the other bank", and then the other bank says "we never got it, there's nothing more we can do." This would be a nightmare for a large transfer.

On the other hand, if you pull the money, the pulling bank is more responsible to research a lost transfer.
How often does this happen? I don't think I've run into one before but it's possible I didn't notice.
Hockey Monkey
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Re: TransferWise versus Interactive Brokers - thread?

Post by Hockey Monkey »

German Expat wrote: Thu Jan 07, 2021 10:42 am
rongos wrote: Thu Jan 07, 2021 5:57 am Something to think about.

Although Transferwise says it is slower, ACH pull seems to be safer than ACH push.

There have been numerous stories on these forums of ACH pushes getting lost, and the bank you pushed from won't go any further than to say "we sent the money, there's nothing more we can do, call the other bank", and then the other bank says "we never got it, there's nothing more we can do." This would be a nightmare for a large transfer.

On the other hand, if you pull the money, the pulling bank is more responsible to research a lost transfer.
The problem on a pull is not the speed to get the money into the account but the very long holds (44 days) before you can transfer it to a different account. So in the use case here to use it instead of transferwise to get the best exchange rate sending money to other countries your money gets stuck a long time.
Does the 44 day different account limit apply if there was a currency conversion in between and the withdrawal is not to a US account?

Eg transfer in USD from a US account, convert to AUD and the withdraw to an Australian account
rchmx1
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Re: TransferWise versus Interactive Brokers - thread?

Post by rchmx1 »

All these concerns about pushes and pulls, what I would recommend for people that have the option is to use the bill pay feature from their originating bank. That has always posted to my IB account the same day that I set the bill pay to occur from my bank account, and if needs be I can make a currency conversion and withdraw to my foreign bank account the same day. If I initiate the transfer early enough in the day, the money hits my foreign bank account the same day as well, which is pretty great. I used Transferwise monthly for years before learning about this aspect of IB and creating an account, and it's pretty great saving around $15 a month.
moneybags
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Re: TransferWise versus Interactive Brokers - thread?

Post by moneybags »

Can someone help me understand the Interactive Broker fees? Are there any fees for transferring funds in (USD) and out (EUR)? Are there any monthly account fees and/or balance minimums? I heard people report they were charged for a data fee that they had no idea about. I understand there is a 0.2bps commission fee for the currency conversion. What else?

My use case is that I will need to convert USD to EUR and send approximately 400K EUR to a European bank account. I think I understand the fees for TransferWise ($7.50 USD for wire transfer in, quoted fee when converting, and then 0.28 EUR fee to transfer out) but I don't have a good handle on the Interactive Brokers fee.

Thanks
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whodidntante
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Re: TransferWise versus Interactive Brokers - thread?

Post by whodidntante »

rchmx1 wrote: Sun Feb 14, 2021 11:43 am All these concerns about pushes and pulls, what I would recommend for people that have the option is to use the bill pay feature from their originating bank. That has always posted to my IB account the same day that I set the bill pay to occur from my bank account
Same here.
rchmx1
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Re: TransferWise versus Interactive Brokers - thread?

Post by rchmx1 »

moneybags wrote: Sun Feb 14, 2021 8:41 pm Can someone help me understand the Interactive Broker fees? Are there any fees for transferring funds in (USD) and out (EUR)? Are there any monthly account fees and/or balance minimums? I heard people report they were charged for a data fee that they had no idea about. I understand there is a 0.2bps commission fee for the currency conversion. What else?

My use case is that I will need to convert USD to EUR and send approximately 400K EUR to a European bank account. I think I understand the fees for TransferWise ($7.50 USD for wire transfer in, quoted fee when converting, and then 0.28 EUR fee to transfer out) but I don't have a good handle on the Interactive Brokers fee.

Thanks
I can only speak to IB's Lite account, which is only available to US residents (or at least people with a US address they can use). IDK if things are different with an international account, but I imagine the differences would be negligible, if they exist. There is no monthly fee with an IB Lite account, nor account minimum fee etc. With IB you get one free withdrawal a month, then each subsequent withdrawal comes with a fee, which depends on what kind of withdrawal you're making. For instance, the second USD to USD withdrawal is $1, while a second USD to MX Pesos withdrawal is 100 pesos, about the equivalent of $5. Something that is a little annoying about IB's setup is that, say I was making a second in a month USD-MX conversion and withdrawal of $500 and so 10,000 pesos, and so would know that I would be incurring a 100 peso transfer fee. My assumption would be that they would deduct the 100p from the amount I entered to transfer, so that the transfer would end up as 9,900p into my MX account. Instead, they send the full 10,000p you entered, and leave you with a negative 100p balance. It's not a bit deal, but requires a bit more manual oversight on your part.

Their conversion fee structure can be found here:

https://www.interactivebrokers.com/en/i ... =1590&p=fx

but I haven't been charged any other fees. Checking TW's site for the conversion you mentioned, you should save over $700 by using IB on a ~$500k USD to EUR transfer.
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Re: TransferWise versus Interactive Brokers - thread?

Post by AlohaJoe »

moneybags wrote: Sun Feb 14, 2021 8:41 pm Can someone help me understand the Interactive Broker fees?
You can Google and find the answers to all of these. Just type "interactive brokers fees". The first link will (probably) take you this page

https://www.interactivebrokers.com/en/index.php?f=1590

Click Pricing and read the various pages. The data fee is also listed right there under "Market Data". A snapshot of market data costs about $0.03 and you get $1 of snapshots free a month (i.e. about 30). I've never been charged a fee for market data in 5 years of using Interactive Brokers since I never need 30+ snapshots a month. (I'm not sure why someone during currency conversion needs a snapshot of market data anyway....)
Marseille07
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Re: TransferWise versus Interactive Brokers - thread?

Post by Marseille07 »

HawkeyePierce wrote: Wed Jun 24, 2020 12:54 am Transferwise is also built for transferring money to other people. My understanding of IBKR is that’s not the case over there.

They also provide a multi-currency debit card.
Does this work? https://www.interactivebrokers.com/en/index.php?f=26451

I'm not sure if it is a multi-currency debit card though.
Marseille07
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Re: TransferWise versus Interactive Brokers - thread?

Post by Marseille07 »

Just applied for an IBKR debit card myself, figured it wouldn't hurt even if it doesn't work multi-currency abroad.
Hockey Monkey
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Re: TransferWise versus Interactive Brokers - thread?

Post by Hockey Monkey »

IBKR generally require the destination account to be in the same name. There are limited instances where third party withdrawals are permitted.

From https://ibkr.info/tag/withdrawals

After a due diligence review, IBKR may allow withdrawals to a third party for purposes like:
• Withdrawal for purchase of a home or mortgage payoff
• Withdrawal to a spouse, parent, sibling, or child of source account holder
• Withdrawal to an account held by one of the accountholders of a joint account or vice versa.
• Withdrawal from trust account to a beneficiary
• Payment of certain account expenses
• Tax payments

Effective August 1, 2020, IBKR will generally not approve the following types of third-party withdrawals:
• Private investments
• Repayment of loans
• Withdrawals to companies owned by the accountholder
• Payment for purchase of goods or services
• Withdrawals to individuals other than spouse, parent, sibling or child of account holder

Also third party withdrawals appear to be limited to IBKR accounts in the US, Canada and the UK https://www.interactivebrokers.com.au/e ... 30&p=cash1

As a result, I use IBKR for FX in combination with a Wise account for the actual transfer in my own name when doing US transfers to third parties.
Marseille07
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Re: TransferWise versus Interactive Brokers - thread?

Post by Marseille07 »

Has anyone used IBKR's ATM card abroad?

I'm curious to learn if I need to have converted USD to EUR (or anything else) beforehand, or they can convert USD at the time of withdrawal using the exchange rate at that point.

(or if withdrawing EUR is possible at all, which it might not).
Marseille07
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Re: TransferWise versus Interactive Brokers - thread?

Post by Marseille07 »

Converting USD to something else turned out to be an expensive experiment, as I lost 20% of the value in comms. I'll have to evaluate this option carefully next time.
tomsense76
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Re: TransferWise versus Interactive Brokers - thread?

Post by tomsense76 »

Marseille07 wrote: Fri May 07, 2021 1:20 pm Has anyone used IBKR's ATM card abroad?

I'm curious to learn if I need to have converted USD to EUR (or anything else) beforehand, or they can convert USD at the time of withdrawal using the exchange rate at that point.

(or if withdrawing EUR is possible at all, which it might not).
Am curious as well. Don't have IBKR setup yet, but plan to do so in the next month or so.

Did some traveling before the pandemic and may resume after. Already have Schwab and setup Fidelity recently as a back-up. Though having a third option through IBKR would be nice.

That said, I did see IBKR charges $0.50 for ATM transactions (inside and outside the US) and didn't see anything about ATM fee reimbursement. No currency conversion fees though and no fees on transactions (so maybe cash back would work?).

Would be a little reticent to use as a default given the risk of someone snatching it and running up margin for example. Curious if it is easy to lock to protect against this kind of thing. Also wondering what kind of customer service one would get if this happened.
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Marseille07
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Re: TransferWise versus Interactive Brokers - thread?

Post by Marseille07 »

tomsense76 wrote: Tue May 11, 2021 7:01 pm
Marseille07 wrote: Fri May 07, 2021 1:20 pm Has anyone used IBKR's ATM card abroad?

I'm curious to learn if I need to have converted USD to EUR (or anything else) beforehand, or they can convert USD at the time of withdrawal using the exchange rate at that point.

(or if withdrawing EUR is possible at all, which it might not).
Am curious as well. Don't have IBKR setup yet, but plan to do so in the next month or so.

Did some traveling before the pandemic and may resume after. Already have Schwab and setup Fidelity recently as a back-up. Though having a third option through IBKR would be nice.

That said, I did see IBKR charges $0.50 for ATM transactions (inside and outside the US) and didn't see anything about ATM fee reimbursement. No currency conversion fees though and no fees on transactions (so maybe cash back would work?).

Would be a little reticent to use as a default given the risk of someone snatching it and running up margin for example. Curious if it is easy to lock to protect against this kind of thing. Also wondering what kind of customer service one would get if this happened.
I think we have to convert the currencies before hitting the ATM; but FOREX is open almost all day so this shouldn't be an issue.

If this works, we no longer have to get ripped off at the airport.
Marseille07
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Re: TransferWise versus Interactive Brokers - thread?

Post by Marseille07 »

I hit an Allpoint ATM this morning. While Ally's debit card showed balance, IBKR's debit card didn't show any; tried the "all accounts" option. Nothing.

While I don't have a whole lot in IBKR (less than $100), I know the balance isn't zero...

EDIT: It might be because of the 4-day hold or whatever: "You may not withdraw your funds until 2021-05-14"
This is actually a concern when traveling abroad, because you would have had to deposit & convert the money few days prior, not the day of or a day prior.
tomsense76
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Re: TransferWise versus Interactive Brokers - thread?

Post by tomsense76 »

Marseille07 wrote: Tue May 11, 2021 7:25 pm
tomsense76 wrote: Tue May 11, 2021 7:01 pm
Marseille07 wrote: Fri May 07, 2021 1:20 pm Has anyone used IBKR's ATM card abroad?

I'm curious to learn if I need to have converted USD to EUR (or anything else) beforehand, or they can convert USD at the time of withdrawal using the exchange rate at that point.

(or if withdrawing EUR is possible at all, which it might not).
Am curious as well. Don't have IBKR setup yet, but plan to do so in the next month or so.

Did some traveling before the pandemic and may resume after. Already have Schwab and setup Fidelity recently as a back-up. Though having a third option through IBKR would be nice.

That said, I did see IBKR charges $0.50 for ATM transactions (inside and outside the US) and didn't see anything about ATM fee reimbursement. No currency conversion fees though and no fees on transactions (so maybe cash back would work?).

Would be a little reticent to use as a default given the risk of someone snatching it and running up margin for example. Curious if it is easy to lock to protect against this kind of thing. Also wondering what kind of customer service one would get if this happened.
I think we have to convert the currencies before hitting the ATM; but FOREX is open almost all day so this shouldn't be an issue.

If this works, we no longer have to get ripped off at the airport.
Interesting. At least with Schwab they did the conversion whenever one went to the ATM or made a purchase for that matter.

Sometimes the ATM or card reader would offer to do the conversion (IOW charge in USD instead of local currency). However that's usually a bad idea as there are expensive fees that get tacked on. So one should generally decline this.

That said, I am curious about IBKR's ability to use FOREX to load up on currency in advance. It would be nice to convert some currency in advance of a trip and then just draw down the converted currency (instead of exchanging on-demand).

Have unfortunately exchanged currency at the airport and agree its a rip off.

Some B&M banks will let you order currency in advance that can be picked up at the branch or mailed to you, which I've done for more recent trips. This has been pretty handy.
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Marseille07
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Re: TransferWise versus Interactive Brokers - thread?

Post by Marseille07 »

tomsense76 wrote: Wed May 12, 2021 4:25 pm Interesting. At least with Schwab they did the conversion whenever one went to the ATM or made a purchase for that matter.

Sometimes the ATM or card reader would offer to do the conversion (IOW charge in USD instead of local currency). However that's usually a bad idea as there are expensive fees that get tacked on. So one should generally decline this.

That said, I am curious about IBKR's ability to use FOREX to load up on currency in advance. It would be nice to convert some currency in advance of a trip and then just draw down the converted currency (instead of exchanging on-demand).

Have unfortunately exchanged currency at the airport and agree its a rip off.

Some B&M banks will let you order currency in advance that can be picked up at the branch or mailed to you, which I've done for more recent trips. This has been pretty handy.
I see, thanks. I wasn't aware conversion on-demand was a bad idea even if offered.

IBKR account is already multi-currency, you just "trade" and select "convert currencies" or w/e to exchange. It's $2 per transaction.

I think my trip to the ATM nearby was too early, as they seem to place a 4-day hold on the money deposited into IBKR. I was able to convert but not withdraw.
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Re: TransferWise versus Interactive Brokers - thread?

Post by tomsense76 »

Marseille07 wrote: Wed May 12, 2021 4:34 pm I see, thanks. I wasn't aware conversion on-demand was a bad idea even if offered.
Just to clarify this is when the ATM or card reader offers to do the conversion for you. Saying no should still allow Schwab, IBKR, or whoever to do the conversion on the backend on-demand, which should be fine.
Marseille07 wrote: Wed May 12, 2021 4:34 pm IBKR account is already multi-currency, you just "trade" and select "convert currencies" or w/e to exchange. It's $2 per transaction.
Right. Is there something special needed to draw down that converted money with the ATM card?
Marseille07 wrote: Wed May 12, 2021 4:34 pm I think my trip to the ATM nearby was too early, as they seem to place a 4-day hold on the money deposited into IBKR. I was able to convert but not withdraw.
Good to know about the 4-day hold. Curious to hear what else you learn :D
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Marseille07
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Re: TransferWise versus Interactive Brokers - thread?

Post by Marseille07 »

tomsense76 wrote: Wed May 12, 2021 4:39 pm
Marseille07 wrote: Wed May 12, 2021 4:34 pm I see, thanks. I wasn't aware conversion on-demand was a bad idea even if offered.
Just to clarify this is when the ATM or card reader offers to do the conversion for you. Saying no should still allow Schwab, IBKR, or whoever to do the conversion on the backend on-demand, which should be fine.
Marseille07 wrote: Wed May 12, 2021 4:34 pm IBKR account is already multi-currency, you just "trade" and select "convert currencies" or w/e to exchange. It's $2 per transaction.
Right. Is there something special needed to draw down that converted money with the ATM card?
Marseille07 wrote: Wed May 12, 2021 4:34 pm I think my trip to the ATM nearby was too early, as they seem to place a 4-day hold on the money deposited into IBKR. I was able to convert but not withdraw.
Good to know about the 4-day hold. Curious to hear what else you learn :D
Yeah, I'm planning to make another trip after the 4-day hold ends. Will keep this thread posted. Hopefully the 4-day hold *was* the issue of ATM not showing balance though. It is my guess at this point; if not, something else is broken.

Also, the 4-day hold is if you ACH push your money into IBKR. If you pull, it's a 44-day hold.
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Re: TransferWise versus Interactive Brokers - thread?

Post by midareff »

We have been using TW with no issues. We have TW pull the funds from Ally into the TW Bank and then send overseas an hour later. Excellent exchange rate too.
tomsense76
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Re: TransferWise versus Interactive Brokers - thread?

Post by tomsense76 »

Marseille07 wrote: Wed May 12, 2021 4:44 pm Yeah, I'm planning to make another trip after the 4-day hold ends. Will keep this thread posted. Hopefully the 4-day hold *was* the issue of ATM not showing balance though. It is my guess at this point; if not, something else is broken.
Nice! Safe travels :beer Got the 2nd shot recently, so am looking forward to traveling again soon! :D

Yeah it's a good question. Am trying to remember if I ever checked the balance with the Schwab card abroad. Usually just did a bit of mental accounting to keep track.
Marseille07 wrote: Wed May 12, 2021 4:44 pm Also, the 4-day hold is if you ACH push your money into IBKR. If you pull, it's a 44-day hold.
Wow! Good to know about the 44-day hold.

I think transfer to Schwab took 4-days if pulled and 1-day if pushed.
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Marseille07
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Re: TransferWise versus Interactive Brokers - thread?

Post by Marseille07 »

tomsense76 wrote: Wed May 12, 2021 4:56 pm
Marseille07 wrote: Wed May 12, 2021 4:44 pm Yeah, I'm planning to make another trip after the 4-day hold ends. Will keep this thread posted. Hopefully the 4-day hold *was* the issue of ATM not showing balance though. It is my guess at this point; if not, something else is broken.
Nice! Safe travels :beer Got the 2nd shot recently, so am looking forward to traveling again soon! :D

Yeah it's a good question. Am trying to remember if I ever checked the balance with the Schwab card abroad. Usually just did a bit of mental accounting to keep track.
Marseille07 wrote: Wed May 12, 2021 4:44 pm Also, the 4-day hold is if you ACH push your money into IBKR. If you pull, it's a 44-day hold.
Wow! Good to know about the 44-day hold.

I think transfer to Schwab took 4-days if pulled and 1-day if pushed.
Oh, I didn't mean to confuse you. This is just a trip to the ATM near my place (US). I purposely converted USD in my IBKR account just to see how ATM's menu would look like, holding USD and another currency. But this experiment won't prove that I can actually withdraw another currency abroad, this is more like a dry-run and as you see I'm already discovering a potential issue with the 4-day hold :happy

The 44-day thing was discussed earlier on this thread, I recommend to go through it. Lots of good info here.
Marseille07
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Re: TransferWise versus Interactive Brokers - thread?

Post by Marseille07 »

According to this person, CMAs might not display the balance at the ATMs: viewtopic.php?p=6004086#p6004086

Since IBKR + debit card is technically a CMA (or so I think, anyway), this might explain why I couldn't view the balance 2 days ago, regardless of the 4-day hold.
Marseille07
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Re: TransferWise versus Interactive Brokers - thread?

Post by Marseille07 »

Just hit the ATM again, this time my IBKR card showed the balance but the combined sum shown in USD; I actually have 50% in USD and 50% in another currency. Not a big deal, but still some questions remain whether this multi-currency account works abroad.
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Re: TransferWise versus Interactive Brokers - thread?

Post by neurosphere »

midareff wrote: Wed May 12, 2021 4:55 pm We have been using TW with no issues. We have TW pull the funds from Ally into the TW Bank and then send overseas an hour later. Excellent exchange rate too.
Do you use TW to send yourself money, or to others?

I'm trying to learn in advance exactly what information about the (personal, non-business) recipient will be needed, apart from the usual bank account information. I tried to do a dummy transaction but it won't let me see subsequent steps without fully completing previous ones and I didn't want to risk submitting. I assume I'll need personal/home address of a recipient? Email? DOB? Not sure they have email (elderly small town recipients).

I'm thinking about buying a piece of land in Europe, currently owned by 3 individuals living in 3 different countries. I'd need to send each about $11,000. So I'm also trying to find out what my personal bank will ask of me, what TW will ask of me, and what I need to do in order to comply with US (and foreign) reporting regulations. I suspect Chase may ask me some questions too prior to letting these transactions go through?
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Re: TransferWise versus Interactive Brokers - thread?

Post by midareff »

neurosphere wrote: Sat May 22, 2021 3:18 pm
midareff wrote: Wed May 12, 2021 4:55 pm We have been using TW with no issues. We have TW pull the funds from Ally into the TW Bank and then send overseas an hour later. Excellent exchange rate too.
Do you use TW to send yourself money, or to others?

I'm trying to learn in advance exactly what information about the (personal, non-business) recipient will be needed, apart from the usual bank account information. I tried to do a dummy transaction but it won't let me see subsequent steps without fully completing previous ones and I didn't want to risk submitting. I assume I'll need personal/home address of a recipient? Email? DOB? Not sure they have email (elderly small town recipients).

I'm thinking about buying a piece of land in Europe, currently owned by 3 individuals living in 3 different countries. I'd need to send each about $11,000. So I'm also trying to find out what my personal bank will ask of me, what TW will ask of me, and what I need to do in order to comply with US (and foreign) reporting regulations. I suspect Chase may ask me some questions too prior to letting these transactions go through?
My/our experience is sending money from Vanguard to Ally to TW to Siam Commercial in Bangkok.
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