The Complete Guide to Transferring Money from Israel to Spain: Options, Costs, and Key Tips

Transferring Money from Israel to Spain? Here's What You Need to Know

Transferring money from Israel to Spain sounds simple, but the truth is that there are quite a few ways to do it — some can save you money, time, and headaches, and others... less so. Whether you're transferring money for a business, family, or just a small investment, this guide will show you exactly how to do it properly, without paying unnecessary fees or getting confused along the way. Here's everything you need to know.

Options for Money Transfers

1. Traditional Bank Transfer

A bank transfer is the classic method for moving money between Israel and Spain, using SWIFT or SEPA systems (for transfers within the EU).

Advantages:

• High Security: An organized and internationally secured process.

• Detailed Documentation: Especially suitable for businesses or large transfers requiring full records.

Disadvantages:

• High Fees: You pay fees twice — by the sending bank and the receiving bank.

• Involvement of an Intermediate Bank: Often, when there's no direct relationship between banks, an intermediary bank is involved, adding fees and delays.

What is an Intermediate Bank?

An intermediate bank is a third-party bank that acts as a bridge between the sending and receiving banks, mainly when there’s no direct connection between them.

How does it work?

• The sending bank transfers the money to the intermediate bank.

• The intermediate bank transfers the money to the receiving bank.

Disadvantages of an Intermediate Bank:

• Additional Fees: The intermediary charges an extra fee.

• Delays: Involving a middleman may extend the transfer time.

• Lack of Transparency: It’s often unclear which banks are involved and what the final cost will be.

How to Handle Intermediate Banks:

• Make sure all intermediary bank details are correctly provided.

• Check with your bank in advance about potential fees.

• Request a tracking number to monitor the transfer status.

2. Online Money Transfer Services (PayPal, Wise, Revolut)

Platforms like Wise, Revolut, and PayPal offer faster, simpler, and often cheaper solutions for transferring money from Israel to Spain.

Advantages:

• Speed: Money arrives within a few hours, sometimes even minutes.

• Competitive Exchange Rates: Much better than traditional banks.

• User-Friendly: Very easy to make transfers via app or website.

Disadvantages:

• Amount Limits: You can't always transfer large sums at once.

• Documentation and Monitoring: You may need to provide additional information about the source of funds.

3. Using the IBKR (Interactive Brokers) Platform https://www.interactivebrokers.com

Interactive Brokers is a securities trading platform that also offers very low-cost international money transfers. It’s suitable for those who already have an active trading account.

How does it work?

• Deposit money into your IBKR account.

• Convert the money into euros through IBKR at attractive exchange rates.

• Transfer the money directly to your Spanish bank account.

Advantages:

• Very Low Fees: Much cheaper than traditional bank transfers.

• Excellent Exchange Rates: Very close to the interbank market rate.

Disadvantages:

• Requires an Active Account: Available only to those with an active trading account.

• Initial Complexity: Setting up and verifying an account can take time.

4. Dedicated Money Transfer Services

Covercy https://www.covercy.comCovercy is a specialized international money transfer service, mainly for businesses and large sums. It offers highly competitive exchange rates with low and transparent fees, making it ideal for companies involved in international trade, supplier payments, or transfers between accounts in different countries. An additional advantage is their personalized support, especially for complex transactions.

Similar Services:

• Currencies Direct: Good for large transfers, offering personal advice and excellent rates, especially for businesses or private individuals making significant purchases, like overseas real estate.

• OFX: Focuses on large transfers with personal support, no fixed fees, but may require a minimum transfer amount.

• Key Currency: Offers similar solutions with an emphasis on personal service and excellent exchange rates for large transactions.

Advantages:

• Customized and Cheaper Exchange Rates compared to general services.

• Professional Support for businesses and large transactions.

• Fee Transparency.

Disadvantages:

• Less Cost-Effective for Small Transfers.

• Longer Processing Times sometimes, especially with complex transactions.

5. Other Options

There are many other platforms that offer money transfer and currency conversion services. The main downside common among them is relatively high transfer costs.These include: Western Union, Remitly, MoneyGram, Xoom, WorldRemit

Costs and Fees

Money transfers involve varying fees, depending on the method you choose:

• Banks: Relatively high fees ($20–$50) + potential intermediary bank fees.

• Online Services: Lower fees (typically 1%-3%).

• Interactive Brokers: Minimal fees and excellent exchange rates.

Important Legal Aspects to Know

• Taxes and Reporting: For large transfers, you may need to report to tax authorities in Israel and Spain.

• Anti-Money Laundering (AML) Compliance: You might be required to provide documents proving the source of funds.

• Banking Regulations Compliance: Make sure the transfer complies with all local and international regulations.

Important Tips

• Compare Costs: Before making a transfer, check all available options and compare fees and exchange rates.

• Monitor Exchange Rates: Small differences can significantly impact the transferred amount.

• Prepare Documents in Advance: Proper documentation can streamline the process, especially for large transfers.

• Double-Check Transfer Details: Make sure all recipient and intermediary bank details are accurate.

In Summary

Whether you choose a traditional bank transfer, an online service, a dedicated provider, or a platform like IBKR, transferring money from Israel to Spain can be simple and efficient if done correctly. Understand your needs, carefully review your options, and don't forget to account for fees, timeframes, and legal requirements.