Mexico Forum

cancunkid
Joined 2021
Posts: 446

2 years ago

Sending wires (from Schwab)

2 years ago

A topic Yellowtail did not address was wire transfers. Those are an entirely different story than ATM and charge card transactions.

When sending a wire, Schwab offers 3 options: US domestic wire in dollars (to another US bank account), foreign wire in dollars, and wire in fixed foreign currency.

When I send a wire using 'fixed foreign currency' from the US to Mexico (using Schwab) I specify the exact amount of pesos I want delivered, and Schwab tells me what the exchange rate is and how much my account will be debited in dollars.

They do this over the phone. I usually start the request online with the web interface, and that's where I enter all the details and make the choice of 'fixed foreign currency. If I send a wire using this method they always call me to confirm details and have me accept the exchange rate before putting the transaction through.

So far, banks I've sent to in Mexico have not deducted a 'receive wire fee' for any wires I've sent. Every time the recipient has gotten the pesos they expect.

On the other hand, the second choice on the wire menu is to send dollars. There you specify the exact amount of dollars your account will be debited, and schwab sends them to the other bank. It's the other bank that determines the exchange rate, and you are totally at their mercy. (And you aren't their customer, and they have no motivation not to screw you to the max). One time I made a very costly mistake by using this method, and the receiving bank set an exchange rate a full 2 pesos below the market rate on a very large wire. Never again.

Always send fixed foreign currency.

I just happened to do a wire today because I'm buying a used car. I sent an even quarter million pesos, and the rate Schwab gave me over the phone was 19.7729. That's a little bad, I was hoping for something closer to 20. But today's rate quoted by the VISA calculator yellowtail posted was 19.80, so pretty close to 'wholesale'.

If you end up buying property (or cars) in mexico, you will be sending large amounts by wire, so the exchange rates will matter. For those transactions, I've been pretty happy with the rates I got from Schwab.

Another thing with wires has to do with the wire fee. Schwab's is only $15 for a foreign wire, a 3rd of my other bank. And because I have an IRA with them with a certain balance, most of the time they refund that fee. I get I think 3 free wires per quarter, but I'm not sure of the exact details - either the number of wires or the minimum balance across all accounts necessary to qualify.

I will just say if you have a 401k at a company you retired from, and the investment options aren't great, consider rolling that money into a Schwab IRA before you move to Mexico (while you still have a US address).

I keep the bulk of my funds in the US, and only wire about US$5000 at a time to my Mexican account. That way I always stay below the FINRE reporting limit of $10,000 in combined foreign accounts. That's also why I was wiring the money for the car direct from the US rather than first to my Mexican bank account and then paying locally - it would have been over the reporting limit and I'd have to do an extra form next year at tax time.

The extra FINRE form is not supposed to be a huge hassle, but I've not done them before, and I'm trying to avoid 'qualifying' for that level of US govt oversight.

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