Your TransferWise borderless account is an electronic money account. It’s different from a bank account because:
- you won’t be able to get an overdraft or loan
- you won’t earn interest on your account
- although your bank details are unique, they don’t represent real bank accounts, but simply “addresses” for your electronic money account. You can still use them to receive payments though, like a real bank account
- your money is protected and safeguarded, but not guaranteed by the Financial Services Compensation Scheme (FSCS) that you may get with a bank account
The main benefit of using your TransferWise borderless account over traditional accounts is that you won’t be charged international transaction fees or outrageous exchange rates.
You can send, receive and convert currencies all in one account. You’ll always get the real exchange rate and the lowest possible fees.
You can also spend the money in your borderless account around the world with your TransferWise debit Mastercard.
How the Borderless Account works : Transferwise
The Borderless Account, which is free to open, essentially provides four sets of international bank details from a single platform.
It allows you to receive, send, spend and convert money in one account at the official exchange rate (the one you see on Google), which may be particularly appealing if you’re living in one country, but are paid in the currency of another.
When you open an account, you’ll get a bright green contactless Mastercard debit card and be issued with:
A UK account number and sort code
A European International Bank Account Number (IBAN)
An Australian account number and Bank State Branch (BSB) code
A United States account number and routing number
With these ‘local’ bank details, you can get paid euros, pounds, Australian dollars and American dollars without a fee.
You can manage all the accounts via the app or through the online dashboard.
What are the costs for spending, moving and withdrawing money?
You won’t have to pay to receive and spend money in the local currency for each account. So, if you’re paid in dollars, you can spend in the US free of charge.
If you spend in any currency (there are over 40 to choose from) other than the one you’re holding – say, if you deposited US dollars and spend in pounds – the amount will be converted at the interbank rate, plus a conversion fee.
The conversion fee varies depending on the currency you want to spend in, but ranges from 0.35% to 5%. You can check the conversion fee rates here.
If you want to send money to another bank account in a different currency, there is a fixed fee plus the conversion fee. If you are transferring money out of your account in the same currency, you only pay the fixed fee.
The fixed fee is fairly low. For a transaction in pounds sterling, for example, you’ll pay 50p.
The Borderless Account also offers fee-free cash withdrawals with the debit card on up to £200 each month, but there’s a 2% fee if you exceed this limit.
How much will I save on international transactions?
Each time you try to move money abroad with a high street bank, you generally face an inflated exchange rate and a whole host of fees.
Transferwise says that the Borderless Account allows people to send and spend money at the real interbank exchange rate and offers cheaper conversion fees compared to high street banks.
The firm commissioned Consumer Intelligence to analyse how the account compares to Lloyds Bank, Barclays, Santander and NatWest. The table below sets out the costs to send, spend and withdraw £200 in euros with the four UK banks.
Can this replace opening a bank account abroad?
The TransferWise Borderless Account is an electronic money account, so might not be suitable to completely replace your bank account at home or abroad.
It doesn’t offer an overdraft, there’s no interest on balances and you won’t be able to set up direct debits or standing orders for your bills.
While the bank details are unique, and allow you to hold money, they don’t represent a real bank account. So you may not, for example, be able to use it as proof of residence and you won’t be able to go into a branch.
The main benefit over traditional accounts is that you won’t be charged inflated exchange rates and the transfer fees are fixed.
Is my money protected?
The Transferwise Borderless Account is not covered under the Financial Services Compensation Scheme.
However, as it’s an authorised Electronic Money institution regulated by the Financial Conduct Authority in the UK, the firm must stick to strict rules to keep customer money safe.
This means all money is ring-fenced in a separate bank account, so if TransferWise were to go bust, you would get your money back.
How safe are purchases?
TransferWise says that payments made with the debit card are covered by Mastercard’s chargeback scheme.
Is the account good for cheap travel money?
If you’re looking for a cheaper way to spend on your holidays, the account may not be your best option.
While TransferWise offers a near-perfect exchange rate, it also charges a conversion fee.
By contrast, many specialist travel credit cards or prepaid cards charge no fees at all. And with some prepaid cards, you can also avoid an ATM fee.
For cheaper ways to spend abroad, take a look at the best travel credit cards and the best prepaid cards.
If you’d prefer to use a debit card, you need to watch out for cash and transaction fees. A number of challenger digital banks, such as Monzo and Starling, also offer fee-free spending abroad at the real mid-market rate.
You can find the cheapest deals using our guide to the best debit cards to use abroad.
Other alternatives for cheap international money transfers
Ipagoo allows you to open accounts in multiple countries and spend with a prepaid debit card.
The accounts offer free internal transfers, incoming transfers from the Single European Payment Area (SEPA) and three free international transfers each month.
But, each account you open and each prepaid debit card you hold will attract a monthly fee and there are additional fees for actions like cash withdrawals.
With Revolut, you can open a UK and European account that comes with a prepaid debit card, which allows you get £200/€200 of free cash withdrawals globally per month. You can also transfer 25 currencies at the real exchange rate.
Premium customers also get access to disposable virtual bank