Transfer Money Cheap and Hold Private & Company Currency Accounts
TransferWise is an international money transfer provider widely known for its fair exchange rates and low fees. Since its beginning in 2011, the company has seen massive growth, partly due to the fact that they offer the most currencies among all digital banks. As a matter of fact, the service is available in almost all countries and covers more than 1,000 country combinations across more than 50 currencies. Additionally, TransferWise is one of the few money transfer companies that offer the mid-market rate for exchanging currencies. Read more about TransferWise in this review.
|Founders:||Kristo Käärmann & Taavet Hinrikus|
|Costumers:||Over 8 Million users|
|Monthly volume:||Over 5 Billion in USD|
Office location in London
Table of Contents
What Is TransferWise and How Does It Work
TransferWise was founded in 2011 by the Estonian friends Taavet Hinrikus and Kristo Käärmann, who saw a lack of a simple workaround when it came to transferring money from one currency to another, and, therefore, they decided to launch TransferWise.
TransferWise is a platform for transferring money in one currency from one account to another account into another currency. The service is available in almost every country in the world (144 countries, to be exact), and out of these 144 countries, registered users can send money to more than 80 countries.
With TransferWise, users can open multi-currency accounts in which they can hold more than 50 different currencies and send money around the world much cheaper than what would have been the case with traditional banks. The TransferWise account comes with a debit MasterCard with which you can spend money wherever you are in the world at the mid-market exchange rate, also called the “real” exchange rate.
You can easily register on TransferWise by uploading a few ID documents for verification purposes. TransferWise is not a bank, but rather “addressers” of your existing electronic bank account.
TransferWise Pros & Cons
Sending and Receiving Money with TransferWise
In order to send money with TransferWise, you need to sign up. Creating an account can be done free of charge either online or through their app by providing your email address or your Google or Facebook account. For some currencies, or especially large transfers, TransferWise would have to verify your identity before proceeding, and this might take up to two banking days.
TransferWise has no limits for how much you can transfer, however, your private bank might have established a limited amount of money that you can send per day or transfer. The transfer limit might also be affected by the device you use for sending the money; sometimes mobile transfers are more limited than online transfers.
How fast it is to send and receive money with TransferWise varies depending on how you do it. Both sending and receiving money with TransferWise is instantaneous, whenever the transfer is carried out from one TransferWise account to another. If you are sending money to a person’s bank account (and not a TransferWise account), you should expect between one and three business days before the other party receives the money in his/her account.
Sending or requesting money with Transferwise is not free of charge. That said, the fees applied are very low. You can read more about it below under “TransferWise Fees and Transfer Costs”.
TransferWise Account Options
TransferWise Borderless Account
- UK – You get a British account number and sort code
- Poland – You get a Polish account
- Eurozone – You get an IBAN number with your own SWIFT/BIC details
- US – You get an account number and a routing number (ABA)
- Australia – You get an account number and a BSB code
- New Zealand – You get an account number
How to Fund your TransferWise Multi-Currency Account
Since the Transferwise account is not an actual bank account, you would have to fund it with money from your regular bank account. This can be done in various ways, and you can freely choose your preferred funding method from your private Borderless Account.
You can add money to your account in the following ways:
- Through a debit card or a credit card
- By making a bank transfer from another account
- By having someone else transferring money to your account
Note that TransferWise will reject transactions of currencies that are not the same as the bank details, so you should always make sure to fund, send and receive money in the currency of your TransferWise account.
How to Set Up Your Personal TransferWise Account
- Provide documents that verify your identity
- Select currency (you can set up balances in more than one currency)
- Add money to your account (using the above-mentioned funding methods)
TransferWise Business Account
- TransferWise business account integrates with the accounting software platform Xero
- The business account allows you easily to make multiple payments in one batch
- TransferWise’s open API enables automated payments and workflows
- Businesses can download monthly statements for all of the balances they hold
Overview of Transferwise Cards
The TransferWise card is a debit MasterCard, which means that you can only spend money that you have in your TransferWise account. In other words, you cannot make overdrafts.
Advantages of having a TransferWise debit card:
- The TransferWise card allows you to spend money in 50 countries
- You pay no annual fees for having the card at your disposal
- Cardholders save money on foreign transactions fees
- The fees for currency conversion are very low
- ATM withdrawals are free for up to 200 GBP/250 EUR every month all over the world
- Spendings in different currencies will automatically be converted
- You can get discounts on hotels when booking with the card
How Do I Get a TransferWise Debit Card
Currencies on TransferWise
- In your current account
- For exchanging money in the app
- For topping up your account
|Current account |
|Mobile app |
|Topping up |
|AUD, BGN, CAD, CHF, CZK, DKK, EUR, GBP, HRK, HUF, NOK, NZD, PLN, RON, SEK, SGD, TRY, USD||AED, ARS, AUD, BDT, BGN, CAD, CHF, CLP, CNY, CZK, DKK, EGP, EUR, GBP, GEL, HKD, HRK, HUF, IDR, ILS, INR, JPY, KES, LKR, MAD, MXN, NGN, NOK, NPR, NZD, PEN, PHP, PKR, PLN, RON, RUB, SEK, SGD, THB, TRY, UAH, USD, VND, ZAR||AUD, BGN, CAD, CHF, CZK, DKK, EUR, GBP, HRK, HUF, NOK, NZD, PLN, RON, SEK, SGD, TRY, USD|
TransferWise Fees and Transfer Costs
TransferWise is well-known for offering a fairly priced and reliable service. Below, the article will go through some of the fees associated (or not) with TransferWise’s services.
Account Opening and Maintenance Fee
It does not cost any fees to open a TransferWise account, nor does it cost anything per month or year to maintain the account and have the virtual bank account at your disposal. The only fee related to your account that you might encounter is a minor 0.2% fee when using some specific payment methods for adding money to your account.
Transferwise Card Fees
ATM withdrawals are free up to 200 GBP/250 EUR (per month). If you exceed those limits within a month, withdrawals will cost 2% of the total amount withdrawn. As long as you do not withdraw more than 200 GBP or 250 EUR, withdrawals are 100% free.
TransferWise does not offer free transfer; instead transferring money is subject to a flat fee which will depend on the currency transferred. The transfer fee consists of a fixed fee for sending the money as well as a fee for converting your money into another currency (if needed). In the table below, you will find an overview of TransferWise’s fixed transfer fees.
Transferwise Top-Up Fee
TransferWise charges a small fee for topping up money in your account of between 0 and 0.2%. Some countries, however, are charged more, for instance Hungary, for whom the top-up fee is 0.4%.
TransferWise Exchange Rates
TransferWise is dedicated to providing a true mid-market exchange rate which is the best exchange rate you can get. The mid-market rate, also called the real or true exchange rate, implies a zero markup compared to many traditional banks who offer customers a rather high above-market rate which ultimately results in customers ending up paying more (up to eight times more) for exchanging currencies due to hidden fees.
It is not unusual that big banks markup an exchange rate of more than 2% and sometimes close to 3%. In comparison, the fee charged by TransferWise will rarely exceed 1% and in most cases, the exchange rates would lie between 0.35% and 2.00% depending on the currency you are exchanging and the country you are trying to send money to.
In the table below, you can get an overview of the exchange rates for transferring money between some of the most popular currencies.
|GBP||AUD, EUR, USD||0.37%|
Transferwise App for Mobile
Comparison of TransferWise
In this section, we will compare TransferWise to two other popular money transfer services, Revolut and PayPal, with the purpose of making it easier for you to decide which one of the companies is the most ideal company for you, considering your specific situation.
TransferWise vs. Revolut
|Available in Asia||Yes||No|
|Currencies to be hold||+50||+20|
|Receiving money||GBP, EUR CHF, USD||GBP, EUR, CHF|
|How to access||Online + app||Only app|
|Account types||Standard||Standard, Premium, Metal|
TransferWise vs. PayPal
PayPal is one of the most well-known money transfer companies in the market and has been in the game since 1998. The biggest advantage of PayPal is in fact a clear result of their many years in the business: A lot of people have a PayPal account, which makes it less of a hassle to send and receive money.
For most people out there, however, the best money transfer service is not necessarily the most known, but rather the cheapest, and, in that case, TransferWise beats PayPal by a mile or even more. Why? Because TransferWise uses the mid-market rate when it comes to exchange rates which basically means that it does not get much cheaper.
To compare, PayPal explains that they use the banks’ wholesale rate on top of which they add another 2.5-4%. This essentially means that transferring money between currencies with PayPal might even be more costly than transferring money from one currency to another with your bank.
How Safe Is TransferWise?
More than five million people worldwide have trusted TransferWise with their money. Consequently, TransferWise moves more than four billion pounds around the world on a monthly basis, and when doing so, the safety and security of your money are prioritized as least as much as providing low and fair exchange rates. Therefore, they always aim at fulfilling rigorous regulatory standards in the UK, Europe, and the US as well as any other country they operate in.
Even though TransferWise is not a bank, it is an Authorised Electronic Money Institution regulated by the Financial Conduct Authority (FCA) in the UK and registered with the Financial Crimes Enforcement Network (FinCEN) in the US.
TransferWise is required by law to protect users’ money by storing it in an account in a low-risk financial institution, which, in the case of the UK, is Barclays and, in the case of the US, either the Community and Federal Savings Bank (CFSB), Cross River Bank (CRB), or Wells Fargo. These accounts are reserved for customers’ money and, in this sense, the money in these accounts is kept separate from the money used to run the business.
In the unlikely event that TransferWise would go bust, they will make sure that your money is fully refunded from the accounts in the banks holding your funds. However, if the underlying financial institution becomes insolvent, your money is not protected by the Financial Services Compensation Scheme (FSCS) in the UK nor by the Federal Deposit Insurance Corporation (FDIC) in the US