Wise negative interest

[FriendlyFarang]

I just got an email from Wise, informing me that they now have a negative interest rate if the Euro balance on my "Wise borderless" account exceeds 3000 Euro.

[Ohyesuare]

You mean they will deduct money from you? That's strange.

[FriendlyFarang]

1 minute ago, Ohyesuare said:

You mean they will deduct money from you? That's strange.

Yes, that's what "negative interest" means.

They will charge 0.9% per year for anything over 3000 Euro in your account.

[Stocky]

Wise isn't a bank, obviously they don't want people treating it as such.

[MJCM]

They announced this in April.

 

Quote

 

We are updating our prices. From 19 April 2022, the EUR holding limits will change:

    Personal customers have a free allowance of 3,000 EUR, while business customers have a free allowance of 30,000 EUR.

    An annual fee of 0.9% will be charged for any amount that you hold in EUR above the allowance threshold

 

 

https://wise.com/help/articles/2978082/what-fee-am-i-charged-to-hold-large-amounts-of-eur

Edited June 19, 2022 by MJCM
Removed "!" because someone might take offence.

[FriendlyFarang]

4 minutes ago, Stocky said:

Wise isn't a bank, obviously they don't want people treating it as such.

The "Wise multi currency account" (was called Wise borderless in the past) works like a bank account though.

[Ohyesuare]

5 minutes ago, FriendlyFarang said:

Yes, that's what "negative interest" means.

They will charge 0.9% per year for anything over 3000 Euro in your account.

Yeah it was more of a rhetorical question because I've never heard of any financial service doing that. I regularly keep amounts much larger than that in my Wise account and have not received this email or ever had money deducted so seems to only be for EUR accounts for now. Hopefully they don't expand it.

[scubascuba3]

1 minute ago, Ohyesuare said:

Yeah it was more of a rhetorical question because I've never heard of any financial service doing that. I regularly keep amounts much larger than that in my Wise account and have not received this email or ever had money deducted so seems to only be for EUR accounts for now. Hopefully they don't expand it.

Don't euro bank accounts do something similar? because euro interest rate is negative

[Ohyesuare]

2 minutes ago, scubascuba3 said:

Don't euro bank accounts do something similar? because euro interest rate is negative

Yeah they must as I just read that is why Wise does that, because it costs them to hold EUR right now. Seems like Australia also has a fee for holding large amounts.

[ThaIrish Sean]

I doubt if it will be for much longer. With interest rates rising around the world due to inflation.

[MJCM]

16 minutes ago, scubascuba3 said:

Don't euro bank accounts do something similar? because euro interest rate is negative

My home country charges 0,25% for amounts deposited over 100.000 Euro!!

 

But it going to change, in Oct it will be 0%

[Stocky]

18 minutes ago, FriendlyFarang said:

The "Wise multi currency account" (was called Wise borderless in the past) works like a bank account though.

As maybe, but they hold your money in their accounts in other banks, not their bank - they're money movers not bankers.

[SAFETY FIRST]

1 hour ago, FriendlyFarang said:

 now have a negative interest rate

Don't worry, it won't be negative for much longer. 

 

Interest rates are rising. 

[EricTh]

1 hour ago, FriendlyFarang said:

The "Wise multi currency account" (was called Wise borderless in the past) works like a bank account though.

What are the advantages of having a Wise multi currency account versus putting it in a bank?

 

Wise accounts don't pay any interest.... 

Edited June 19, 2022 by EricTh

[FriendlyFarang]

1 minute ago, EricTh said:

What are the advantages of having a Wise multi currency account versus putting it in a bank?

 

Wise accounts don't pay any interest.... 

My regular bank account also doesn't pay any interest.

The advantage of the money in the multi currency account is that I can instantly transfer to my Thai bank account if required, or any other bank account.

If I send money from my German bank account to my Thai bank account through wise, it usually takes a day before the money arrives.

When using the Wise virtual credit card it takes the money I have in this account and I can pay in any currency without paying a foreign currency fee.

No really big advantages, but enough for me to keep a few thousand in there. Now I reduced this to less than 3000 Euro to not be charged any fee.

[EricTh]

3 minutes ago, FriendlyFarang said:

My regular bank account also doesn't pay any interest.

The advantage of the money in the multi currency account is that I can instantly transfer to my Thai bank account if required, or any other bank account.

If I send money from my German bank account to my Thai bank account through wise, it usually takes a day before the money arrives.

When using the Wise virtual credit card it takes the money I have in this account and I can pay in any currency without paying a foreign currency fee.

No really big advantages, but enough for me to keep a few thousand in there. Now I reduced this to less than 3000 Euro to not be charged any fee.

Waiting one day is not a problem, I have to wait several days sometimes for Wise to transfer my money.

 

Isn't the foreign currency fee already calculated when you first transfer your money into this multi-currency account? They will also mark up the exchange rate when you swipe with your Wise credit card.

 

 

 

[Moonlover]

3 hours ago, Stocky said:

Wise isn't a bank, obviously they don't want people treating it as such.

Yes quite so. Wise make their money by moving your money, not leaving it to stagnate. I noted that the Euro zone has negative interest rates at the moment, so this move by Wise should be no surprise.

 

It's obviously a move to discourage holders of Euros from parking their money in their Wise accounts and thus avoiding paying interest to the banks. 

[lkn]

1 hour ago, EricTh said:

Isn't the foreign currency fee already calculated when you first transfer your money into this multi-currency account? They will also mark up the exchange rate when you swipe with your Wise credit card.

There is no fee transferring money into your Wise account. There is however a fee when you transfer it out of your account, but this somewhat matches the fee for doing a cross-border transfer.

 

As for using the debit card: Yes, there is a percentage added to the rate (for foreign currency), for me this has averaged out to be 0.44% compared to the ECB rate for the same day, which is much less than most of banks, and no-one will give you the ECB rate, as that is the mid-rate.

[Sparktrader]

3 hours ago, Ohyesuare said:

Yeah it was more of a rhetorical question because I've never heard of any financial service doing that. I regularly keep amounts much larger than that in my Wise account and have not received this email or ever had money deducted so seems to only be for EUR accounts for now. Hopefully they don't expand it.

Jspanese banks did thst before i think

[Moonlover]

2 hours ago, Stocky said:

As maybe, but they hold your money in their accounts in other banks, not their bank - they're money movers not bankers.

If you look up the Wise account sort code 23-14-70, you'll find that its assigned to TransferWise Limited in London. So I don't think your statement is true. TransferWise does still exist by the way. Wise is only a trading name.

[fdsa]

I don't know which exactly BINs Transferwise uses now but I've googled a bit and found these three BINs: 535240 537434 535713

 

 

 

- so yes, they are registered as a bank.

 

The last BIN is some secret bank which is not revealed in the "free" version of bindb.com, and other online databases show empty line for the "Issuing bank" field. I suppose it is a freshly registered bank so it haven't got into the global BIN databases yet.

 

If you have a card from Transferwise and it has another number you could check it here: https://www.bindb.com/bin-database

[dj230]

lol what? why would anyone hold money in wise with a negative interest rate? 

[EricTh]

2 hours ago, lkn said:

There is no fee transferring money into your Wise account. There is however a fee when you transfer it out of your account, but this somewhat matches the fee for doing a cross-border transfer.

 

As for using the debit card: Yes, there is a percentage added to the rate (for foreign currency), for me this has averaged out to be 0.44% compared to the ECB rate for the same day, which is much less than most of banks, and no-one will give you the ECB rate, as that is the mid-rate.

I still don't see any advantage in having a Wise account versus transferring to their bank account only when we want to transfer which can be done pretty quick online.

 

[lkn]

1 hour ago, EricTh said:

I still don't see any advantage in having a Wise account versus transferring to their bank account only when we want to transfer which can be done pretty quick online.

You can get a debit card associated with your Wise account, that way, you can just use that card for expenses when traveling, and enjoy the better exchange rate (without needing a local bank account).

 

Also, as it is a multi-currency account, you can accept USD, EUR, JPY, etc. on your Wise account and keep them in that currency. Of course this is mainly if you know that you will need to spend the money later — e.g. I have expenses in USD and I also receive some income in USD, but I no longer have a US bank account, so I could in theory just use Wise for that.

 

Though these days I use Revolut for this stuff, since it is a real bank and has some other advantages, plus slightly better exchange rate on pretty much all but THB.

[fdsa]

12 hours ago, lkn said:

Though these days I use Revolut for this stuff, since it is a real bank

although both Revolut and Transferwise are registered as banks, they both are not "real" banks but more like EMIs - electronic money institutions.

 

@GrandPapillon  might elaborate more as he seems to work in that field.

Edited June 20, 2022 by fdsa

[Stocky]

55 minutes ago, fdsa said:

Transferwise are registered as banks

Wise isn't registered as a bank, it's a FinCEN registered money services business. Revolut is a bank and FSCS registered.

[EricTh]

13 hours ago, lkn said:

You can get a debit card associated with your Wise account, that way, you can just use that card for expenses when traveling, and enjoy the better exchange rate (without needing a local bank account).

 

Also, as it is a multi-currency account, you can accept USD, EUR, JPY, etc. on your Wise account and keep them in that currency. Of course this is mainly if you know that you will need to spend the money later — e.g. I have expenses in USD and I also receive some income in USD, but I no longer have a US bank account, so I could in theory just use Wise for that.

 

Though these days I use Revolut for this stuff, since it is a real bank and has some other advantages, plus slightly better exchange rate on pretty much all but THB.

 

So theoretically, we can put any foreign currency in this account except that it doesn't earn any interest. 

 

It is possible to transfer Thai baht from a Thai bank to a Wise account since Wise doesn't allow us to transfer directly out of Thailand?

 

 

 

[FriendlyFarang]

5 minutes ago, EricTh said:

 

So theoretically, we can put any foreign currency in this account except that it doesn't earn any interest. 

 

It is possible to transfer Thai baht from a Thai bank to a Wise account since Wise doesn't allow us to transfer directly out of Thailand?

 

 

 

You can't transfer Thai Baht to wise

If you scroll down on this page it tells you which currencies you can hold: https://wise.com/gb/multi-currency-account/

[EricTh]

3 minutes ago, FriendlyFarang said:

You can't transfer Thai Baht to wise

If you scroll down on this page it tells you which currencies you can hold: https://wise.com/gb/multi-currency-account/

Once we transfer Thai baht to Wise, can we use that money to transfer to a bank outside Thailand? I don't think so.

 

[sandyf]

19 hours ago, EricTh said:

What are the advantages of having a Wise multi currency account versus putting it in a bank?

If you do not have any foreign currency bills and don't travel, probably none.

I have some internet services I pay in EUR and USD and that is a lot easier and quicker with Wise than using my normal bank.

The Wise contactless card is a godsend when travelling, just top up regularly and if it gets lost or stolen there is limited liability.

On the way back last week my flight was altered and I had to spend about 4 hours at Vienna rather than original hour and a half. Checked the card balance, a bit low so topped up and it was off to the bar, the deli and duty free.

If I don't tell my normal bank where I am they have blocked the transaction in the past and locked the card, not a worry any more.