Since I start to use ToledoTrade, I have to fund the brokerage account with USD. Thus, I was looking for the cheapest way to transfer USD from Malaysia to US. In the process, I have engaged three service providers, namely Alliance Bank, InstaReM and Maybank. However, InstaReM is unable to transfer fund into virtual bank account. ToledoTrade told me that InstaReM is not a supported method of transfer. So, only Alliance Bank and Maybank remain as the options. In this article, I will share my experience of using these two banks.
Alliance Bank
This bank offers two types of online foreign currency account (Alliance XChange Account and Alliance XChange Fixed Deposit). I am going to talk about Alliance XChange Account only (Link) as I use it for my fund transfer. This account offers nine foreign currencies (USD, GBP, AUD, SGD, EUR, JPY, NZD, HKD and CAD). To open an Alliance XChange Account, you need to have an existing account with Alliance Bank. The Alliance XChange Account can only be opened at allianceonline, its personal online banking service and this can only be done through the website, not the mobile app. By the way, make sure your primary account is not an Islamic account as Islamic account is prohibited from opening Alliance XChange Account (which I found out with some troubles).
Some benefits of the Alliance XChange Account include its interest rates, better forex rates and the absence of fee for maintaining this account. I will only talk about USD here. For USD, the interest rate is 1.00% per annum (subject to change). We will receive the interest on a monthly basis. To open an account, the minimum initial deposit is USD 500.
One main disadvantage of this account is that transactions can only be made via allianceonline (website) from 9.30am to 4.30pm on business days only. The foreign exchange rates (Link) are lower during the business hour.
The charges imposed by Alliance Bank for the overseas fund transfer are RM 2.00 (telegraphic transfer) and RM 25.00 (cable charge for USD transfer). These amounts are deducted straight from the Alliance XChange Account (without affecting the final transfer amount), thus they are payable in USD. Furthermore, there is a fee of USD 15.00 charged by the intermediary bank which is deducted from the wired money. Thus, the money received in the recipient account will be lower by USD 15.00.
Maybank
Maybank has a foreign telegraphic transfer service that we can accessed with Maybank2u (website). Unlike Alliance Bank, we do not need another account and can employ existing bank account to use this service. This service has a longer operating hour than Alliance Bank (available from 10am to 6pm on business days only). The service fee is RM 10.00, deducted from the Maybank account. However, as with Alliance Bank, there is a intermediary bank fee, amounting to USD 25.00.
Recommendation
The fund transfer from both Alliance Bank and Maybank can be received in the recipient account by the next working day. Based on the total costs, the cost for Alliance Bank is RM 87.00 while it is RM 110.00 for Maybank (based on an exchange rate of USD 1.00 to RM 4.00). The exchange rates of both banks are similar (less than RM 0.01 difference normally).
I think it is clear that which bank has the upper hand in USD transfer from Malaysia. Thus, I will use Alliance XChange Account to transfer money to my ToledoTrade brokerage account from now on.
Do you know any cheaper alternative for overseas fund transfer? Do let us know in the comments section below.