Moving Money to Other Countries - HOW TO

Moving Money to Foreign Lands

If you have been following along here at all, I have been spending a fair amount of time thinking out loud about developing nations. What are the causes of this gap between developed and those still underway. Eventually, this gets into actually doing things for folks in other parts of the world, in the earnest hope that we can actually help them move forward. This piece is a bit of a departure, because it is eminently practical. It will provide you with a simple option for easily moving funds abroad at NO COST.

WHY?

I keep hoping all of this will make a difference someday. It is all founded on the basic belief that “we are all in this together”. I firmly believe that humans are fundamentally social. When one part of our human family is stressed, we all suffer a loss. When one part of our human family succeeds well, we all benefit. This is a BELIEF, my article of FAITH if you will. There are some studies that seem to confirm it, but it is not really a rational position. I choose this option - simple as that. 

And a story helps. I was visiting an old friend in Tanzania. We were out on the edge of the Serengeti. A young Maasai boy came up and they talked a bit. My friend went inside, retrieved some money, and gave it to the young man. I asked him what that was about. He replied: “That boy scored the second highest aptitude score in all of Tanzania. School is free, but he needs money for books and uniform. I am going to help him go to school.” But for a few dollars, that country and the rest of us would never know what that young man might accomplish. And I am persuaded, there are a few million similar young people out there. We need to invest in our young people, not burden them with poverty and loans that keep them from achieving the best they can be, and help the rest of us prosper.

Practical Alternatives

That said – how does one move money to other countries? You may be involved in a Sister Parish relationship, or sending “missions” to foreign lands, or just trying to fund a small one time effort. At some point, you will find that you may need to move some funds there. These are some of the options.

• 1.      Carry Cash. This is actually what our local Sister Parish did for quite some time. There is a $10,000 limit on this stuff. Not that it is illegal above that line, but you need to report it. The government is concerned about illegal activity. The other problem is bulk and safety. The largest US currency is the $100 bill. Those may be difficult to exchange because they are the ones most likely to be counterfeit. Twenties are better, but even $1,000 worth of twenty dollar bills is a little scary.
• 2.      Send a check. Well, the mail in many parts of the world is not very secure, and not trustworthy. That’s generally not a wonderful option. And then a check deposited there may take weeks to clear.
• 3.      Share a Bank Account. In this scenario, you open a US bank account, and send some blank checks on that account via a courier or personal representative. The foreign party writes a check on the US account and deposits it locally. This requires a bank account in the destination country, but that is generally a requirement for most operations. It also requires quite a bit of time. Funds deposited in a US account are generally available in one or two days. A foreign check deposited in another nation may take quite a bit longer. And there may be fees just for having a checking account.
• 4.      Wire Funds Electronically. This is very fast and secure, but there are sizeable fees. The sending bank will generally charge $50 for sending the funds. And the receiving bank generally charges $15 or more. You may get a special deal in some banks, reducing those fees somewhat. But, in general, it will cost at least $60 to move ANY amount of money internationally.
• 5.      PayPal. Paypal works in a lot of the world, but it also has a fee of at least 2.7%. Other similar funds transfer agents charge even more. And there are generally daily maximums of $2,000 or less. Many of these organizations simply do not support some of the poorest countries, like Nicaragua, our case in point.
• 6.      Debit Card. A debit card on a US bank can be used in most parts of the world. The drawback is that there is generally a sizeable fee for ATM withdrawals, or even for using it for purchases, or bank withdrawals. They may also charge a foreign fund conversion fee, similar to most credit cards.
• 7.      Schwab Checking Account. This option works well, and it has NO FEE. Open a Schwab One account, with checking. Go through whatever it takes to get a foreign agent authorized. This is a fair amount of work, and Schwab is quite stringent on this, because of the government’s concern with illegal operations, etc. Rest assured that the transactions can be traced, etc. That should not be a problem for the types of social minded things we are about.

Send some blank checks to your agent in the foreign country. Those will still take a long time to clear if they are deposited, but the account and checks on this end are free.

Get a debit card issued – this will require another song and dance, but it is worth it. Have the foreign agent made the custodian of the debit card. They can withdraw fairly large sums from a local bank with it if they are a regular customer. They can also do ATM withdrawals, up to $1,000 / day. Generally, there is no fee for this type of operation. If the ATM does have a fee, collect the fee information and submit it to Schwab. They will reimburse the account. We have not actually done this, as our agent has found an ATM with no fee.

The one hassle is that checks are deposited by mail. Schwab provides the checks and deposit slips and postage paid mailing envelopes. At some point, I am sure they will adopt the “take a picture” deposit already used by many banks. So the mailing step takes a few days.

When the funds arrive at Schwab, they dispatch an email indicating the date and amount received. The funds can be used one day later. They also have a very resourceful help number, in case there is any problem.

For another option, you can set up a two way electronic transfer between any US bank account and the Schwab account. There is no fee for this, but it generally requires at least one day for funds to arrive.

Conclusion

Find your local Schwab office, and pay them a visit. If they give you hassle about it, contact me and I will have our local Schwab agent help them understand how this can work. To locate my contact information, look at my website:  https://sites.google.com/site/carlscheider/  Or find me on FaceBook. There are only a few of us with that name! Or, worst case send me an email:  carlscheider(at)hotmail.com.

You can also drop a comment here on this blog to let me and others know how this worked out.