Totally Frenched Out

From the blogger formerly known as Samdebretagne

Tuesday, June 14, 2016

Transferring money back home

Quite a while back, I mentioned that I was looking for an effective way to save money for retirement since French savings account only offer peanuts in interest and getting a French assurance vie policy equals mega headaches for US tax declarations. (If you're looking for more information on why you shouldn't get ever sign up for an assurance vie, this article does a great job of explaining it here. As a side note, this also applies to investing any mutual fonds/stocks offered by your local bank).

So that doesn't leave a whole lot of options for Americans in France, and I started to look back to investing in the US.  I came across a group of Financial Advisors called Thun Financial, who are dedicated to helping expats abroad, and I have since watched several of their webinars.  While I have not hired them since the amount of money I have isn't nearly enough to be of interest to them, I have been able to get some good advice from their website and frequent free webinars (which is basically invest in the US in both US & World funds).

That means however figuring out how to conveniently and regularly get money back to the US in a cost-efficient manner.  Going through my bank means paying a wire transfer fee here, a wire reception fee there, plus getting a sometimes questionable exchange rate, so I definitely didn't want to do that on a regular basis.  I use XE.com (and their app) regularly for calculating exchange conversions, and I'd heard a lot of good things about them online regarding their money transfers, so I decided to give it a go last week.

The whole process was initially a bit confusing, despite their promises of "it's so easy to use!", so I thought I'd detail it here in case anyone else is looking to transfer money back home.

First of all, you have to sign up with XE, and there is a bit of information verification - including your home address, your French bank account, your home bank account, a photo ID, and a RIB or EDF bill.  Once that has all been approved, you can start your first transfer.  It starts by logging on to their Trade website, and completing a trade. You can either do an immediate trade, set up an automatic trade when the exchange rate reaches a certain rate, or you can set up a rate alert for the next seven days.

To do an immediate trade, you enter in the amount you would like to transfer, and then it gives you an immediate quote of how much money you will receive in the foreign currency.  If you're happy with that, you press "book trade", and you'll receive an email asking you to transfer the EUR amount to their French bank account, specifying your unique trade quote as the object of the transfer (be sure to select "EFT Trade" - it takes a day or two longer than a wire transfer, but it is the free option).  They will then transfer that same amount to their account in your home country, who will then do an internal transfer to your home account.  So as you can see, there's a few more steps involved, but in the end, it means you don't pay an international transfer fees on either end.  The rates they quote are also better than I've seen quotes at least by the BNP.

So voila - a little how-to on an inexpensive way to transfer money back to your home country!

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8 Comments:

Blogger ellenln said...

i use western union to move money from the us to belgium .. it's cheap and i can send it in euros ..
should work for you too

June 14, 2016 at 11:49 PM  
Blogger Tim Dudek said...

Oh I love the idea of setting up a trade at a certain exchange rate.

June 15, 2016 at 8:10 PM  
Blogger The Paris Chronicles said...

Do note that if a US Citizen residing in France has under $300,000 in foreign-based investment instruments, they aren't impacted by the reporting forms. These are targeting the big earners, (of which I am sadly not).

I also wanted to add that my retirement funds are invested in a Contrat Assurance Vie, and they have done well considering global market conditions. I'm not sure what your experience was, but for me it was a wise and solid placement when I moved funds there in 2007.

June 16, 2016 at 12:37 PM  
Blogger Ksam said...

The $300,000 only applies to the FATCA declaration - if you have over $10,000 in a foreign bank account at any point in the year, you still have to do the FBAR declaration.

And maybe I wasn't clear enough regarding the assurance vie - the issue is not how well they are or aren't performing, it's more so that they are considered an investment by the US gov and thus everything you earn from it needs to be declared as income on your US tax form. And declaring them is extremely complicated because they are made up of several different funds and you need to declare exactly how much each fund made, which is a nightmare to figure out. Just google "Why Americans should never own foreign mutual funds" and you'll come across pretty much every expat tax firm out there advising against it....

June 16, 2016 at 2:38 PM  
Blogger The Paris Chronicles said...

There is a large problematic now that we cannot use any American institutions to place our money. Last year I contacted several major American brokerage firms (Merrill Lynch, etc) to place some investment money. The Patriot Act prevented them from taking my money, since I reside in France but am still an American citizen. So in essence I was obligated to use a French bank/brokerage firm. I was able, however, to put it in a mutual fund that was US-based. But still! I would have preferred to have the investment done via Merrill Lynch or Wells Fargo.

Did you find this to be the case when you were researching?

June 17, 2016 at 10:37 PM  
Blogger Ksam said...

You are right, that is a huge problem for exapts today! The only way I have seen online anyway to get around it is if you still have a US-based address, which unfortunately a lot of people don't.

June 18, 2016 at 3:45 PM  
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June 22, 2016 at 11:21 PM  
Blogger Tammy BonjourAdventure said...

I'm so thankful you posted this! I've been trying to figure out the best way for me to send money to the US in order to pay my student loans. I tried Xoom, but they only send money from the US to France, not vice versa. Apparently if you have an HSBC account in the States and an HSBC account in France you can transfer between them free of charge, however you have to maintain a $10k minimum balance, and frankly I'd rather invest $10k than have it sitting in a bank somewhere. I just signed up and will see what they allow me to do! :)

August 22, 2016 at 2:48 AM  

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