Transfering money from Japan to Interactive Brokers LLC

[chuhai]

New to the forum, but would like to share my experience here with prestia.

The following approach worked for me and may be suitable in some situations. In my case, I have USD sitting in a prestia multi-money account so I wanted to try transferring it to the IB-LLC USD account.

1. Register the intention to send a USD wire transfer from the IB LLC portal. This will provide you with the wire transfer details (basically to citibank on Wall Street).

2. Using prestia online, register the details from 1 as an overseas payee.

3. Wait a few days for the payee to be approved.

4. Set up the transfer at prestia online (transferring from the USD account to the registered payee).

It took one day for the transfer to be completed.

Important note: I have gold status with prestia which means they don't take any fees for the transfer (great). However, the intermediate bank charged 10 USD. (I don't know if that is a fixed fee or varies by amount, but I transferred 5K USD and 4990 appeared in the IB LLC account).

For customers of prestia with gold status, this could be a viable approach if you don't want to ever visit a branch (this can be done entirely online). I believe that prestia has a "free of commission" foreign currency deposit service that basically converts your JPY to USD at fixed amounts every month.

[Telebroker]

Thank you for sharing your experience chuhai! It is good to see that this procedure works completely online.

For customers of prestia with gold status, this could be a viable approach if you don't want to ever visit a branch (this can be done entirely online). I believe that prestia has a "free of commission" foreign currency deposit service that basically converts your JPY to USD at fixed amounts every month.

With respect to your closing sentence, please be aware however, that this convenience comes at a price: Albeit on the surface Prestia's fx conversion may be commission free, it is important to realize that they already make their cut by applying a different exchange rate which will deviate from the bare market-rate in favor of the bank, not the customer. E.g. if the delta were 1 JPY per USD you would quickly pay more than doing the JPY->USD conversion within IB-LLC for the ca. JPY 250 fee.

Thus I think the options I listed in my 03 Jun 2021 19:11 post (and onwards) are still current with the choice of (a) Prestia with paper transfer for free; or (b) SMBC (not Prestia) fully online for JPY 800 fee.

[chuhai]

Thank you Telebroker! Your earlier post is extremely helpful.

it is important to realize that they already make their cut by applying a different exchange rate which will deviate from the bare market-rate in favor of the bank

Let me dig into this a bit more. It's certainly true that Prestia usually applies a very steep commission/spread on currency exchanges (1 yen per USD in both directions I believe).

However, I was talking about a specific product that they call "Foreign Currency Deposit Service". I read the contract for that service and it seems to say that conversion from yen to USD is at prevailing market rates (but the reverse conversion back to yen still has commission). This is still quite a long-winded workaround that lacks some flexibility, but it seems OK for me.

This is the section from the contract:

・No foreign exchange commission is charged when Yen is converted to foreign currency via Foreign
Currency Deposit Service.
・When the converted foreign currency by this Service is reconverted to Yen, the rate (TTB rate) is applied
which includes the foreign exchange commission (up to 1 yen per foreign currency). For more details,
please see the Service Fee List.

[Tkydon]

Let me dig into this a bit more. It's certainly true that Prestia usually applies a very steep commission/spread on currency exchanges (1 yen per USD in both directions I believe).

This is standard for Banks. You may get a better spread at a Broker like Interactive Brokers, and a worse spread at Bureaux de Change and other services such as Credit Cards, Paypall, etc..

However, I was talking about a specific product that they call "Foreign Currency Deposit Service". I read the contract for that service and it seems to say that conversion from yen to USD is at prevailing market rates (but the reverse conversion back to yen still has commission). This is still quite a long-winded workaround that lacks some flexibility, but it seems OK for me.

This is the section from the contract:

・No foreign exchange commission is charged when Yen is converted to foreign currency via Foreign
Currency Deposit Service.
・When the converted foreign currency by this Service is reconverted to Yen, the rate (TTB rate) is applied
which includes the foreign exchange commission (up to 1 yen per foreign currency). For more details,
please see the Service Fee List.

Yes, Foreign Currency Deposit Service deposits are executed at the TTM Mid Rate.

[captainspoke]

Some rate comparisons here, scroll down a little.

https://www.reddit.com/r/JapanFinance/w ... /transfers

[Tkydon]

Some rate comparisons here, scroll down a little.

https://www.reddit.com/r/JapanFinance/w ... /transfers

You'll find that these percentages change as the actual exchange rates change

If the TTS-TTM-TTB Spread is Y1 each way, then the Y1 as a percentage of the TTS, TTM, or TTB will be different, and will vary as the rates rise or fall.

At 99-100-101 the Y1 corresponds to 1.01%, 1% and 0.99% respectively.
At 109-110-111 the Y1 corresponds to 0.9174%, 0.909% and 0.9009% respectively.
At 119-120-121 the Y1 corresponds to 0.8403%, 0.8333% and 0.8264% respectively.
At 129-130-131 the Y1 corresponds to 0.7752%, 0.7692% and 0.7633% respectively.

So the spreads as percentages get better as the Yen weakens

[captainspoke]

...
If the TTS-TTM-TTB Spread is Y1 each way,
...

Attached is SonyBank from a few minutes ago: ¥0.15 each way. I looked at Shinsei, too--fractionally more than Sony, very much in line with the JapanFinance wiki referenced above.

And, tho I realize it was for illustration, if a bank is charging ¥1 each way, find a new bank--you're being ripped off. (tho for smaller amounts, convenience may be a factor)

[bCola]

Have any US expats run into trouble after transferring money from Japan to Interactive Brokers LLC. IB is supposed to be US-Expat friendly, but just how friendly I don't know. I think they might wish to cancel or transfer the the account to Japan (fear of FATCA compliance, I guess), once they learn funds originate from my Japan account. Any fellow US expats have direct experience on this matter?