I owned some Red Hat stock when the company was acquired by IBM. This presented me with a new challenge of how to get the money from Fidelity NetBenefits to my bank account. Since these two accounts are in different countries (United States vs. Czech Republic) and different currencies (USD vs. CZK), I had to be very careful not to lose money on international bank transfer fees or exchange rates.
I had never transferred money from the US before. But I just started to work as a freelancer and most of my income would come from this country so I decided to use this opportunity to run a small experiment in order to discover the best way to get USD to my bank account.
In the following paragraphs I’m going to describe four different ways how you can transfer money from Fidelity NetBenefits (or other US service) to a bank account in some other country. If you don’t want to read about all the options, feel free to jump to the last one which is the ultimate solution I’m definitely going to use in the future.
Just to be clear, I didn’t try the first two options since my friends had already done so and it seemed like a waste of money. That’s why I decided to split the money in half and use only the last two options which were also the most promising ones.
The first option that would probably come to your mind is to transfer money directly to your bank account. Although this is the fastest way how to get your money, it’s also the one where you lose the most.
First of all, your bank will charge you a fixed fee for receiving an international bank transfer. The exact amount largely depends on your bank but if you have a good one it can be close to nothing. For example, the bank where I have my primary account charges around €1 for such transactions but the other one I use charges up to €20.
However, you will definitely lose much more on an exchange rate, especially if you transfer a large amount of money. It’s because banks use their own exchange rates to convert currencies and they’re far from the interbank exchange rate. For example, I would lose $186 just on an exchange rate if I decided to send all the money directly to my bank account.
The second option is to use a service like Revolut. I mostly use it for physical card payments abroad, internet payments by a virtual card or to split bills with my friends. But it’s also a great way how to convert currencies since it uses the interbank exchange rate during a workweek (Monday to Friday GMT) and charges just 0.5% over a weekend.
You can have multiple accounts in different currencies in a Revolut mobile app. You’re able to easily transfer money between these accounts and you can also make a bank transfer to/from a given account. Those transfers are in most cases domestic ones so they are free.
However, Revolut hasn’t come to the US yet so all bank transfers from/to your USD account are sent/received by a UK bank. If you try to send money from Fidelity NetBenefits to your Revolut USD account, you’ll probably be charged a fixed fee for an international bank transfer as with the first option.
But then you can exchange the money within the Revolut app using the interbank exchange rate (during a workweek!) and send it to your bank account as a domestic bank transfer. All this should be free if Revolut has a bank account in your country and your bank doesn’t charge you for incoming domestic transfers.
The third option is to use TransferWise, a service that offers a Borderless account for transferring money between different countries. TransferWise has an actual bank account in more countries than Revolut (including US) so you can make a domestic bank transfer for free.
TransferWise also uses the interbank exchange rate and it only charges a small fee for converting currencies. It is very transparent about the fee and you can always see the exact amount before you execute a transaction. In my case, the fee was around 0.5% so it might not be the best option if you need to exchange large amounts of money.
If you try to add your TransferWise USD bank account number as a withdrawal option to Fidelity NetBenefits, it will say that your ACH routing number is invalid. Don’t worry and use the wire transfer number. In most cases, they can be used interchangeably. I did it this way and the money arrived without any problems.
TransferWise + Revolut
The last and the best option is to use a combination of TransferWise and Revolut. The former one provides free domestic bank transfers in many countries while the latter one enables you to convert currencies for free using the interbank exchange rate (during a workweek). So how can you combine these two services to avoid any fees?
TransferWise gives you a free virtual debit card once you verify your account by depositing a small amount of money to it. On the other hand, Revolut enables you to top up your account by a debit card for free. Do you see where I’m going here?
You can send money from a service like Fidelity NetBenefits to your TransferWise USD account for free since it is a domestic bank transfer. Then you can top up your Revolut USD account by a TransferWise debit card for free as it is a payment in the same currency. Revolut will tell you it’s not (because the card is actually in GBP) but don’t be afraid to proceed with the payment. There are truly no fees. Finally, you just need to convert currency within the Revolut app and send the money to your bank account.
The only problem is that Revolut sets card top-up limits by a special algorithm to avoid money laundering. It will allow you to only top up your account by a relatively small amount when you add a new card. They won’t tell you where exactly your 24-hour limit is and you’ll need to find it by trying smaller and smaller amounts. In my case it was $300. But I made a mistake and topped up my account every 24 hours. One day, I forgot about it and when I then tried again after 32 hours, the limit was suddenly more than $875 (I had no more money in my TransferWise account by then). So try to play with it and don’t just emulate a money-laundering machine by making one transaction every 24 hours.
And don’t forget that there is both a 24-hour and a 30-day online payment limit on your TransferWise virtual debit card. But you can easily change the default one to the maximum amount in a mobile app.