[Symbiote]

> On InteractiveBrokers for example

That is not a consumer-friendly site. Is it even practical for the typical case TransferWise targets: sending a few payments a year, or a few a month?

The pricing page for foreign exchange has the cheapest category as under $1 billion -- is transferring $200 something they'd do? I don't know what a "basis point" is, or "trade value".

https://www.interactivebrokers.com/en/index.php?f=4969

[Youden]

Interactive Brokers is by no means a replacement for TransferWise. It doesn't even permit you to send money to an account that isn't in your name.

That said, its currency conversion is the real deal. If you have an account with them (I do), you can convert as little or as much as you like and withdraw it to your own account elsewhere.

I wouldn't recommend opening an account there just for currency conversion but their brokerage offering is fantastic so I'd consider currency conversion a nice benefit that comes with that.

If you want a more direct comparison, Revolut does conversion for free if your amount is under 6k/month.

[jkaplowitz]

I'm not sure where in the provided link you found that, but I am not doubting you found something FX-related in there with $1 billion as a relevant number, since they serve lots of different professional populations.

But yes, they can exchange even a dollar or two. I've exchanged five figures a few times there between CAD and USD, as an American living in Canada and actively using a US credit card.

So far I've found them to be much more affordable than TransferWise, but equally, they are a very complicated broker to use, and it may not be worth the hassle just for FX. They have other benefits that make them worth the tradeoff for me, like good margin interest rates and the ability to provide tax forms complying with both the US and Canadian tax systems each year.

[graton]

Well this page says something about trading less than $1 billion per month:

https://www.interactivebrokers.com/en/index.php?f=1590&p=fx

[jkaplowitz]

Yeah, that's indeed the link that the other poster meant to share. See my reply to their comment parallel to yours for more detailed thoughts and numbers.

[Symbiote]

Sorry, I think I pasted the wrong link.

From the homepage, Pricing → Commissions → Forex leads to the 1,000,000,000 cutoff.

https://www.interactivebrokers.com/en/index.php?f=1590&p=fx

[jkaplowitz]

Thanks. I guess you're right that people like me who don't trade billions per month pay their most expensive forex rates. But it's not a cutoff, just a price tier, and still far cheaper than TransferWise or any other option I know of for exchanging non-institutional quantities of currency.

To clarify the terms in that table: one basis point is 1/100 of 1%, as they themselves clarify in a footnote rather than assuming all readers know it. And trade value is, well, the amount you trade. :) The footnote for that term clarifies that they convert and charge this commission in whatever currency you have configured as the base currency for your account. (For example, I've chosen USD for my base currency since most of my transactions are US stocks on US exchanges, even though I'm in Canada and therefore the legal entity I'm officially dealing with is IB's Canadian arm.)

So, to convert anywhere up to US$100,000 (or its foreign currency equivalent) to any other currency, they charge their minimum fee of US$2 - mathematically, 2 / (1/100 of 0.20) = 100,000. Above that and up to US$1 billion, you take the amount you're trading, multiply by 1/100 of 0.20, and that's the fee.

$2 is a ridiculously low fee to convert five USD figures or less of currency, given that they also directly pass through the very tight exchange rates collectively quoted by their suppliers without building any profit for them into the rate itself.

[rvnx]

You're absolutely right. I just mean that TransferWise has a lot of leeway in terms of pricing policy and that the actual cost of exchange itself is marginal (as counter-intuitive it may seems)