Using Wise Services to Save on Banking Fees

Wise’s story

The idea for the company was born out of their personal frustration with high bank fees and unfavorable exchange rates when transferring money between the UK and Estonia.

The company’s initial focus was on providing a peer-to-peer money transfer service that bypassed traditional banking systems. This approach allowed them to offer significantly lower fees and more competitive exchange rates compared to traditional banks. As the service gained popularity, TransferWise expanded its offerings to include multi-currency accounts and business services.

In 2021, TransferWise rebranded to Wise, reflecting its evolution from a pure money transfer service to a broader international banking platform. The company has continued to innovate, introducing features such as instant transfers, multi-currency debit cards, and integration with various financial platforms.

Wise has experienced rapid growth since its inception, expanding to serve millions of customers across multiple countries. The company went public in July 2021 through a direct listing on the London Stock Exchange, marking a significant milestone in its journey.

Today, Wise continues to challenge traditional banking models with its focus on transparency, low fees, and user-friendly financial services for individuals and businesses operating internationally.

Why Use Wise

Here are my reasons to use Wise:

Low fees

On currency conversion, they usually practice at the current price exchanged on the markets.

For the bank transfer, it’ll depend: if you opt for the regular bank transfer, fees are lower than paying by credit card. However, when it comes to paying someone in Switzerland in your own currency (e.g. euros), you pay far considerably less fees on a bank transfer than with a traditional bank, even online banks like BoursoBank in France.

Credit card payments often come down to how fast you want to pay. Otherwise, I use the regular bank transfer.

Quick to Send and Receive the Money

I work in Geneva since last October and it takes around 10 to 15 seconds to wire the money from Wise to my French bank.

Receiving money is as quick as it takes from the sender to send the money. Every month, I transfer my salary from my Yuh account, my Swiss bank, and if I do it before 8 AM on a working day, the money is available within two hours on Wise.

Multi-currency Accounts

I have two currency accounts with Wise:

• one to receive euros,
• one to receive Swiss francs.

Only the first one has IBAN details, so in that case, you must declare it to the Tax authorities in France. The Swiss currency account isn’t an account since I’ve never left any money there. It acts as a temporary location to receive and send money.

Investments Options

You can use two options:

• Low-risk investments based on “interest-earning fund that holds government-guaranteed assets”. You can hope to get a little above 3% but it isn’t guaranteed.
• High performance investments based on “iShares World Equity Index Fund”, itself based on the MSCI World Index. It performs pretty will with an average 11.89% return in the last 5 years. It’s very similar to the famous S&P500 so it doesn’t bring a very risky investment. It can be used for long-term investment if you’re willing to do it.

You can enable these on any of your currency account. Only one type of investment is possible at one time. Switching investment type will take a day to allow the manager to calculate earnings.

Also, Wise provide statements for declaring your investments to the tax authorities. That’s handy when the time comes to declare your revenues. Just do it early on in the new year as it takes a few days to get the statements.

Applications, Web and Mobile

The applications are intuitive and secure. To create the account, it’s rather simple, though they require to use a verification process that can take a little effort, especially when it comes to providing the ID. However I’ve found that it’s challenging with all online ID-verification service.

Free Mastercard

Wise provides a free Mastercard to pay in multi-currency.

The ATM withdrawal limits apply across every Wise card you have—reaching a limit with one card means you can’t spend with another. The limit refreshes every first of the month.

The daily limit is by default at EUR 4,000 and refreshes daily at midnight.

You can edit the limits, but I won’t dive into it since my local French bank provide enough VISA cards for free.

I can say howver that regarding ATM fees, you have 2 free withdrawals each month—as long as you don’t withdraw over EUR 200. You’ll be charged 1.75% on any amount over EUR 200.

After your 2 free withdrawals, there’s a EUR 0.50 fee per withdrawal.

About The Personal Account

By default, you use it for international transfer, with very low fees compared to regular banks.

It’s more interesting than Paypal because the fees are significantly lower.

At the time of this article, if you wanted to send 100 euros in Swiss francs to someone via Paypal, the recipient gets CHF 91.43. On Wise, he would get CHF 93.61.

This comes mainly from the 4% difference in the exchange rate: at CHF 0.9143 for one euro for Paypal compared to CHF 0.9535 for one euro for Wise. Wise also clearly state their fees, 1.83 euros in the example. Paypal probably includes them the conversion rate, but it still costs 2% more and when it comes to large sums, it can add up.

About The Professional Account

You don’t create a separate account for professional activities.

From the same email, you can set up a professional account to receive totally separate incomes or spend the money as you like.

In my case, until late 2023, I used to receive funds from a client abroad who paid me to my email address.

This client had a business account as well.

You can set up to wire automatically any money received to your local bank account, or keep on Wise.

My review

I’ve been using Wise for more than 10 years now. I like how it enabled me to pay currencies in a breeze and pay lower fees compared to the historic Paypal.

Though other companies have emerged, like Revolut, I stuck to Wise’s services because they have never failed me. I tried Revolut but the application couldn’t even accept my physical address in France…

Some colleagues of mine use both Wise and Revolut to decrease the fees further. I’ve not taken the time to try it because of the issue to create the account on Revolut.

The gain could be 50% of the fees I pay to Wise, which would be less than a hundred Swiss francs in 8 months.

Conclusion

You can avoid paying bank fees in 2024 using service like Wise make a difference. Do you know how much you pay with your bank?

Wise’s clear fees is something that is appreciated today. If you want to try, here is an affiliated link to sign up. If you make up to 500 euros as your first transfer to any currency today, you won’t pay any fees. Plus, if the transfer is greater than 250 euros, I’ll get a point to receive a bonus. I need three points to get the bonus. Thanks 😁