International money transfers with Paypal - Germany

Taking money out of Germany the easy way

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thejarvii
@elfenstar

I looked into moving money via http://www.paypal.com/ b/c I'm interested in transfering money out of Germany and don't want to pay a ton in fees. It looks like they actually take a 2.5% cut above the exchange rate.

http://www.paypal.com/cgi-bin/webscr?cmd=_...ay-fees-outside

Maybe you can get around this by moving money into the paypal balance then moving it to the other bank account (2 steps instead of a direct transfer)???
Elfenstar
i transfer money from my german acct. to PayPal, then "withdraw" that money into my us account. cost me nothing. nada. nichts. nyet. have to do the two-step dance, but it is worth it.

i see the exchange rate when i transfer the money and there is a minimal deviation from what the bank would have give me if exchanged cash personally. a deviation of maybe 1c. seeing as i save €15 in fees if i transfered the money to the u.s. via S.W.I.F.T., then this is minimal sacrifice.

as far as i see it, this 2.5 % cut doesn't apply here. help me out jordigo!
Homer J.
@elfenstar

What is paypal? Where can I find it?
thejarvii
@elfenstar ... Great news!! Is there a trick to adding the German bank account? I go to add bank account and it only seems to want to let me add a US account (I already have my US account linked).

@Homer J ... paypal is a very popular payment method used in the US. It's main business is payments made as a result of eBay auctions. But many, like myself, use it for any other kind of payment between two people who both have paypal. (i.e. I owe my buddy 50 bucks). More info at www.paypal.com
Homer J.
@thejarvi

Thanks for that info. I never heard of it before. Is it secure? Would I be able to tranfer around €1,000 safely and without any fees?
Elfenstar
if you've got your PayPal account set up you add your u.s. account. then you transfer €'s (Überweisung) from your german bank to your paypal account. you do not add your german bank.

after logging on, go to the tab Add Funds.
then choose Transfer Funds From a German Bank Account

here it tells you exactly what you need to do. importnat is the Your Bank Transfer ID.

happy transfering.

safe? never had any problems yet. more dangeours walking down the street at night. i've transfered over €2,000 and paid no fees.
jordigo
the safest, cheapest and easiest way of transferring small amounts of money that I know of is just going to a cash machine with your EC card wherever you are

you can do the same with your visa card but they are likely to charge a higher fee for the actual withdrawal. some cards also charge a "foreign use" fee in addition to this (which may or may not be shown separately on your statement) which I have seen vary between 1% (bayerische landesbank) and 2.5% (morgan stanley in the UK)

** if I were to draw money with my German visa in another euro zone country --> just pay withdrawal fee
** if I were to draw money with my German visa in a non-euro zone country (e.g. the UK) --> pay withdrawal fee + foreign use fee
** if I were to draw money with my EC card in a non-euro zone country (e.g. the US) --> pay a withdrawal fee

this in addition to any widened bid-offer spread the bank may apply on the exchange rate

*** word of caution to elfenstar: paypal charge no *fee* as such but the bid-offer spread is murder!!! (in plain english: they shaft you on the exchange rate like it's going out of fashion...) comparing it to the cash exchange rate the bank would give you is not much good since they are expert shafters as well. get your exchange rates on http://www.bloomberg.com/markets/currencies/fxc.html

if you are transferring money to the UK (and this is new!!) you can also avoid charges by using the IBAN and BIC numbers (should be on your bank statement) and get charged only the spread on the exchange rate

hope this is of some use...
Elfenstar
hey jordi, at first i kept comparing exchange rates and was not ready to accept i wasn't getting what i would if i walked into the bank myself. but as i wrote, after once paying €17.50 to transfer less than a €1,000 to the u.s., I saw it was worth it.

until another possibility pops up, i'll keep doing it this way.
Renfield
@ elfenstar & Jordigo:

I think this topic is one that many ex-pats (EU & non-EU) are grappling with, so please indulge me in a few further questions.

Jordigo: You mentioned that an exchange (e.g., DE-US) made via paypal would be at a less favorable exchange rate. Do you have a sense as to how much of a differential paypal typically charges, or could you provide a link to the webpage that indicates this info? I'd like to get a sense of how much lower the exchange rate would be.

@elfenstar: You mentioned paying € 17,5 for a DE-US transfer of less than € 1.000,00. Is this a flat rate for any dollar amount transferred, or would the fees be higher/lower depending upon the amount?

@ the person who mentioned setting up accounts, in Citibank as they permit DE-US transfers w/o fee: Does the bank provide the transfer using that day's exchange rate, or is it a lower exchange rate? Also, what are the fees/account minimums/direct deposit requirements for this type of account in DE.

Many thanks,

Renfield
profundo
Scheise. Upon closer invesstigation this morning of my Citibank transfers...
I find that Citibank US takes out a cold $20 for each one. I did two in one month and got taken for $40. The statements have a paragraph about errors in transfers and I will be calling them tomorrow to check up on it.
Citibank De doesn't charge for their transfer service (they say). Someone is not telling the truth. 'Why would you charge for incoming transfer?' I ask.

Transfer rates given by Citibank De...
-------------------
Jan 23rd
1 EUR = 1,252300
Dec 16th
1 EUR = 1,212900
Dec 9th
1 EUR = 1,200100
-------------------
don't know how this compares with real life rates. Does anyone know for those dates?

As far as amounts, I have never bothered with anything smaller than 1000 Eur but have gone as high as 2K with no worries.
jordigo
re. paypal: just go to www.bloomberg.com for the "accurate" exchange rate (gives you a mid between market bid/offer at any given point in the day), you can then compare that to paypal. my perception is they take 2% to 3% of "margin"

re. citibank: you have to put a couple of thousand (€2,000 or so is the minimum I think - but not sure) on deposit with them but they pay decent rates of interest so it ought not be a problem. if you invest a similar amount in their funds or in a brokerage account that counts as well (so you don't have to keep it lying around as low-yielding cash if you are concerned about that)

to get max benefit what you would need to do is get a EUR and USD or GBP account with them in the same country (i.e. not a GBP account in UK and a EUR one in Germany) --> you can then make instant transfers between the 2 accounts and they show you the exchange rate online (at least this is the case in the UK where I have a GBP and EUR account with them). they give you 2 separate debit cards, one to access your EUR account and one to access your GBP account. you then withdraw fee-free at any Citibank branch or at low fees at any other ATM
profundo
Also, what are the fees/account minimums/direct deposit requirements for this type of account in DE.
I think I have a regular Girokonto with Citi.de Free if I keep over 2500 eur in it, but that's not going to happen so I get charged something small like 7 eur a month. (no interest gained for me because it is checking only) Thusly, I can transfer every last penny with no more consequenses. Savings account is included but I don't use it.

Automatic 1000 eur overdraft that only gets used (against interest) if I dip into it. No fee for that happening either.
Citi.de says that the transfers are free.
The exchange rate (see above)
Also Citi.de says that it could take up to two weeks to see the cash in the other account. It always takes two days or up to four on the weekend.
Renfield
Thanks Jordigo and profundo for your replies. In summary, here's my understanding so far:

In-bound (to DE) transfers: Consensus is to use your ATM/debit card to get EUR at the best exchange rate. Your bank may charge some ATM withdrawl fees, but will have to live with it.

Out-bound (from DE) transfers: Have to keep your eye on (i) transfer fees, and (ii) the exchange rate given in order to get the lowest reduction in funds deposited into the destination bank. Proposed solutions:

(1) Use IBAN/BIC numbers to reduce transfer fees and get the going exchange rate offered by your bank. Transfer fees are substantially reduced (or are they all together eliminated?). A remaining question is whether the transfer fee is fixed or varys depending upon transferred amount. The exchange rate is something I imagine would vary bank-to-bank, so this would be something to inquire about when choosing which bank to set up you deposit account. Does anyone have any general numbers here, i.e., no exchange rate margin, 1% margin?, etc.

(2) Set up account with CitiBank or another multinational company having offices in the countries you will transfer funds between. Word is still out if you can avoid transfer fees (at least in the case of Citibank), and if the transfer fee is flat rate or a percentage of the amount transferred. Exchange rate is again likely to be variable.

(3) Paypal. The link Thejarvil posted indicates that Paypal charges no transfer fee, but retains a 2.5% margin on the exchange rate. As an example, an exchange rate of €1,25/USD is reduced to €1,218/USD if a 2,5% margin is retained. Transferring € 1000 at the lower rate results in $ 1218 USD deposited, instead of $ 1250 USD, a reduction of $ 32 USD. This is the total reduction in funds from transferring money from bank to bank, and it may be the lowest reduction if the collective transfer fees and exchange rate margin your bank charges is more.

Some remaining questions for anyone who may have some insight:

Tranfer fees:
are they fixed or a percentage of amount transferred?

Citibank:
Will they waive fees for funds transferred between other country's offices?
What exchange rate margin (if any) does it charge account holders?

DE Banks:
What are typical exchange rate margins DE banks usually charge for transfers?
Which bank has the lowest exchange rate margin for transfers?

-Renfield
Elfenstar
wow, this is getting complex, but interesting! thanks for jordigo!

if i use my postbank account to transfer $1000 to the u.s, they charge me €1,50 for the transaction, plus SWIFT charges an additional €14,27. this does vary depending on amount. my u.s. bank (although I stipulated that my german acct. pays all fees), still charges me $10 (approx. €8). so i would then pay about €24 in fees so transfer $1000 to the u.s. i get the exchange rate of the day (or so i am told. will confirm again!). if i went into the bank and traded in cash, they would also charge me a 2.5% fee.

with paypal, i would pay no fees, but the loss in exchange is €32. mmm, maybe i should reconsider my choice!

(from postbank site to tranfser with SWIFT, fees in €):

bis 100,00 USD -,--
mehr als 100 USD bis 300 USD 2,85
mehr als 300 USD bis 500 USD 4,76
mehr als 500 USD bis 1.000 USD 6,66
mehr als 1.000 USD bis 5.000 USD 14,27
mehr als 5.000 USD 19,02

when in the u.s. i used my debit card to withdraw money from my german account. cost me €4 per transaction. my issue is getting my €'s to the u.s.

also to consider reinfeld is the bank you choose in germany. my account is free so long as i have €1000 entering my account each month. i have job, so no prob there. i pay no tranfser or debit costs (Überweisung or Lastschrift), my check card is free, my credit card free in the first year, each year thereafter is €35 + photo. online banking is free too.
jordigo
another idea of course is that if you have a trusted individual "on the other side" (e.g. a parent) you can have give them POA on your account and have them issued with a debit card on your german account. they can then take cash out and pay it into your US/UK/wherever account. has to be some trust there, obviously...
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