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Transferring money from China to the US now (August, 2022)


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When I left China hurriedly because of Covid in late January of 2020, I left most of my possessions in my Kunming apartment. Some friends went there yesterday on my behalf to empty it out so my landlord can rent it to other tenants. They will send me a few things and give away the rest.   

 

I left some emergency cash behind in a suitcase. They said it was a couple thousand USD. We are wondering about the best way to get the USD to me over here in Texas. I don't mind paying fees. 

 

Could they (Chinese citizens) simply deposit the fund in their own bank account there and send a wire transfer to me at my bank over here? I have done such transactions myself when I lived there in the past, but I'm not sure that is still a viable option today. I've also read that Western Union is possible, though I've never tried that method myself. 

 

Ideas? Suggestions? Thanks!

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I received bank wires from Chinese relatives in China to my US bank in early 2020. Neither they nor I had any real problems with it. Since it was a lot of money from a foreign source, my bank called me to ask what was up, and I told them. As I recall, there were fees on both ends but nothing terrible.

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Thanks @Moshen. My Chinese friends have called their bank, and it sounds like the system still works the way it has all along. They will go there tomorrow or the next day to complete the transaction. I don't mind paying fees for such a valuable service. 

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Just by way of follow-up, to possibly help someone else who might have the same question at a later date, the bank wire transfer was very efficient, handled by 中国银行 (Bank of China.) The funds arrived at my local bank here in Texas yesterday. It only took a little over 24 hours from start to finish. The fee on my end was $15. It was more on the Kunming end because it involved some currency exchange as well as the actual transfer fee. The term to remember for a consumer-level wire transfer like this is 电汇。

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I just happened to be looking into something like this. But, I’m looking to send money from the U. S. to Taiwan. My dad has given me Power of Attorney to handle his finances for him. He no longer handles it himself. He needs around $4,000 per normal month for living and health-care expenses. So, I’ll be sending money routinely. Things I have had to consider are listed below. In addition, I’m only looking into ways to send money from a bank to another bank.

 

  • ·      Fees

  • ·      Exchange rates and so-called hidden costs in exchange rates

  • ·      Anti-money-laundering limit

 

Anti-Money-Laundering Limit

 

The anti-money-laundering limit to avoid IRS paperwork and other potential headaches is $10,000 in the U. S. (Taiwan has a higher limit of 500,000 TWD, which is about 16,700 USD.) See the links below for a lot more information. For example, the limit also applies to a series of smaller amounts that exceed $10,000 within a 24-hour time period.

 

https://www.investopedia.com/terms/a/aml.asp

https://wise.com/us/blog/international-wire-over-10000

 

Bank of America

 

First, I looked into my bank, which is Bank of America. One option is to send money in USD (U. S. dollars). The fee for the outgoing wire transfer from Bank of America is $45. The fee for the incoming wire transfer to a bank in Taiwan (to be determined) is expected to be $10. Then, the bank in Taiwan would exchange USD with TWD (new Taiwan dollars).

 

In addition to fees, there’s the exchange rate. The “mid-market” exchange rate is the rate banks use between each other. But, regular people don’t get this rate. They get charged an additional margin, which includes so-called hidden costs. Depending on the situation, the margin could cost more than fees or less.

 

I’ve read that Taiwan banks give better exchange rates between USD and TWD than U. S. banks. The margin seems to be somewhere between 1% and 3%. It’s probably closer to 1% for a big client. It’s probably closer to 3% for someone like me. Let’s make up some examples.

 

Example #1. Bank of America limits wire transfers to only $1,000. For sending money in USD, Bank of America’s outgoing wire-transfer fee is $45. For the bank in Taiwan, the incoming wire transfer fee is $10. For the bank in Taiwan, the margin on the exchange rate is 2.7% (assumption). This is $25.52. So, the total cost is $80.52, which is 8.1% of $1,000. 8.1%! Bank of America gets 4.5%, and the bank in Taiwan gets 3.6%.

 

Example #2. Bank of America has an option to send money in TWD. The option has no fee. Bank of America would exchange the 1,000 in USD for TWD, before the money is sent to Taiwan. Bank of America’s margin on the exchange rate is about 4.3% (earlier this month). This is $43. For the bank in Taiwan, the fee for the incoming wire transfer is $10. The total cost is $53, which is 5.3% of $1,000. Bank of America would get 4.3%, and the bank in Taiwan would get 1%.

 

Chase is the one bank that may be slightly better than Bank of America.

 

Western Union and Paypal

 

Western Union and Paypal cost more than Example #2 (Bank of America), if I calculated correctly. Their processes are also more complicated, at least for Taiwan.

 

Wise

https://wise.com/us/

 

The following link shows what Wise can do without having to create an account with Wise: https://www.monito.com/send-money/united-states/taiwan/usd/usd/1000/?mode=live.

 

Example #3. Wise can send USD to Taiwan, but not TWD. Today, it costs $27.13 to send $10,000. For the bank in Taiwan, the incoming wire transfer fee is $10. For the bank in Taiwan, the margin on the exchange rate is 2.7% (assumption). This is $269. The total cost is $306.13, which is 3.06% of $10,000. Wise gets 0.27%, and the bank in Taiwan gets 2.79%.

 

I read that companies like Wise (and Xe and OFT) may also have to use an intermediary bank between the U. S. and Taiwan (because of something called SWIFT, which is used for international wire transfers; see https://www.swift.com/). The intermediary bank would charge a fee, which varies depending on the bank. I read a recent example in a Taiwan forum, in which the fee by an intermediary bank was $15.

 

Xe

https://www.xe.com/

 

The following link shows what Xe can do without having to create an account with Xe: https://www.monito.com/send-money/united-states/taiwan/usd/usd/10000/?mode=live.

 

Example #4. Xe can exchange USD with TWD and send TWD to Taiwan. There is no fee. For 10,000 USD, Xe’s margin on the exchange rate is 0.48%. This is $48. For the bank in Taiwan, the incoming wire transfer fee is $10. The total cost is $58, which is 0.58% of $10,000. Xe gets 0.48%, and the bank in Taiwan gets 0.1%.

 

OFX

https://www.ofx.com/en-us/

 

The following link shows what OFX can do without having to register with OFX: https://www.monito.com/send-money/united-states/taiwan/usd/twd/10000/?mode=live.

 

Example #5. OFX can exchange USD with TWD and send TWD to Taiwan. There is no fee. For 10,000 in USD, OFX’s margin on the exchange rate is 2.05%. This is $205. For the bank in Taiwan, the incoming wire transfer fee is $10. The total cost is $215, which is 2.15% of $10,000. OFX gets 2.05%, and the bank in Taiwan gets 0.1%.

 

Summary

 

The table below summarizes results of examples of $10,000 (USD) being sent from the U. S. to Taiwan.

 

Sending

Institution*

Bank

in Taiwan

Sending

Institution

Gets

Bank

in Taiwan

Gets

Total Cost

Bank of America

Receives TWD

4.3%

1%

5.3% = 805.15 USD

Wise**

Receives USD

0.27%

2.79%***

3.06% = 306.13 USD

Xe**

Receives TWD

0.48%

0.1%

0.58% = 58.00 USD

OFX**

Receives TWD

2.05%

0.1%

2.15% = 215.00 USD

* Western Union and Paypal are not good options.

** Wise, Xe and OFX may have an additional fee by an intermediary bank of, say, $15 (USD).

*** The margin on the exchange rate by a bank in Taiwan is assumed to be 2.7%. It could be much lower than 2.7% and probably wouldn’t be much higher than 2.7%.

 

There are many variables that could cause you to draw different conclusions for your situation, such as the countries involved, whether a business is involved, etc. So, if you’re looking for the best deal, you’ll want to do research that is like this.

 

At one point early on in my research, I thought I was stuck with Bank of America (or Chase). The three companies in the table above that specialize in international wire transfers are far better for my situation. They all seem to be reliable, too. Thank goodness! I’m looking forward to trying Xe.

 

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I’ve used wise and ofx for currency exchanges/transfers in the past, but only USD to AUD.

 

Wise is much less hassle to use, and would probably be my first choice. It’s always important to look at the actual amount you’d get when putting through a transaction though compared to the rates on the public website.

 

Wise always gave consistently better results for me over OFX.

 

I’m also curious as to whether xe can really deliver a rate that low. 

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