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How to get best possible rate when wiring large amount from Europe to Dubai?

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PinkCat

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Dec 20, 2022
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#1
I have to wire about $1M USD to Dubai for real estate deal.
The real estate developer provided me Dubai bank account in AED. I have the money as USD in swiss private bank.

What would be the best way to wire them as to not loose to much on the exchange rate?
As far as I know AED is pegged to the US dollar and rate should be fixed, but my first test wire (for small amount) seems to have been auto converted by the receiving bank at about 1% worse rate than the fixed one.
 
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#3
Sols said:
Easiest is to negotiate a rate with your bank, so that they send AED rather than USD to the recipient.
Click to expand...
Exactly. (Both @Sols and I presume that your Swiss bank operates with AED without any obstacles, as it is expectable.)
And generally, you will (or at least can) always obtain better rate from the institution where you are the customer, not the other party.
Sols said:
You could look into services like TransferMate or XE.com, but the amount of paperwork may not be worth it for a one-off transaction.
Click to expand...
Do you have in mind that @PinkCat as – probably – a new customer of XE/TransferMate/Moneycorp etc. wanting to transfer 1M out of the blue will probably face obstacles really difficult to cope? (Yes, may be...)
Because the profit from the exchange rate difference of a 1M transfer would not be negligible...
 
#6
Forester said:
Do you have in mind that @PinkCat as – probably – a new customer of XE/TransferMate/Moneycorp etc. wanting to transfer 1M out of the blue will probably face obstacles really difficult to cope? (Yes, may be...)
Because the profit from the exchange rate difference of a 1M transfer would not be negligible...
Click to expand...
Not insurmountable, but I was more just comparing sending from existing bank (no paperwork) vs establishing a new relationship with a new financial service provider (sending money to a high-risk jurisdiction).
 
#8
I will probably ask for custom rate at my bank as advised here but out of curiosity how would it work with IBKR? I wire USD to IBKR convert it to AED and wire back to my bank or?
From my short google about them they are not a bank but a broker and I suppose I can't wire to 3rd parties with them like with a bank?
 
#9
PinkCat said:
I will probably ask for custom rate at my bank as advised here but out of curiosity how would it work with IBKR? I wire USD to IBKR convert it to AED and wire back to my bank or?
From my short google about them they are not a bank but a broker and I suppose I can't wire to 3rd parties with them like with a bank?
Click to expand...
wire in your USD, swap for AED on the broker platform, then wire the AED out to your AED bank account (if you have one, if not how are you going to get a manager's cheque in AED as I believe is required for most transaction?), from there you wire/cheque the AED to your recipient.
 
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#10
stronco said:
IBKR can be useful for such occasions.
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Not a bad idea, really.
Sols said:
Not insurmountable, but I was more just comparing sending from existing bank (no paperwork) vs establishing a new relationship with a new financial service provider (sending money to a high-risk jurisdiction).
Click to expand...
Yes, I understand your point.
Luxxxtino said:
wire in your USD, swap for AED on the broker platform, then wire the AED out to your AED bank account (if you have one, if not how are you going to get a manager's cheque in AED as I believe is required for most transaction?), from there you wire/cheque the AED to your recipient.
Click to expand...
Exactly...
 
#11
PinkCat said:
I will probably ask for custom rate at my bank as advised here but out of curiosity how would it work with IBKR? I wire USD to IBKR convert it to AED and wire back to my bank or?
From my short google about them they are not a bank but a broker and I suppose I can't wire to 3rd parties with them like with a bank?
Click to expand...
IBKR has favorable currency exchange rates and I read on reddit that some people use it strictly for currency conversion, however this is a broker not currency exchange site and if you use it this way it could result in your IBKR account being closed, especially considering the amount. Maybe you should just buy some big etf and sell after 3 days and cash out AED ?
 
#14
PinkCat said:
I have to wire about $1M USD to Dubai for real estate deal.
The real estate developer provided me Dubai bank account in AED. I have the money as USD in swiss private bank.

What would be the best way to wire them as to not loose to much on the exchange rate?
As far as I know AED is pegged to the US dollar and rate should be fixed, but my first test wire (for small amount) seems to have been auto converted by the receiving bank at about 1% worse rate than the fixed one.
Click to expand...

IBKR
 
#15
wellington said:
Isn't AED like pegged to the $?
Why not Stablecoin (lot of them accept reportedly).
Click to expand...
it is but seems they still cut you with the rate for some reason
sadly this developer doesn't accept stablecoin, otherwise that would have been my first choice.


wiring 1M to IBKR and then back in AED seems like too much hassle, you have 2 more wires back and forth and on top of that the added risk IBKR to freeze my money for some time....
 
#16
PinkCat said:
wiring 1M to IBKR and then back in AED seems like too much hassle, you have 2 more wires back and forth and on top of that the added risk IBKR to freeze my money for some time....
Click to expand...
There's always a possibility of this happening with your first transaction involving this amount of money, especially nowadays. Thinking about all the obstacles beforehand is always a good idea. On one hand you can save money with a better exchange rate and on the other hand you might lose access to your money for an unspecified period of time. Think and decide for yourself if it's worth it, or not.
 
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#17
PinkCat said:
I have to wire about $1M USD to Dubai for real estate deal.
The real estate developer provided me Dubai bank account in AED. I have the money as USD in swiss private bank.

What would be the best way to wire them as to not loose to much on the exchange rate?
As far as I know AED is pegged to the US dollar and rate should be fixed, but my first test wire (for small amount) seems to have been auto converted by the receiving bank at about 1% worse rate than the fixed one.
Click to expand...
Cut a deal with your OWN Swiss bank for them to wire AED xor take the "loss".
Going another route will create frictional costs and endanger your funds. Others (banks, FI, compliance, etc) may freeze your funds and you'll need to hire an attorney...it's human nature for them to try to wrap you up in "law & justice" and extract as much as they can for you! Do NOT add ANY unknown variables to your current equation! You already know the values of x and y. Do NOT add additional unknown variables (other banks, exchanges, lawyers etc etc).

It's a Dog-Eat-Dog World! stupi#21
 
#20
PinkCat said:
wiring 1M to IBKR and then back in AED seems like too much hassle, you have 2 more wires back and forth and on top of that the added risk IBKR to freeze my money for some time....
Click to expand...
It seems a great option, in theory, for someone who uses IBKR on a regular basis, but not for one-off conversion for someone who doesn't even have an account with them yet I wouldn't recommend it.
I've seen these guys freeze the account even for 100 EUR test cash out. You must respond to monkeys asking: "Why do you want to cash out?" as it's not apparent to them that you want your money back that you first deposited to the platform.
IBKR is still a great platform in general but use it wisely.
 
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