TransferWise vs. Bank of America: Who has cheaper rates? | finder.com
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TransferWise vs. Bank of America

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View our head-to-head comparison of two international money transfer services to find the best deal.

When you need to send money overseas, you’ll likely think of visiting a local bank like Bank of America. Offering wire transfers to more than 200 countries, BofA provides secure, convenient money transfers that typically arrive within two business days.

On the other hand, UK-based newcomer TransferWise is a fundamentally different way to send money online. Using peer-to-peer technology, it matches users looking to send money in one currency with customers in other countries looking to receive the same money. So if need to get pounds to someone in the UK, TransferWise will find someone in the UK looking to send dollars to the US, essentially swapping your funds.

Both Bank of America and TransferWise will safely get your money where it needs to go, but which is superior on fees, exchange rates and speeds? Read on to find out.

transferwise bank-of-america
TransferWise Bank of America
Fees From 0.5% to 1.5% of your transaction From $25 to $85 or more
Exchange rates Mid-market rate More than the mid-market rate plus margin
Speed 2–3 business day 2 to 3 business days
Max Transfer Amount Private individual – $49,999 per day and $199,999 per year
Business – $199,999 per day and $1,000,000 per year
No limit

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TransferWise and Bank of America: How they work

TransferWise

To use TransferWise, you’ll need to first create a free account, but it’s easy to set one up with your first transfer. You also have the option of signing in with your existing Google+, Facebook or PayPal account.

To send money, go to its site, select the currencies you are exchanging and indicate how much you want to send. After reviewing your rate and fee, money is pulled from your bank account and sent to a TransferWise bank in your recipient’s country using the mid-market exchange rate.

Bank of America

To send an international wire transfer with Bank of America, you’ll need to first set up a bank account. You can quickly and easily sign up for an account online by visiting a BofA branch with your Social Security number, contact information and residential address.

Once you have an account, you can send a wire transfer overseas by logging in to your BofA account, clicking the Transfers tab and then clicking Outside the Bank Transfers. Enter the details of your transaction — how much you’re sending, the currency and to where — and confirm your rates and fees.

Who offers lower fees?

TransferWise

Fees with TransferWise will depend on where and how you’re sending money, but most clock in at around $9.90. Overall, fees range from 0.5% to 1.5% of your transaction — and sometimes a bit higher, depending on the currency you’re transferring to.
To send $1,000 to China, for example, you’ll pay 1.5% of your transaction (or $15); to the Philippines, the fee drops to 1% ($10). You can easily find out what you’ll pay by visiting its “How much does TransferWise cost?” page.

Bank of America

While most major US banks offer free bank-to-bank domestic transfers (or waive fees for specific account levels), they’re typically your most expensive option when sending money internationally.

Banks charge higher fees — anywhere from $25 to $85 or more, depending on the details of your transfer — and a bigger variety of fees: incoming, outgoing and other fees. On top of high fees, they offer weaker exchange rates than money transfer specialists. They also offer fewer options for your recipient, typically requiring they have a bank account in which to receive your cash.

  • Winner: TransferWise

While it can be difficult to gauge exactly what you’ll pay with TransferWise and Bank of America before entering your information into their respective sites, you can expect to pay much higher fees in general with Bank of America than with the consistently affordable TransferWise.

Who offers better exchange rates?

To understand who offers better exchange rates, you’ll need to first look at the mid-market rate. This is the true exchange rate that averages the buying and selling rate of a global currency — and the rate banks and transfer services use when they trade among themselves.

Let’s look at the rates that TransferWise and Bank of America offer compared to the mid-market rate.

TransferWise

TransferWise boasts excellent exchange rates, and this is the area that sets it apart from banks and other providers.

It’s one of the only money transfer services that offers you the mid-market rate. So if you’re sending $2,000 to Canada and the mid-market rate is 1 USD = 1.31 CAD, that’s the rate you’re going to get.

Bank of America

Nearly all banks skew the mid-market exchange rate for a profit, which means your recipient will receive less money.

Using the example of a transfer to Canadian dollars (CAD):

  • If the mid-market rate is 1 USD = 1.31CAD
  • Your bank’s exchange rate might be 1 USD = 1.27 EUR
  • Winner: TransferWise

Its mid-market exchange rates make TransferWise the clear winner. You’ll be hard-pressed to find a stronger exchange rate elsewhere.

Who’s faster?

TransferWise

All transfers from US dollars are received to TransferWise within one business day. But it could take another two business days for your recipient to see the cash in their account.

Bank of America

With Bank of America, your transfer is typically delivered in two to three business days.

  • Winner: Tie

Both TransferWise and Bank of America offer quick transfers, but your average transfer may take about the same time with both providers.

Who offers more options?

Payment methods Minimum and maximum transfers Delivery methods Transfer speeds Countries and currencies
TransferWise Bank account, credit or debit card $1 minimum; no maximum Bank transfer 2–3 business day 30+ countries
Bank of America Online, in person $1 minimum; no maximum Bank transfer 2–3 business days 200+ countries

Sending $3,000 to Canada

Lauren and her family is buying a cabin in Alberta, and she needs to transfer $3,000 to broker for a down payment. While Lauren has a Bank of America account, she’s also seen ads on the subway about TransferWise.

Here are what her bank transfer options would look like with both TransferWise and Bank of America.

TransferWiseBank of America
Transfer fee$9.90$40
Exchange rate1 USD = 1.31 CAD1 USD = 1.27 CAD
Transfer speed1 business day2 business days
Total received3,895 CAD3,810 CAD

If Lauren chooses TransferWise, not only will she save about $30 on transfer fees, but she’ll also put down 85 more Canadian dollars on that dream cabin in the woods.

Bottom line

New kid TransferWise’s mid-market exchange rates and low fees could save you time and money when sending funds overseas.

Ultimately, you’ll want to compare your options to find the service that best fits your individual needs.

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