Germany is one of the top origin countries for immigrants in the Organisation for Economic Co-operation and Development(OECD) region. An OECD report revealed that approximately 3.4 million Germans live in other countries either as expatriates, students, or retirees.
The United States has the largest group of German immigrants followed by the United Kingdom and Switzerland. Unlike in developing countries, German immigrants are highly educated, the least having secondary school education and vocational training.
In 2017, Germans in the diaspora sent home $16,833 million to their families, businesses, or for savings and investment. The United States, Turkey, Switzerland, United Kingdom, and France, were the top 5 countries that sent the most money to Germany.
A large percentage of this money was sent through interbank transfers and partly through online money transfers and in-person transfers. Sending money to Germany, especially from outside the European Union comes with lots of regulations, exchange rate differences and fees. This guide helps you to put all this into perspective and make your next transfer home a breeze.
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There are multiple ways to easily send and receive money in Germany but these will largely depend on the provider you decide to use. Below you will find everything you need to know about sending and receiving money.
There are several channels you can use to send money to Germany both from the EU and outside the EU region. How you choose one and leave the other is purely based on personal preferences.
Bank transfers are the most popular ways of sending money to Germany. If you are sending from the EU you may be charged much lower fees than someone sending from outside the EU. Typically, when sending from North America (Canada or the United States), you will be charged around USD 45-50 flat fee to execute your transfer. Since this amount doesn't change irrespective of how much you transfer, international wire transfers are best for transferring large amounts of money.
Another dimension to these transfers is that if you use a bank that has a branch office in Germany or a branch of a Germany bank in the country you are sending from, you may end up paying less in fees. Correspondent banks usually cause delays in transfers and a hike in fees.
If you share a bank account with your spouse, sending a transfer can be as simple as depositing into your own account. The other bit you need to be careful with when sending through wire transfers is the exchange rate. Most banks offer low exchange rates for transfers without communicating explicitly to the customer.
Germany being a developed economy has such a reliable network of banks with almost every person having a bank account. Within 3-5 days from initiating a transfer, the recipient in Germany should have received the money.
Online money transfer services are becoming increasingly popular among Germans in the diaspora looking for ways of sending money home. The providers in this category are cheaper compared to banks, especially when sending small amounts person-to-person.
Even if you do not have a bank account in the host country, you can still send money through money transfer services. Some money remittance companies such as Payoneer, issue their own debit cards which makes it even easier for you to move money.
With online money transfer, you’ll need to sign up for an account, pay for your transfer through a debit or credit card or bank debit (ACH). Debit and credit cards are the fastest means of funding your transfer while for a bank debit it may take a few days to complete the funding of the transfer. You can send the transfer through the provider’s website or through a mobile app.
There are two main ways of sending money to Germany using online money transfer providers.
Bank Transfer-When sending from North America or from within the EU, the transfers are delivered the same day into the recipient’s account. Most providers including Worldremit, TranferWise and Xoom offer this service.
Cash Pickup-This method involves sending money to the recipient to enable them to collect it in cash from their nearest payout location. Cash pickups are instant. Xoom, MoneyGram and Western Union offer cash pickup services.
Even if you do not have a bank account, you can still send money to your loved ones through in-person cash transfers. Sending money through this method is easy and quick. You just need to locate a store near you, go in and complete a form, give the clerk the amount you want to transfer, show them your ID and that's it! You will be given a unique code that you will send the recipient.
The only downside with these services is that they charge fees based on a percentage of the amount you send. For large amounts, this can be costly. The exchange rates given may also be unfavourable. Western Union and MoneyGram are the main in-store cash transfer methods. They also have a feature where they allow you to begin the sending process online and complete it in person at the nearest store.
Whether you are sending money to Germany using online money transfer services or in-store cash transfers, you’ll need to provide some information to facilitate the transfer. Most providers ask for the following information.
Depending on the country you are sending from, you may be asked to disclose the source and purpose of the money.
With most Germans in the diaspora working, doing business or in their retirement destinations, there are many reasons why they send money back home.
Expatriates abroad prefer sending their earnings home because they may not plan to stay out of the country all their lives.
Germany is a developed economy with lots of investment options in disruptive as well as legacy businesses. These opportunities attract inflows from Germans abroad.
Germans abroad with businesses back home may from time to time send money to pay contractors and employees.
Those with families back home may send money regularly to supplement their incomes or directly support them in their day to day living expenses.
Others may be repaying debt or mortgages and have to honour the obligations as provided in the loan covenants they signed.
When sending money to Germany, you have the option of using bank-to-bank transfers. However, sending money using money transfer services is advantageous and convenient. Here are some reasons why you should consider money transfer services when sending your next transfer to Germany.
There are various aspects to consider when sending money to Germany. Three of the most outstanding factors are taxation, currency exchanges, and withdrawal limits.
When sending money to Germany, money transfer services can give you the best rates, charge you low transaction fees and even help you manoeuvre the money transfer complications, thanks to their transfer experts. To find out more about fees, take a look at our money transfer fees guide.
The fastest way is through the faster option provided by Ria Money Transfer. With Ria Money Transfer’s fast option, you can expect your money to reach its German destination in a matter of minutes. Make sure you are using the faster option because the slow one takes 3-5 days in most cases. The faster option is a bit pricier, but it is still cheaper than much of the slower competition.
The cheapest way to transfer cash online is through OFX. OFX doesn’t have any upfront, stated fees, and their hidden currency conversion costs are very low. OFX comes with a focus on larger transfers, and they have a sliding scale from 0.4% for smaller transactions to 1% for larger transactions. The only real problem is that they have a minimum transfer amount.
If you prefer sending smaller amounts of money, TransferWise is the second cheapest way when it comes to sending funds to Germany.
The easiest way is through TransferWise. As a peer-to-peer money transfer system, TransferWise makes it safe and very easy to transfer money. All you need to do after setting TransferWise up is tap the amount of money you need to send and the destination. After this, you need to pay TransferWise for the transaction and your money is on the way to Germany. Furthermore, TransferWise is available in a great many countries.
The current exchange rate for the Euro (EUR) is 0.9045 EUR per American Dollar (USD) as of the time this was written. The average exchange rate for the EUR was 0.9045 EUR per USD over the last 90 days. The EUR reached a high of 0.9175 EUR per USD, and a low of 0.8896 EUR per USD during the last 90 days.
The average volatility rate of the EUR against the USD was 0.27% over the last 90 days. This is a moderate volatility rate, and the EUR exchange rate has been fluctuating moderately over the course of the last year. Going forward, you can reasonably expect minor fluctuations to continue, barring any unforeseen circumstances.
The overall best way to transfer your funds to Germany is through TransferWise. TransferWise is the most well-rounded option for sending funds to Germany because it comes with a great mix of ease of use and affordable rates. It’s also not the slowest option available, as it only takes a day or two for your money to reach its destination in Germany.