Sending Money to or from Germany
Your money isn’t gone, my friend. It’s just that someone else has it.
Ihr Geld ist nicht weg, mein Freund, es hat nur ein anderer.
— Banker James Mayer de Rothschild
The best way to transfer funds either to or from Germany depends on several factors, only one of which is cost.
Because the German banking system functions differently than the US banking system, it’s not a good idea to simply write a US check and send it to someone in Germany. By the same token, transferring funds in the opposite direction – from Germany to the US — also requires an awareness of the differences between banking practices in Europe and North America, and the fees charged to the sender and receiver.
More on The German Way
Banks & Money
Money matters in Germany and Europe
In the not-so-distant past, before the Internet and electronic fund transfers (EFTs), a popular method of moving money across the Atlantic was the “international money order” or a wire transfer. Today both of these are a bit old-fashioned, not to mention expensive. The German post office (die Post AG) doesn’t even accept international money orders any more! (But they do accept Western Union transfers; more below.)
Today your currency transfer options include credit cards, online services (PayPal, World First, Xoom, etc.), Western Union, and your local bank (usually the worst option). Let’s look at the various options and compare them — after a brief word about the problem with checks.
- See our Currency Converter for the current exchange
rates for various currencies (below).
What’s wrong with a personal or business check? For one thing, Germans (and most other Europeans) don’t write checks payable to a person or firm! (France, where personal checks are still used, is a rare exception.) Unlike a US personal or business check, a German check or bank draft is a transfer of funds (eine Geldüberweisung) from one bank account number to another. German banks just aren’t set up to deal with US checks. As a result they won’t even consider cashing an American check unless the depositor has an account with the German bank, and they will charge the account holder a fee for depositing the check. This also applies to a cashier’s check (banker’s check, demand draft). For a check payable in US dollars, the German bank will also charge a foreign exchange fee, further reducing the amount of euros the recipient actually gets transferred into his or her account.
Of course, the same is true for a German check deposited into a US bank account. My own American bank takes a cut of the exchange rate from euros to dollars, plus they deduct a foreign-currency check-processing fee from my account. This even applies to an EFT (or SWIFT transfer) from a foreign bank. Many banks also may place a hold on deposited checks in foreign funds and only make the funds available to the account holder after a certain period — days, weeks, or even longer. Most US banks won’t accept foreign checks at all, unless they are payable through a bank in the US (including Deutsche Bank). Check with your bank before you try to deposit a foreign check!
Need to know how much money your dollars or euros will buy? Use our currency converter (below).
Above (and in Banks & Money) we discussed the basic differences between banking and payment systems in the US and Europe. Now we’ll show you some of the options for transferring money between the US and the German-speaking countries or almost any country in the world.
Options for Sending Money to or from Germany
You have several options for transferring funds to or from Germany – or other European countries. These options vary in several important ways. There are three main choices for sending money abroad: banks, remittance services and forex brokers. More details about that in Part 2.