Experiences with Revolut/Transferwise

[Seppia]

I just opened a Revolut account, it took me 3 mins and 10€, so I figured no big risk.
What lured me in is the possibility to transfer money internationally at the interbank rate, with zero fees up to something like 5000€ per month.

That's a pretty big deal: I'm lucky to be an HSBC Premier customer, so I get free international transfers, but the spread between the exchange rate I get and the interbank one is like 1,5%, which proved to be a fairly big hidden cost when I moved back to Italy from the USA.

Since I may be moving overseas again (in a different direction), I figure this could be a very effective way to move money.

What worries me is the fact that they don't have the european guarantee (the government guarantees your funds up to €100.000 here in case the bank goes bust).
Shouldn't be a big issue if one moves money into the Revolut account and then immediately out (using Revolut as a transit account basically), but still.

I would think this deserves its own thread as we have a lot of globetrotters here. I'll report my experiences with time

Anybody got any experience/anything?

[zocab]

Anybody have any experience with these types of service?
I just opened a Revolut account, it took me 3 mins and 10€, so I figured no big risk.
What lured me in is the possibility to transfer money internationally at the interbank rate, with zero fees up to something like 5000€ per month.

That's a pretty big deal: I'm lucky to be an HSBC Premier customer, so I get free international transfers, but the spread between the exchange rate I get and the interbank one is like 1,5%, which proved to be a fairly big hidden cost when I moved back to Italy from the USA.

Since I may be moving overseas again (in a different direction), I figure this could be a very effective way to move money.

What worries me is the fact that they don't have the european guarantee (the government guarantees your funds up to €100.000 here in case the bank goes bust).
Shouldn't be a big issue if one moves money into the Revolut account and then immediately out (using Revolut as a transit account basically), but still.

I would think this deserves its own thread as we have a lot of globetrotters here. I'll report my experiences with time

Anybody got any experience/anything?

I know a few people who do use Revolut in this way, and I don't think they've had any issues - but like you suggest, they move their money out ASAP. I've personally used Transferwise in the past - they're reliable, BUT charge 0.35% commission per transfer (better than what banks give you to be fair).

However: I actually personally think Interactive Brokers are much better if you regularly transfer money: you get market rate for as much money as you like, albeit with USD2 commission per trade. Your account has SIPC insurance, and you can - in theory* - invest directly there too. Caveats: you need to wait 4 days after transferring money in to transfer it out again, and if you have less than 100k in your account they charge 10 USD (minus trade comissions) per month. You can solve the latter issue by transferring in 100k of stocks and securities to them.

* You can trade stocks on markets around the world, but they will prevent you from buying US-domiciled ETF's if resident in the EU.

(I'm actually doing the opposite with IB: I send my local currency to IB, convert it to USD, and invest on the US market. I'm currently a passive Index-but-tilted investor, and US-domiciled funds are unfortunately the most cost effective way to implement my strategy.)

[frihet]

I am a happy user since some months. I had to find another solution as my exchange fee free credit card changed its conditions.

Very easy to use and change between the currencies and easy to top up fee free with my Swedish credit card. I wonder how that works? I thought the credit card company took out a fee on every transaction and in that case Revolut looses on every top up?

As you said I would not keep amounts I would loose sleep over on the account.

One convenient thing was to add the card to PayPal. I’ve already made a few purchases online in USD fee free because of that.

[Seppia]

Thanks for your replies. Interactive brokers is an option I hadn't considered, and could be a good one, especially because I've heard (to my biggest surprise) that in Hong Kong it's not that simple to invest in foreign stocks, and that the ETF market is not really developed.

I'll have to double check because I haven't really discussed with experienced people, but in that case IB would be a mandatory choice for me.

[henrik]

Revolut has their European banking license (whatever that is) from Lithuania (because Brexit). Apparently it is being contested because of the owners' ties to Russia. It's probably worth checking out the details before committing to business with them, since you're in the EU.
My very cosmopolitan sister has been using Revolut for years and is very happy with them.
I have used Transferwise for EUR/USD and EUR/NOK transfers a few times (just the transfers, no deposits or anything), it's been fast and cheap and easy.

[Seppia]

I tested Revolut in HK last week, doing two successive withdrawals of 1000hkd (one with my regular visa, the other one with revolut card).

Revolut: 1000hkd = 115.12€, no fees
Visa: 1000hkd = 115.39€ + 1.45€ fee

So there is a slight advantage, but I wouldn’t order a Revolut card just for that (especially for Americans since you have access to no foreign transaction fees cards fairly easily)
Next month I’ll try in Vietnam, to see if there’s a bigger gap when withdrawing a more exotic currency.

[take2]

I tested Revolut in HK last week, doing two successive withdrawals of 1000hkd (one with my regular visa, the other one with revolut card).

Revolut: 1000hkd = 115.12€, no fees
Visa: 1000hkd = 115.39€ + 1.45€ fee

So there is a slight advantage, but I wouldn’t order a Revolut card just for that (especially for Americans since you have access to no foreign transaction fees cards fairly easily)
Next month I’ll try in Vietnam, to see if there’s a bigger gap when withdrawing a more exotic currency.

I saw a bigger difference in Vietnam, but the largest was in Brasil which was ~$8 to withdraw funds if I didn’t have a card that reimbursed me. I think the best benefit is peace of mind, especially when withdrawing at more expensive locations (i.e airport when you arrive in the country)

[zocab]

So there is a slight advantage, but I wouldn’t order a Revolut card just for that (especially for Americans since you have access to no foreign transaction fees cards fairly easily)
Next month I’ll try in Vietnam, to see if there’s a bigger gap when withdrawing a more exotic currency.

It's indeed easy to get no-foreign-transaction fee credit cards in the US, but those aren't very useful for cash (they usually charge fees and/or immediately start charging interest IIRC). Also those cards usually have a yearly fee, so they still have a cost (but you can compensate for that by opening a new card each year - either the first year has no fee, or you can get some large points bonus when opening a new card).

Another good solution there for cash is something like the Schwab Debit card - which is actually available as part of their international account for non-US customers, but even that still charges 0.5% (which I believe is the same that most credit cards would charge). They also reimburse ATM fees up to 5 USD
per withdrawal IIRC, which is why I often use my Schwab card for cash - but I still prefer my Revolut most of the time just to maximise security (the Schwab card is linked to one of my brokerage accounts, so I'd prefer to use it as little as possible).

[take2]

It's indeed easy to get no-foreign-transaction fee credit cards in the US, but those aren't very useful for cash (they usually charge fees and/or immediately start charging interest IIRC). Also those cards usually have a yearly fee, so they still have a cost (but you can compensate for that by opening a new card each year - either the first year has no fee, or you can get some large points bonus when opening a new card).

Another good solution there for cash is something like the Schwab Debit card - which is actually available as part of their international account for non-US customers, but even that still charges 0.5% (which I believe is the same that most credit cards would charge). They also reimburse ATM fees up to 5 USD
per withdrawal IIRC, which is why I often use my Schwab card for cash - but I still prefer my Revolut most of the time just to maximise security (the Schwab card is linked to one of my brokerage accounts, so I'd prefer to use it as little as possible).

Fidelity cash management account is better than Schwab I think. Reimburses with no limit for ATM withdrawals. It can be a brokerage account or just linked to one so it’s good to have a nominal amount of cash in while traveling abroad.

[The Old Man]

Schwab (USA account) does not have a limit for reimbursing costs for ATM cash withdrawals; however, I am unaware of the specifics for their international account. Fidelity Cash Management Account as far as I am aware does not have an international account. I have both. I am happy with both; however, I prefer Schwab for various details that simplify management (ex. travel notifications can be done online for Schwab, but requires a phone call for Fidelity).

I have the TransferWise account. I have been happy with them for their international transfers capability. I have not used them as a bank account.

For no foreign transaction fee credit cards it is easy to get USA cards with no annual fee. It is, however, difficult to get a Chip & PIN card. There are only two that I am aware of in the USA.

[take2]

Schwab (USA account) does not have a limit for reimbursing costs for ATM cash withdrawals; however, I am unaware of the specifics for their international account. Fidelity Cash Management Account as far as I am aware does not have an international account. I have both. I am happy with both; however, I prefer Schwab for various details that simplify management (ex. travel notifications can be done online for Schwab, but requires a phone call for Fidelity).

Unsure if this is a new development? I opened up a Fidelity Cash Management in 2017 whilst living abroad in the UK (I already had a few other brokerage/retirement accounts with them).

I remember that it was not explicitly advertised (and indeed I originally opened up a Schwab for this reason) but the international ATM withdrawals are completely reimbursable. I wasn’t able to finalise the Schwab account because my IP address wasn’t in the US so I called up Fidelity and they clarified that whilst there is a 1% foreign exchange fee if you use the debit card to pay directly, there is no fee to withdraw funds and indeed they reimburse 100% of any local ATM fees. I was also upfront with them that I lived abroad so they made a note and I never need to let them know where I am.

I use it in conjunction with a no foreign transaction fee credit card which takes care of all issues. Hope that helps clarify.

[Sabaka]

Hi Seppia,

I've been using a Revolut here in the U.K for a while, mainly as a separate bank account for matched betting/similar activities. I've also used it to do large foreign currency transactions, up to £5,000, and have never had any issues. It is definitely (imo) a very useful tool to have. I was asked to provide a load of documents recently to verify the account, but that was just because 90% of the transactions were gambling related. As long as you're just doing it for normal transactions I think it'd be fine.

Two things I'd say are that 1) Do not exchange any currencies or make any foreign payments at the weekend, as there will be a markup. 2) You can only withdraw £200 cash p/m fee free (not sure if different in other countries). 3) You might not be able to use the account with some investment/trading websites.

And as others have said, I wouldn't use Revolut as a main account, and would only keep small amounts in there.

[zocab]

I remember that it was not explicitly advertised (and indeed I originally opened up a Schwab for this reason) but the international ATM withdrawals are completely reimbursable. I wasn’t able to finalise the Schwab account because my IP address wasn’t in the US so I called up Fidelity and they clarified that whilst there is a 1% foreign exchange fee if you use the debit card to pay directly, there is no fee to withdraw funds and indeed they reimburse 100% of any local ATM fees. I was also upfront with them that I lived abroad so they made a note and I never need to let them know where I am.

Thanks for the corrections - I don't know why I thought there was a 5 USD limit. Around the internet there are reports of reimbursements up to 20USD for ATM fees, so indeed they're quite generous.

It's odd that you weren't able to "finalise" the Schwab account - maybe their online system didn't support non-US applications at the time? I (non-US resident) seem to remember completing a pdf form, but I already had a restricted (Employer Stock) account with Schwab, hence was able to submit my application via internal messaging - that said, I do seem to remember seeing instructions to send the form by physical mail for new cusotmers perhaps?

Note that apparently Visa and Mastercard both charge fees of approx 0.5% on currency conversion, which I think in turn applies to all transactions with any Visa or mastercard. So it's not entirely true that you pay 0 transaction fees, but you are still getting close to the best possible rate. (For sufficiently big transactions it would theoretically still be cheaper to convert on the Forex market and send a transfer though - but that's a painful multi-step process.) I certainly can confirm seeing 0.5% margin on any withdrawals with my Schwab card, I haven't tested with Revolut yet.