Transfer $2m from Australia to USA

[epistleofjames]

Looking to transfer $AU2 million from Australia to America. The bank I'm using in America currently doesn't allow international transfers. Should I just open an account and transfer the money to that one or is there another way to transfer to my current bank?

 

[eee27]

@epistleofjames Interactive Brokers does forex at a tiny margin over spot rates. It's by far the cheapest way. You need to be aware of lockup periods associated with various transfer methods though (anything that is a "pull" into IBKR, or reversible in some way, can have up to 40 day holding before withdrawal).

They do apparently get mad and sometimes close accounts if you only use the account to exchange currency and not buy shares though. For a one-shot that might be acceptable. You could probably avoid trouble by buying a US money market ETF (converting currency to do so), then selling that for USD a few days later. There will be a higher commission on that though, since IBKR is not commission free.

 

[blackmarch103]

@eee27 I agree, IBKR is the cheapest way BUT: Both the account the money is coming from and the account the money is transferred to must be in your name. You cannot use IBKR to "pay someone" at the other end.

 

[mcrkilljoy]

@blackmarch103 Why not just use a wire for this amount of money a wire seems like it would make more sense................obv. ACH isn't going to work but a wire should be fine

 

[orange14]

@mcrkilljoy Wire is expensive.

Between wire and Wise.com, the latter will be cheaper.

 

[blake2030]

@eee27 Putting money in an etf and then selling a few days later would trigger a taxable event, kind of annoying. I wonder if currency exchange triggers a taxable event. Probably not since there aren’t capital gains ?

 

[eee27]

@blake2030 The rules on the Australian side are fuzzy. If you're moving the money to spend, no CGT. If it's proceeds of a sale that you're repatriating (i.e. going to our way to OP) then you can just take the actual AUD landed in your account as the sale value for capital gains purposes.

I'm sure the US side has some rules about it too, but maybe not so favorable.

 

[felicitypenny]

@eee27 IBKR is not made for stuff like this and will likely at least warn you that they're not a currency exchange.
People have been banned from currency conversion when they abused IBKR.

 

[eee27]

@felicitypenny Yeah, that's what I heard. If OP just wants to do a one off and doesn't care about being banned, it might be an acceptable risk anyway.

 

[dogdad89]

@epistleofjames Keep your money out of US. It’s much better to keep it in OZ.Just ask any American how difficult banks are making it to withdraw certain amounts. Keep it in OZ

 

[eee27]

@dogdad89 I'm guessing OP wants to spend it (e.g. on a house), or invest it (without dealing with the harsh treatment the IRS gives to foreign ETFs). Unlikely that they're just going to stick it in the bank (or rather, 8 banks to make sure it's FDIC insured).

 

[gideonofillinois]

@epistleofjames Maybe Wise or Revolut would work well, I use both often for international transfers

 

[epistleofjames]

@gideonofillinois No problem with the sum involved?

 

[thomasgreentiller]

@epistleofjames 1.5 mil AUD transfer limit, 5.3k AUD transfer fee (0.36%)

 

[melissarowe1992]

@epistleofjames People often suggest wise.com 0.38% in fees total for the exchange AUD USD.

 

[christianforever999]

@epistleofjames You could look at something like HiFX, they're like Wise or Revolut, when you want to transfer large sums. I used to work for a law firm that handled visas for people moving internationally, and a lot of our clients used them to transfer money from house sales, etc. This was 10+ years ago so check rates first though.

 

[tobyp]

@epistleofjames Open HSBC. You are eligible for premier or jade tier. They can offer you a private bank and you can have both Australian and USA account

 

[purple30]

@epistleofjames Wise will give you issues with that volume.
I highly recommend doing a consultation with https://www.expattaxes.com.au/. We did this before we left it was very worth it.

There are risks associated with transferring large sums and you Want to be calling up the broker and getting them to quote you best rates they can offer. You will get better rates than you see online to move a lump sum like that.

There are also pros /cons to changing from tax resident to non tax resident in Australia and this will also affect when is best to move your money. (if that status is changing for you)

 

[epistleofjames]

@purple30 Thanks for the advice, I'm a permanent resident in America and haven't worked in Australia for 20 years.