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====== Issue 2020 - November ======

===== Learning by failing - banks, transfers and foreign currency =====

Short version - be careful and beware of fees. If unsure, check with your bank. That's why you pay them.

Following may not apply to you. As a matter of fact, I'd be surprised if it was common nowadays, in 2020 that is. It's entirely possible it applies only to the specific bank institution since quite a lot of banks have either no fees at all or negligible ones. Anyway, here is a model situation I was curious about, kind of. We have two bank accounts in foreign currency(in this particular case USD). Bank accounts are in the same country, but operated by different bank institution.

Fist option is to transfer money in the same way as you'd transfer domestic currency and that's totally fine. The only problem here is that foreign currency will be converted to domestic currency and you're given an estimate of that conversion. But the other account is in the same foreign currency and I want either precise or close enough amount on receiving side. In other words, you don't know(I don't) how much money you will end up with at the other account due to conversion from foreign currency to domestic and then another conversion from domestic currency to foreign.

Second option is to transfer money like you'd to another country. This actually is suggested option by the bank itself for this, my, specific case. And rightly so. What seemed like a good idea turned out as not one of those. Why? Because despite this isn't international transfer(after all, bank accounts are in the same country), it's still international transfer and as a such standard fees for international transfers apply. Fee for international transfer is(in this particular case and bank institution) either 250 CZK(roughly 11 USD at the time of writing) or 1% from the transferred amount. Note that the same is applied at receiving end - billed fee 7 USD. Brilliant! This is ok-ish for larger sums of money, but not for pennies. Sadly, SEPA doesn't apply, because SEPA is only for EUR. Go EU, but to be honest, that's a major improvement from what it used to be. Also, it must be noted that I've been warned "by the bank" that correct and exact name, address, ZIP code and size of shoes must be provided when dealing with transfers in USD, otherwise there is a risk of transfer being rejected. Pure joy!

To sum this up at least a bit. SEPA is only for transfers in EUR, not a flat-rate "I'm in EU, therefore it applies", because it doesn't. International transfer is not optimal for transferring pennies around. Sadly, I don't know how the first option would turn out, therefore it's hard to judge whether it would be better option or not. Accounts located and operated within same country don't mean transfers are by definition free or cheap - it depends and varies.