Wise saved me $500 in fees but Revolut saved me over $1,100! Here's how.

4/10/2022

If you move money between certain (most) EU countries and the US, then this blog is for you and could save you big bucks. Wise (formerly TransferWise) dominates the blogosphere and Facebook groups for expats as the standard for moving money cheaply. Wise is, deservedly, a wonderful and transparent service. However, it isn't the cheapest! I show you here how over a period of 4 years I have spent a grand total of $370 in fees using Revolut (or a combination of Revolut+Wise). If I had used Wise only, I would have spent $1,023. If I had used Bank->Bank ("direct") transfers it would have cost me a whopping $1,494. I've layed out the values transferred here, read on to learn how you can setup the Revolut+Wise method and start saving $$$.

2022 November UPDATE: Revolut changed their pricing structure in July 2022 to no longer offer 1 free international transfer per month. Revolut (Premium)+Wise combo continues to be the cheapest way to move money from the US -> Europe. However, on the return side Europe -> US I now use Atlantic Money. see the details at the new blog post here: https://theaspiringadult.com/blog/transfer-money-with-atlantic-money. The below blog has been updated to strike out the Europe->US transfers information as it is now much more expensive.

Why is the bank<->bank so expensive??

There are two factors at play in money movements:

Foreign exchange: selling EUR to buy USD (or vice versa) is where you find most hidden costs. The best price you can get is called "the real rate", "the Google rate", or "the Interbank rate". This simply means that the institution selling you the currency you are buying are not making any money on the "spread" (the difference between what they bought the currency at and what they sell it to you for). I contacted one of my US banks on 4 April 2022 to get a price quote for selling USD $30,000 and I received a quote back for EUR €27,216 which is ~ USD $117 less than what you would receive with Wise. This is a hidden cost of about 0.43%. Some banks can take a spread of up to 3-6%!

Transfer: geographical regions have an inner network that supports money movement that is usually free for transfers within that geography, in the same currency. So in the US, so long as you are moving USD through ACH then it will be free to another account within the US ACH network. In most EU countries, so long as you are moving EUR through SEPA then it will be free to another account within the EU SEPA network (which includes the UK).

Study this diagram before moving on to the "How":

Get your accounts setup first

Target Audience Note 1: this blog is written for people that have residence in an EU country that is a) in the SEPA region and b) eligible to open both a Wise and Revolut account. It is important that you have a local EU identification document and local EU address for this to work. There may be other ways to setup and I'd love to hear from people in the comments!

Target Audience Note 2: if you are sending less than EUR €1,000 per month then this setup is unnecessary for you. It's probably cheaper for you to use Wise without the Revolut layer, and pay the transfer fees on each transfer. This is your approximate breakeven point.

Ok LET'S GO!: The strategy here is to use multiple institutions, leveraging each institution for something that they offer for FREE! This means you are opening accounts with institutions that make their money in other ways and using the parts that you need for free.

2022 July UPDATE: the below graphic is out of date as Revolut no longer offers 1 free / mth SEPA->ACH transfer. See the blog linked above for using Atlantic Money to move money from EU->US.

A Premium account with Revolut costs EUR €85 annually, includes exchanging currencies(forex) is free (at the Interbank rate or "no spread").
For EU->US transfers you will use only Revolut. 2022 November UPDATE: this is out of date and we no longer recommend Revolut for EU->US transfers. Instead, Atlantic Money is the new solution for these transfers!
For US->EU transfers you will use a combination of Revolut+Wise.
Even though Wise does forex at the Interbank rate, you will not use Wise for this purpose. You will only use Revolut for buying/selling currencies (aka forex).
For the sake of simplicity we will use "EU" to mean any European country inside the SEPA region.
It is important to read this blog top to bottom before you start, otherwise you might make mistakes in setup that are complicated to undo.

For this to work, you will have 4 accounts at the end. We use ING in Germany and Charles Schwab in the US as examples which can you swap out for your preferred local banks.

US Setup Accounts (inside ACH region):
- Charles Schwab, routing/checking account number are US based. Account denominated in USD.
EU Setup Accounts (inside SEPA region):
- Wise, EU IBAN with a USD sub-account established, you will receive a US routing/checking account number for this account but it will be recognized as an EU based account inside SEPA.
- Revolut, EU (Lithuania) IBAN
- ING, EU (Germany) IBAN

Wise Setup

You first setup an online account. You only need a few pieces of information like name and email address. Once your account is online it allows you to do transfers and forex for a fee. You are not using this function. You will setup a Multi-Currency Account instead (next steps listed below).
Proceed with setting up your Multi-Currency Account full profile, your date of birth, full name, and local German address. It is important that all signs point to your German address. Using a US address will inadvertently give you a US Wise account. Do not setup a US Wise account.
You will sign up for a debit card. This is called setting up your Wise Multi-Currency Account. This costs EUR €6 to ship you the debit card. Once you verify your identity online you get your debit card details immediately (16 digits, expiration, CVV code). You will need these later to add to your Revolut account.
You will immediately also have access to "setup a US account". You do this by funding the account with USD from CS. For USD $200 this cost me USD $.61. Once you execute this funding of USD into Wise, you will have a US routing/checking account number associated to your account and people can send you USD. This account looks and feels like a US bank account though it is actually an EU based account inside the SEPA region.
This is the only time you will fund your account inside of Wise. Going forward, you will always go outside of Wise to CS and send money in. Do not wire money in from CS (wires cost money!), send it ACH using the ACH routing/checking account number now assigned to you by Wise.
IMPORTANT: You cannot setup 2 Wise accounts (one US and one EU). It is not allowed by Wise and they block it. Don't bother trying.
Outcome:

Cost setup: Wise debit card EUR €6.
Cost setup: Wise fee USD $.61 on first funding.
Cost ongoing: Transfer of USD $10,000 (or any amount) ACH from CS to Wise $0 (free!).

Revolut Setup

The free version of Revolut charges you for transfers/forex. You will setup a Premium account which is about EUR €85 for a year, comes with always unlimited free forex (at the Interbank rate during business trading hours).
I recommend using the Revolut phone app. You might be able to do this on the web browser but I cannot confirm (since I already have my account setup).
When you setup your Revolut account, again like Wise make sure to do it with a German phone number, with your German residence details, so that you get an EU IBAN inside the SEPA region. Using a US address will inadvertently give you a US Revolut account. Do not setup a US Revolut account.
IMPORTANT: You cannot setup 2 Revolut accounts (one US and one EU). It is not allowed by Revolut and they block it.

Case Study: Saving $$$ EU->US movements

[2022 July UPDATE: the below section is out of date as Revolut no longer offers 1 free / mth SEPA->ACH transfer. The savings achieved with this setup are fully gone and we no longer recommend Revolut for EU->US transfers. We have left the content in italics in case someone from Revolut sees this and gets our 1 free transfer re-instated!
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Facts of our example: each month you wish to send EUR €5,000 a month to the US as USD for your savings accounts. These transfers are easy and won't use Wise at all! Only Revolut:

Initiate a transfer from ING to your Revolut account. They are both EUR->EUR so you will not incur any forex fees or spread from either bank. Do a normal bank transfer using your Revolut IBAN, do not send a wire. Because you are sending a normal bank transfer, this is a SEPA->SEPA movement which is free.
Login to Revolut, during business trading hours do an exchange of your EUR €5,000 into USD. You will get the Interbank rate, which on 7 June 2021 means you now have USD $6,078.53 (see screenshots below). With your Revolut Premium you paid a flat EUR €85 for free forex (no spread no hidden fees during business trading hours).
Then you initiate a transfer inside your Revolut account to your CS account (pretty simple add your CS routing/checking account number). You receive USD $6,078.53 into CS. With Premium, it usually arrives next day but some people have reported that it arrives in a few hours.

Outcome:

Cost annual: Revolut Premium EUR €85.
- If you are transferring more than 1 time per month then you will pay a percentage fee for the transaction with a maximum USD $5 per transaction. So after your first free 1 for the month, don’t bother sending lots of small transactions.
Cost ongoing: Transfer of EUR from ING to Revolut $0 (free!).
Cost ongoing: Exchange from EUR to USD inside Revolut - Interbank rate $0 (free!).
Cost ongoing: Transfer of USD from Revolut to CS $0 (free!).

Wise-Only Comparison:

If you had sent the money from ING to CS using Wise (the free account, not the Multi-Currency Account) it would have cost you EUR €21.36 in fees and you would have received USD $6,053.28.
As you plan to send EUR €5,000 each month, your Revolut Premium account pays for itself quickly:
- Using Revolut: EUR €5,000 x 12 months - EUR €85 annual fee: (USD $6,078.53 * 12 - USD $103.31) = net receipt in CS of USD $72,839.05.
- Using Wise: EUR €5,000 x 12 months: (USD $6,053.28 * 12) = USD $72,639.36.
- You save almost USD $200 by using Revolut.

[end of 2022 July UPDATE note]

Case Study: Saving $$$ US->EU movements

Facts of our example: this is where things get tricky and where Wise comes in only for the first transfer, not for forex. You want to send USD $10,000 a month to Germany and exchange to EUR into your local German bank account.

Go to CS and send USD $10,000 to Wise. Do not send a wire from CS to Wise, send it ACH using the ACH routing/checking account number now assigned to you by Wise in your USD Multi-Currency Account. Do not login into Wise and "pull in" money from CS (you will charged for that). They are both USD->USD so you will not incur any forex fees or spread from either bank. Because you are sending an ACH transfer, this is a ACH->ACH movement which is free.
Open your Revolut app. Go to the USD screen. Add the details of your Wise debit card to the "Add Money" function. Revolut is not likely to limit how much you can add via the debit card, however your Wise account will limit you on a daily and monthly basis. My daily limit is GBP £10,000 and my monthly limit is GBP £30,000. Because your Wise and Revolut accounts are both inside the SEPA region, there is no fee for "loading money to your Revolut account" this way via your Wise debit card even though you are drawing from your Wise USD account details.
Still inside Revolut, exchange your USD $10,000 to EUR during business trading hours. I received EUR €8,222.03 in the screenshots below.
Send your EUR to your ING account (EUR->EUR). They are both EUR->EUR so you will not incur any forex fees or spread from either bank. Do a normal bank transfer using your ING IBAN, do not send a wire. Because you are sending a normal bank transfer, this is a SEPA->SEPA movement which is free.

Outcome:

Cost annual: Revolut Premium EUR €85.
- You can do the above (receive money) as many times as you like with no limit, it will all be covered under your Premium annual fee.
Cost ongoing: Transfer of USD $10,000 ACH from CS to Wise $0 (free!).
Cost ongoing: Add Money of USD $10,000 via Wise debit card into Revolut $0 (free!).
- You will encounter limits (GBP £10,000 daily and GBP £30,000 monthly for me).
Cost ongoing: Exchange from USD to EUR inside Revolut - Interbank rate $0 (free!).
Cost ongoing: Transfer of EUR from Revolut to ING $0 (free!).

Wise-Only Comparison:

If you had sent the money using Wise only (the free account, not the Multi-Currency Account) it would have cost you USD $74.11 in fees and you would have received EUR €8,187.22.
As you plan to send USD $10,000 each month, your Revolut Premium account pays for itself quickly:
- Using Revolut+Wise Combo: USD $10,000 x 12 months - EUR €85 EUR annual fee: (EUR €8,222.03 * 12 - EUR €85.00) = net receipt in ING of EUR €98,579.36.
- Using Wise alone: USD $10,000 x 12 months: (EUR €8,187.22 * 12) = EUR €98,246.64.
- You save almost EUR €332.72 by using a combination of Revolut+Wise.

Notes from readers

I am frequently asked why does the Revolut account and the Wise account need to be European versions. This is because if you send EUR from your local German bank account to a Revolut account that was setup as US, then it is seen as an international transfer and you will pay a fee to your German bank. By setting Revolut up as a European account, then it is within SEPA and there are no charges. Similarly, when you use your Wise debit card to top up your Revolut account if the Wise account was a US version then when you go to topup it sees the debit card as an international bank card and charges a hefty fee.
Sometimes, in my personal experience, I will go to topup my Wise debit card into my Revolut account and the transfer is rejected. If I just delete my Wise debit card and enter it again (takes 10 seconds) then it clears the error and it works. Another option is to use the virtual / disposable card from your Wise account and top up with that debit card in case the one you normally use gets rejected.
Another reader of this blog reported the following issue as well: “I ran into a problem where I could only transfer about USD 4K per day from Wise to Revolut using the debit card. I don’t know if it was because both accounts were new or not. Neither bank could tell me what the problem was as each said there were no restrictions on their side. Later, by accident, I may have discovered the cause. When you are in Revolut and add money using the Wise debit card, it asks if you want to approve using the Wise app or SMS message. I was always using the Wise app. One time I tried using SMS and the higher limit of USD 10K was allowed.” So the lesson is to check your settings on transfer verifications as that may be causing issues reaching transfer limits.

Disclaimers

This is not financial advice, no predicted outcomes discussed in this blog can be guaranteed. This blog is for entertainment purposes only to illustrate how Wise is not always the cheapest option. The value of using Revolut grows the larger the amounts are you are transferring. Products are mentioned for illustration purposes only and are based on my personal experiences as a migrant living and traveling in Europe and the United States. The complexity of filing your United States FBAR each year may increase as you have a lot of accounts with in/out and sometimes you have to report multiple accounts for Wise (one for each IBAN/account number). Talk to your tax adviser. This blog was current as of 7 June 2021 and may be out of date by the time you read it. Nothing in this post is sponsored and I have no connection to any businesses mentioned here. Did you find any mistakes or has anything changed since I posted? Please get in touch with me and I will update it! Do you disagree with my assessment? Let’s have a virtual coffee and debate it!

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