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 (costs, convenience, speed), you need to consider a few options. This post aims at helping you making an informed decision. Have a nice read!
Why would you transfer money to Germany?
There are various reasons for which you may want to wire a transfer to Germany:
- 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.
What are the different ways of transferring money to Germany?
Gone are the days when sending money to Germany through pigeon post was the norm. 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 from/to Germany from other EU 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 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.
Costs
Free when transfer to/from the same currency. Otherwise, exchange rate will apply.
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.
Costs
It’s the most expensive of all options to transfer money to Germany. It depends on how you fund the transfer (bank account, credit card or debit card) and how your recipient gets the money (on bank account, in a store, online etc). MoneyGram adds a markup on the market exchange rate. That’s how they make money. The best is to use their online calculator to know exactly how much.
3- Online peer-to-peer transfer services
For sending money to Germany from non-Euro countries
- Wise (formerly Transferwise)
- Monito
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. They match the demand and the offer within the pool of desired currencies. That’s why they are called peer-to-peer.
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 (Wise 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. You can even use their Wise international bank account to receive & transfer money to Germany at a very cheap rate.
Costs
Wise’s fee starts from 0.41%, depending on the origin currency. You can calculate how much exactly with their easy calculator.
4- PayPal / Xoom
Paypal is ubiquitous in many countries around the world so there is a chance that you could send money yourself that way. That is usually fast and may avoid transfer fees but you will have to use PayPal’s exchange rate, which is usually at market rate.
Xoom is a service bought by PayPal solely focused on international transfers. You can log into Xoom with your PayPal credentials and use your PayPal balance to send money to Germany. It is mostly recommended for small to medium amount though.
When to use it?
- For smaller transfers from outside of the EU
- For those who already have PayPal accounts
How long will it take?
The money arrives instantly on the PayPal account, account for 2-3 business days to transfer it to your local German bank account from there.
Costs
Free between 2 PayPal accounts. Xoom charges a fixed fee starting from 3$ up to 10$ depending on the amount/location/currency with the exchange rate added on top. Rates may vary depending on your current location/currency, but it gives you an idea.
5- Neobanks
Neobanks like N26 or Revolut allow the transfer of funds between users for free and instantly! If both parties in the bank transfer have accounts with those banks, this can makes things considerably easier. When different currencies are involved, the only fees are usually the exchange rates.
N26 partners up with Wise to offer cheap international transfers, right from the app.
When to use it?
- For those who already have neobanks accounts
How long will it take?
The money arrives instantly if both have accounts, otherwise, it may take 2-3 business days.
Costs
Free if both receiving and transferring accounts belong to the same neobank, except for exchange rates if applicable.
Transfer money to Germany: pros and cons of each method
| PROS | CONS | USE THIS IF | |
| Bank-to-bank transfers | – Free within Europe – Straightforward | – Expensive for non-EU transfers | If both source and destination accounts involved are located within the EU. |
| Online transfer services | – 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 | – 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. |
| Neobanks | – Instant – Free | – Restricted access | If both source and destination use the same neobank. |
| PayPal/Xoom | – Instant – Free or cheap – Accessible | – Restricted access | If both source and destination account have PayPal. |
Criteria to consider when sending money to Germany
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 when transferring money to Germany.
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 when transferring money to Germany.
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. As a rule, the speedier the transfer, the higher the fee. If you are not in a hurry, it’s best to stick to slower transfer times for a minimum fee.
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. In general, it’s a good tip to avoid smaller transfers however. Sending a larger amount of money to Germany will always be comparatively cheaper.
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? That’s mostly relevant for cash transfer operators.
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 Wise, CurrencyFair, OFX or Neteller
Jess’ next steps to send money to Germany
- 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
- 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
- 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
- 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.
