International money transfers can be complicated, and one can spend hours searching for the best and cheapest way. Germany and the USA have very different banking systems. Hence, you need to weigh various transfer options to find the best solution.
You can send money from Germany to the USA by using:
- Western Union
- Wire transfer
Since I have been living in Germany, Europe, and some non-EU countries for over six years now, I have struggled sending money between EU and non-EU counties a lot. In this article, we are listing best solutions to send money from Germany to the USA.
The best way to transfer money from Germany to the USA
I am confident to speak about this topic due to my extensive experience in sending and receiving money from and in Germany.
Firstly, you need to know this fact: the German banking system functions differently from the American. So it’s never a good idea to do a classic bank wire.
You need to be cautious about all money procedures between Europe and North America and always consult your home bank first.
Overall, there are three main ways to send money from Germany to the USA: remittance services (Western Union, PayPal) and forex transfer companies.
The latter are non-bank foreign exchange companies also known or simply forex brokers.
They offer currency exchange and international transactions to private individuals and companies.
The last option is a local bank (don’t use it). Even if you do a transfer with a credit card, it takes a percentage in commission and has bad exchange rates.
The best way to transfer funds from Germany to the USA depends on several factors. But certain options are suitable for all kinds of transfers.
For instance, if you need a rash transfer when the person needs cash immediately, Western Union or MoneyGram are the best options.
Because even PayPal takes some days to remit money from the PayPal account of the receiver to the bank account.
And if you have some days to complete the transaction, you should choose a forex transfer company. They offer the most inexpensive and easy solutions.
Yet, with Wise you can send money in a short period of time and with the lowest fees.
Lastly, all options have their advantages and disadvantages.
The best option is to send your money from Germany to the USA is by using the company Wise (former Transferwise). Moreover, with them, you can do transfers to most countries in the world without losing on commission.
Currently, the service is available in 59 countries, and they add new currencies all the time.
People (including me) used to do money transfers via PayPal since it has a very convenient app and easy process.
However, I noticed that if you send or even receive money in a different currency, they cut a lot on the exchange rate and often charge a commission.
This way, Wise is far less expensive ($4 transfer fee) and fair. But if you send money and receive money in the same currency, PayPal is also easy and cheap.
You can download the Wise app for an even easier money transfer.
Wise offers services for private clients, businesses, and freelancers – all for the best exchange rates and a small commission.
The process of sending money via Wise is quite simple: you choose the currency/country, the amount, then add your data ( from where money should be deducted) such as debit/credit card or bank account, add finally, the bank account of the receiver. The amount will be transferred automatically from your bank.
Before transaction Wise informs you about the estimated date of arrival. Usually, it takes between 1 – 3 days to receive money in the USA, yet it depends on your and receiver bank, sometimes it takes just a few hours.
While processing the transaction, you can also see the current and guaranteed exchange rate.
In this way, Wise predicts an exchange rate on the arrival date. You can be sure they provide the best rate on the market.
Services of Wise don’t have any hidden costs. They provide full transparency for customers. The company also guarantees that your bank or bank of the receiver doesn’t charge anything additionally.
Wise always shows costs upfront, no hidden fees, no bad exchange rates, no surprises.
In fact, some companies in this industry do have a terrible exchange rate even when they don’t charge a commission.
For example, you can lose quite a lot while using the services of Western Union or MoneyGram.
After the procedure, you can track transfers in your account and inform you when your recipient got money.
It’s one of the best services out there regarding ease of use and conversion rates. Besides, the first transaction, up to $600, is free.
Funny enough, Wise was created in the UK by two Estonian expats, who weren’t satisfied with the money transfer services in the world.
The pain of losing money on transferring money in different currencies was so significant that they decided to make the life of all ex-pats and immigrants easier and came up with this concept.
Many foreigners experienced this problem as well, until this moment when they found Wise. It’s really a wise method of transferring money overseas as their exchange rate is the best I saw so far. Plus the service is almost lightning fast.
PayPal was around already for 20 years, noways it’s the largest international remittance service in the world.
I will be amazed if you haven’t used it yet. PayPal allows clients to transfer money from a PayPal account or a preferable bank card/bank account.
If you want to send money from the account, be sure you have enough on the balance. If not, you need to transfer money from your bank account to PayPal.
Sending money to a friend or family is free. All you need is either your friend’s email address, phone number, or PayPal username. Recipients will receive money on their PayPal account almost immediately.
However, there is nothing free when it comes to international transfers in different currencies.
Thus, the amount of PayPal charges depends on the transaction, the amount of money PayPal processes for you each month, and whether the transaction is international or requires currency conversion.
For example, if you send money through PayPal that you’re drawing from a debit or credit card, then PayPal charges 2,9% of the amount you send.
PayPal also charges an additional 30 cents for each transfer from debit or credit cards.
Furthermore, PayPal’s exchange rate for personal payments includes a 2,5% to 4,5% margin subtracted from the interbank rate and depending on the receiving currency.
If you send money in the same currency, I would say it’s the best option out there. It is absolutely free to transfer money to friends or family through PayPal accounts, as long as there is no currency conversion required.
PayPal is a good choice if:
- You are sending money in the same country (not across international borders)
- It’s not a cross currency transfer
- Both you and the recipient have a PayPal account
- You can fund your account via direct debit from your bank account
PayPal is not a good choice if:
- You need to fund your account via a debit or credit card (commission)
- You are transferring money internationally
- You are sending money in different currency than receiver’s account
- In these cases, the costs can add up very quickly and will often be between 3% and 7% of the amount you transfer
Western Union is the biggest provider of remittance services. They have over 550,000 agent locations across 200 countries and territories globally.
Today, almost every country in the world has at least one Western Union office where you can send and receive cash.
For their services, you don’t need to have a bank account, a transfer made in cash and require only your passport and the receiver’s name.
In general, the transaction can be done in two ways: the first is offline in the Western Union office. Almost every town in Germany has them, and some banks accept WU payments as well.
To send money, you only need to give cash to the agent together with the name of the recipient.
After the transaction is done, you will get a unique number, which will need to be shared with the person in the country of the destination.
So they can pick up cash in the nearest Western Union office. Usually, it takes just a moment till the money is sent and can be collected.
The second transfer option is online. In the last years, the Western Union started to operate more online to transfer money from your bank account to another country.
However, for this method only, you need to have a bank account. For the receiver, it’s optional. They can get the amount in cash and get it transferred to their bank.
Money will be automatically converted to the local currency. It’s a good option when traveling and needing to send or receive money after you lose your card or it gets blocked.
Typically, you can request your bank to send you money via Western Union.
Nevertheless, remittance services such as Western Union or MoneyGram have very unfavorable exchange rates and transaction fees. You will be paying a lot for their convenience and speed.
Let’s calculate how much it will cost to send money from Germany to the USA via Western Union. Send 500 EUR will cost you 515 EUR (15 EUR or $16,21 is commission) and the receiver gets only $511.
The actual exchange rate says that 500 EUR must be at least $540,25. Therefore, you pay around $45 for their bad exchange rate and commission.
As you can see Western Union can be quite expensive and unfair.
This type of transaction is only good when the receiver doesn’t have a bank account, and if you send less than $1,000.
MoneyGram is the second-largest money transfer company (Western Union has the number one spot). It enables customers to send and receive cash at over 350,000 agent locations across 200 countries and territories.
This company works in the same way that Western Union. Money can be transferred in cash or through the bank.
In general, MoneyGram’s user experience has a lower ranking than Western Union. Although I received and sent money with both these services and haven’t noticed the difference.
Both companies stress me out by making a misspelling in my name.
Western Union and MoneyGram are two very similar companies. What about costs?
When sending 500 EUR from Germany to the USA via MoneyGram, you will be paying $28 on the transfer fee, and the receiver will get $516.
Again with today’s average exchange rate, it must be at least $540,25.
Therefore you pay $52 to the MoneyGram for commission and their exchange rate.
Consequently, MoneyGram is more expensive than Western Union.
Last but not least, never use a direct bank to bank transfer (bank wire) for international transfers in Germany.
From personal experience, the rates will be very poor and you won’t get anywhere close to what companies above are providing. Wise is truly the best money transfer service between countries with differences in currency.
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