Schwab or Forex? How should I decide?

January 26, 2018 1:19 PM

I'd like to transfer a large sum of money (~$40000) to the US from a UK current account. Is there an advantage to using a forex service such as XE over my bank, Charles Schwab, who is known to have competitive currency exchange rates?
posted by heterosoy to Work & Money (5 answers total)

The only reason I use Xe is that Bank of America charges US$50 freakin' dollars for a wire transfer and offers no cheaper options like ACH. If my bank were competitive on price I wouldn't go through the hassle of doing it via Xe and their third-party processors, but if I can save $47 I will.
posted by wnissen at 1:47 PM on January 26, 2018

I use XE for exactly the same reason. Wells Fargo wants $50 to do a wire transfer (even though I'm one of their "prime" customers), wheras XE will just put it into my client's bank account for a few bucks. I believe XE also has competitive rates, but I really don't know, because the $50 fee is a deal-breaker given the small amount I send.

This is easy to settle. Ask Schwab for their rate and administrative fees. Compare with XE. Make your decision.
posted by ubiquity at 2:48 PM on January 26, 2018

Response by poster: I'm going to compare on Monday (when Schwab's forex team is in the office) to get a quote, as you've recommended. But really, this sort of thing fluctuates frequently and I expect to be converting money regularly enough that it would be a hassle to shop around each time.

I've done a bit more research. Since Schwab doesn't charge a transaction fee, my question boils down to comparing the spread for Schwab versus forex. Once I started googling "spread," I learned that Schwab is apparently quite competitive in this category.
posted by heterosoy at 6:36 PM on January 26, 2018

I'm a Schwab customer but they could never beat the price I got from Transferwise. I used it for much smaller amounts though, so YMMV, but it's worth taking 30 seconds to check the rate + fees.
posted by caek at 8:16 PM on January 26, 2018

Transferwise is the cheapest transfer option I've found (I transfer between US-EU often), with XE being the second. Don't get bogged down with transfer fees, as you really need to compare the exchange rates being offered. You'll find that Transferwise will have the lowest of most options available.

There is a $10,000 per 24hr period if you do it straight from your bank account, or $50,000 limit with a wire transfer.
posted by wile e at 11:26 AM on January 30, 2018