Find the right way to transfer money to Germany

You would think a topic like transferring money to Germany would be pretty straightforward. For a lot of us, it’s just not that simple. Depending on what you favor in the holy trifecta (safety, convenience, speed), you need to consider a few options. This post aims at helping you making an informed decision. Have a nice read!

sending money to Germany guide

Why would you transfer money to Germany?

There are various reasons for which you may want to wire a transfer to Germany. Let’s take a look:

  • You could be moving to Germany and need to transfer savings from your existing account into a new one (like a blocked account for visa application for example.
  • You may be living abroad but be sending money to Germany for your family
  • You may be working abroad for a limited period of time and want to transfer some earnings to your German bank account
  • You may be looking to invest in property in Germany from abroad
  • You may have to pay for business expenses in a currency other than your own
  • You may have to make a medium to large-sized payment abroad and need to send money to Germany

What are the different ways of transferring money to Germany?

Gone are the days when transferring money through pigeon post was the norm. Ok it never was – but there are some newer and more cost-effective systems nonetheless. Let’s see what options are available to us.

1- Bank-to-bank transfers

For sending money to Germany from Euro-countries

Since 2012, it has become pretty easy to transfer money within the European Union (EU). That’s because the EU came up with the “International bank account number” (IBAN). Which means that any bank account located within the EU also has IBAN references. So you can thus transfer money to Germany, or anywhere within the Eurozone free of charge! 

When to use it?

  • For transfers within the EU
  • For transfers to recipients with the same currency

How long will it take?

  • 1-2 working days

How does it work?

  • All you need is online banking and your recipient’s IBAN. Once you have that, all you have to do is make the transfer and wait for the magic to happen. Banks like Deutsche Bank, Sparkasse, Postbank and Berliner Bank, to name a few, offer this deal with other European banks.

2- Cash transfer operators

for sending money to Germany as fast as possible

  • MoneyGram
  • Western Union

Whether you’re in a big city or a more remote area, you’re likely to find one of these cash transfer operators. They might have their own shop on your local high street, or be tucked away inside your local shop. The main reason for using them is urgency, since these services are super fast. Though they’re also pretty pricey – taking around 5-10% of your sum as commission.

When to use it?

  • For urgent transfers 
  • For senders without a bank account or limited ID

How long will it take?

  • The transfers can reach the recipient within 10 minutes

How does it work?

  • After you’ve located your nearest operator, you have to provide some form of ID before they can wire the transfer to Germany. It’s a non-banking provider, so they go through their own internal transaction system to send over your funds. Once they’ve reached, your recipient will also have to identify themselves.

3- Online transfer services

For sending money to Germany from non-Euro countries

Online transfer services like TransferWise are a relatively new addition to the industry, but they’ve really been excelling themselves (the clue is in the name). The way it works, is that they match you with people sending money in the other direction – that way, your money doesn’t even leave the country. That’s how they’re able to offer such competitive rates. 

When to use it?

  • For transfers from outside of the EU
  • For those who would rather save money than transfer the sum asap

How long will it take?

  • The money usually arrives on the day, but it can equally take up to a few days

How does it work?

  • After you’ve found a suitable platform (TransferWise has got some good press), use it to make a transaction just as you would pay for online shopping. The platform takes your money in your own currency, but then converts it using the mid-market rate before matching you with someone sending money in the opposite direction. Your converted money then gets transferred to your recipient, and everyone receives an email notification – all’s well that ends well.

Summary: pros and cons of each method

PROSCONSUSE THIS IF
Bank-to-bank transfers
FOR EU
– Free within Europe
– Straightforward
– Expensive for non-EU transfersIf both source and destination accounts involved are located within the EU.
Online transfer service
FOR NON-EU
– Fair exchange rate
– Transparent
– User-friendly
– Customer-orientated
– New method
– Not as quick as other methods
If you have a rather large sum to transfer from outside the EU, and don’t mind waiting an extra day or two.
Cash transfer operators
FOR SPEED
– Very fast
– Trusted method
– ID not required
– Most expensive
– Lack of convenience
– Scams possible due to minimal paperwork
If all that counts is getting the money right away.

May your money gently flow like this quiet afternoon cascade
(credits: Photo by Mike from Pexels )

Other criteria you might consider to compare transfer companies

Money talks, and we’ve been listening to it – it wants to be treated fairly like the rest of us. That’s why we’ve come up with some criteria to watch out for when considering which system to go for, and then which particular company to choose.

Fees

Companies like to take a cut for any involvement they have in your transfer, so be aware of any fees that might apply. Keep in mind that if a company is offering a good exchange rate, they may have higher fees to compensate.

Exchange rates

You’ve probably seen a really attractive transfer fee, whilst forgetting to check the exchange rate. Turns out, it doesn’t end up being a good deal at all! Whether you realise it or not, the rate applied to your transaction can have a significant impact on the end sum. So make sure to find a company that offers competitive rates.

Transfer methods 

As discussed earlier, transfer methods can make a huge difference to the amount that ends up in your recipient’s account. You can make a transfer online and in person, but it’s also possible to make transfers using your phone.

Transfer options

Something known as a forward contract could let you secure a great exchange rate now, whilst giving you the option to transfer the money at a later stage. 

If you’re not in a rush, you can sometimes plan it so that your money only gets sent when your ideal exchange rate is met. You may also be able to schedule recurring payments, so that you don’t have to keep remembering to make the transfers every month, or few months.

Processing time

The time it takes for your money to go from A to B can vary between 10 minutes (using a cash transfer operator) and 5 days (using an online transfer service). Make sure to get clued up if speed is important to you.

Minimum transfer amount

If you only need to send a small amount of money overseas, be sure to check the conditions of the company you’re interested in. Some don’t allow you to send under a certain amount.

Recipient pickup

Will the money be deposited directly into your recipient’s bank account, or will there be a transfer agent to collect the funds from? 

Customer experience

If you encounter a problem at any stage, or would like to verify something, will there be any form of contact available – either by phone, email or live chat?


Case study with Jess: how to transfer money from the US to Germany

Jess lives in San Francisco. She just found a super cool job as brand manager in a Berlin start-up. She’s pretty savvy, so she’s already opened up a German bank account, although right now she’s missing a few $$$ on it. Soon the time will come to relocate, and Jess wants to make sure she’s transferred her savings over to her new account. All she needs to know now is how to transfer money from the US to Germany. So, what do you think she should do?

If you’ve paid any attention to the rest of the article *quickly scrolls up*, you’ll see that for transferring money to Germany from a non-EU country (i.e. to transfer money from the US to Germany), the best method would be – yes, that’s right:

An online transfer service like TransferWise, CurrencyFair, OFX or Neteller

Jess’ next steps

  1. Compare: She should check out the different companies that offer online transfer services, and find the best deal for transferring money from the US to Germany
  2. Register: Jess should provide vital information such as name, address, telephone number and date of birth. She should also make sure to have a valid photo ID at hand
  3. Complete: She should know her recipient’s details such as name, address and phone number. Depending on the company, she may need to supply their bank account info
  4. Pay: She should enter her chosen amount, then confirm the transfer sum and complete the transaction. She shouldn’t forget to save the tracking/receipt number so that she’ll be able to follow up on the progress of her transfer

There are more way than ever to transfer money to Germany. With blockchain-based tokens around the corner, the list of options is surely going to grow, at which point we will make sure to update this post! Feel free to ask any questions in the comments and if you spot something wrong, just let me know.

Sources: 1, 2, 3

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