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Send Money From TransferWise to Interactive Brokers

If you wish to start investing with Interactive Brokers, you will need to transfer money from your local bank account to Interactive Broker’s bank account first.

Once you have successfully funded the account, you can convert the currency and start investing.

You can read my guide on how to fund your interactive brokers account and also how you can withdraw money from your interactive accounts.

Interactive Brokers can be rather interesting because it would allow you to fund your trading account from any banks, that is under your name, and withdraw money to a lot of banks registered with your name.

Thus, it can act as an intermediate currency exchange between your local USD account and a foreign GBP account. In my Interactive Brokers currency guide, I explained that when you change from one currency to another in Interactive Brokers, the rate is very close to spot rate.

This is potentially a great saving.

A month ago, I have this problem of having some USD in my TransferWise account.

I wonder if instead of transferring the USD to my DBS Multiplier USD account, could I transfer to Interactive Brokers?

Why Do We Need TransferWise to Send Money to Interactive Brokers?

As a Singaporean, I have no problem funding my Interactive Brokers account. I can use FAST Transfer to fund my account with SGD or DBS Remit to fund my account with USD. Both options are considered as a Wire transfer.

Both options are free.

Unfortunately, other international banks may charge international investors an exorbitant fee to perform wire transfer to another country.

TransferWise is an international payments company with a few payment services that you can use to reduce the cost of currency exchange:

  1. Send money with money in one currency to another entity in another currency at an exchange rate more favorable than the rates charged by your bank
  2. Allows you to receive money in different currency with their virtual bank account (this is how I receive money from an United States source in USD
  3. Spend with a Virtual debit card

TransferWise might not always have the best rates. There are also similar platforms such as Revolute and OFX.

With TransferWise, we can potentially create this use case:

  1. Send money from an international entity via ACH (Automated Clearing House) to your TransferWise virtual account in the foreign currency
  2. Send the money from TransferWise via Wire Transfer into InteractiveBrokers
  3. Use Interactive Brokers to convert the money at near spot rates (incurring SG$2.80 of fee)
  4. Withdraw the money to a local bank for free (you are limited to one free withdrawal per month)

Of course you could just use the money to trade or invest (which is what I did)

Limitation of TransferWise for Singaporeans

I want to thank a reader for pointing out some of the limitations of using TransferWise for Singaporeans.

With the Singapore Banking Payments Act, there is a limitation to how much money you can send, hold, and spend on your payments account.

You can read the banking payments act here.

The limitation is

  • you can’t hold more than 5,000 SGD in your e-wallets by the end of the day Singapore time
  • you can’t transfer more than 30,000 SGD from your TransferWise balance each year

With this, it becomes a real bummer for Singaporeans. However, this might be useful for our international friends.

So here is how you can carry this out.

Step 1: Setup Your Deposit Instructions in Interactive Brokers

We start this by going to Transfer & Pay and select Deposit Funds

Select the currency to deposit in (in this case I chose USD) and Bank Wire

I name this institution as TransferWise and enter the Account number. I gave a nick name called TransferWise Kyith to identify the transaction.

I will let them know this is not a HK or China financial institution and the deposit amount to be $20.

Once all this is done, I will click on Create Deposit to finish this portion.

Where can you find your TransferWise account number?

Now go to your TransferWise Account. Click on the USD virtual account on the left sidebar.

Click on Your USD bank details to view the bank details. Select Inside the US.

In the details, you can find the Account Number.

Interactive Brokers will provide you with the bank wire instructions that you will need to set in TransferWise to send the money across.

Step 2: Configure TransferWise to Send Money

Now hop on over to TransferWise

Click on the Send money button on the side bar.

Choose to send from the account where your currency is in. In my case it is USD.

Choose Same Currency.

In this case, I’m trying to send US$20 to Interactive Brokers in USD.

I was charged USD$1.05.

I tried to vary the amount and the charge is still USD$1.05. To some, this is an absolute bargain.

Next select Business or Charity.

I did not enter an email address. I name the business as Interactive Brokers LLC, United States.

From Interactive Broker’s instruction, I key in the address as specified in the image above.

I would also enter the routing number and account number, then select Checking.

From the bank wire instructions, put the ABA routing number into Routing number.

The befuddling one is the account number. Interactive Brokers will give you an account number in the form of 1234567U8901234.

Your account number is the part from the start till before “U”. In this case it is 1234567.

The reference space is very small, so what I did was to put my Interactive Brokers account id.

Then I click Confirm and Send.

TransferWise will tell you that your money is on the way.

If you click on the transaction in Transferwise you can see the progress and the estimated time it takes to process.

Now it is time to wait!

How Long Will Your TransferWise Money Arrive and be Ready in Interactive Brokers?

A long time!

To be fair the transfer at TransferWise is pretty swift. Observe that it took just 1 day for them to send out the money.

If you go to Interactive Brokers, then Transfer & Pay, then Transaction History, you can review the status of the transaction.

I was stunned that it will take like 5-6 working days to get the money.

However, if cost is an issue, we have to bear with the wait.

We are just afraid we will missed things during this wait.

Conclusion

I hope that this method is cost effective and will stick around for some time. We might never know if Interactive Brokers will pull a stun by prohibiting this form of transfer.

I think the most sensible thing is not to do any currency conversion. Do the currency conversion in Interactive Brokers as the rates are better there compare to a lot of other platforms.

If you have tried with OFX, revolute and it works for you, do let me know.

My Comprehensive Interactive Brokers How-to Funpack

Here are some of my past articles on wealth building with Interactive Brokers. I hope it makes your life easier and brighter.

  1. An Easy Step-By-Step Guide to Setup Interactive Brokers (IBKR)
  2. How to Fund & Withdraw Funds from Your Interactive Brokers Account
  3. How to Convert Currencies in Interactive Brokers
  4. How to Buy and Sell Stocks and Securities on Interactive Brokers
  5. How Competitive are Interactive Brokers Commissions Pricing? And Also Explaining the US$10 Monthly Activity Fee
  6. Send Money from TransferWise to Interactive Brokers

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  1. Building Your Wealth Foundation – If you know and apply these simple financial concepts, your long term wealth should be pretty well managed. Find out what they are
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Roy

Saturday 6th of March 2021

Hi Kyith, if a brokerage like TD allows you to transfer SGD and USD. Would you rather convert SGD to USD with a bank then send it OR send SGD to the broker and let them do the conversion at their rates?

Kyith

Saturday 6th of March 2021

Hi Roy, it will depend on which method of conversion is cheaper. if the conversion at TD is not so cheap, then maybe it makes sense to convert before sending and vice versa.

Mohmaed

Wednesday 17th of February 2021

I had a chat with Transferwise representative today, she told me that they use another account for outgoing transactions than the account that is associated for me for receiving funds. she then gave me that account number. The problem now is that if I notified interactive broker with the account for sending, I would be afraid the transaction might not be matched with me (cause I would be giving them transferwise name and number not mine). In all cases I will give it a go and come here back to write the results. Thanks for the essay Kyith.

Mohamed

Saturday 6th of March 2021

@Kyith, That was Amazing, I was successful to transfer the funds to Interactive Brokers with the lowest rates ever as you mentioned USD 1.05 I followed your steps but I changed one step as I wrote that I know the TW uses other account for outgoing transfers so I contacted them on the chat had the account number they use in their outgoing transactions and put it in the IB notification. this doesn't change the results because the field for account number in IB is actually optional. the transfers I made was successful for 2 times up till now (one under USD 1000 the other was about USD 4000). and it took one day to appear on IB and other 4 days to validate and be available for trading. Thank you for procedure, Kyith.

Kyith

Thursday 18th of February 2021

HI Mohmaed! Thanks for the update. It will be weird if this is applicable for everyone.

Frank

Monday 15th of February 2021

Great insights in this post thanks Kyith. I'm looking to send USD I have in TransferWise to Interactive Brokers. Customer Support people I have talked to at Interactive Brokers have indicated they have experienced problems with successfully receiving funds sent from TransferWise, and don't recommend using TransferWise to send funds. I'm encouraged to see this post suggesting the process has worked for you, but I'm still nervous.

One thing I'm particularly unsure about is Interactive Broker's 44 day withdrawal hold on funds sent through the US ACH system (see https://www.interactivebrokers.com/en/index.php?f=1544#funding_03). If I understand it right, I believe TransferWise will send USD funds to Interactive Broker's US domiciled account using ACH (not as a wire transfer), and so the 44 day withdrawal hold would apply - i.e. the funds could not be withdrawn from Interactive Brokers to another account (for example, after doing a currency conversion) for 44 days. Do you have any insight on whether this is right?

Frank

Monday 15th of February 2021

Thanks.

Kyith

Monday 15th of February 2021

HI Frank, I transferred $1400 USD successfully last month. The transfer took long but eventually it did come. I have not withdrawn so am not sure. Since my funding came from bank accounts and TransferWise, I have no idea if they have a hold on my funds or not. I have some funds that I am transferring in progress from TransferWise

Hockey Monkey

Monday 15th of February 2021

Does this method still work?

Looking at IBKR policies, they put a 44 day hold on withdrawal of funds received via ACH except to the account they came from.

Jerome

Saturday 27th of February 2021

@Kyith, Hi Kyith. On this USD1400 transfer, how long did you wait? and have you ever failed your deposit from transferwise to IB?

I've just opened my IB account and ready for the first deposit, but still confused on which method I should use. The worst case would be a wire transfer from my local bank.

Thank you for your information, Kyith.

Kyith

Monday 15th of February 2021

HI Hockey Monkey, I transferred $1400 USD successfully last month. The transfer took long but eventually it did come. I have not withdrawn so am not sure. Since my funding came from bank accounts and TransferWise, I have no idea if they have a hold on my funds or not. I have some funds that I am transferring in progress from TransferWise

Hossein

Sunday 14th of February 2021

How about withdraw funds from IBKR to TW ? I got the problem because of the third part and the account should be on my name so that IBKR can submit the withdraw.

Kyith

Sunday 14th of February 2021

Hi Hossein, I think that might be a problem when transferring out. IBKR wishes to prevent money laudering so they tend to allow you to transfer to accounts where its either your home country or in your base currency. Correct me if i am wrong.

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