As promised, I would like to share with you about funding your Interactive Brokers (IB) using MYR ( Malaysian Ringgit). If you are a beginner and want to learn about the way of investing in ETFs, I would suggest you read my previous posts on asset allocation and Index Fund Investing Made Easy.
I have successfully made 3 USD transfers to IB so far. Just found out today IB US recipient bank has been changed from Citibank to JP Morgan.
If you haven’t opened a foreign brokerage account to buy your ETFs, I would suggest doing so. I use Interactive Brokers(IB) and find the commissions are too attractive to ignore.
You can’t fund IB directly using MYR
Unfortunately for Malaysians, you can’t directly fund your IB account using MYR, you have two options here,
- Transfer your money in a local bank to USD and send your money to IB US account in USD
- Use an intermediate account ( online money transfer) such as TransferWise ( Wise ) or InstaReM to convert MYR to USD and send over to IB.
I have touched on the way to transfer MYR to SGD via TransferWise or InstaReM and send the money to IB Singapore account in Singapore. You can read more HERE.
But we are going to invest in USD-denominated ETFs listed on London Stock Exchange, if we convert MYR to SGD ( via TransferWise) and then to USD ( in IB platform), basically there are two conversions involved and the cost would be higher than one conversion.
How to do it using your MYR
Log into your IB account and choose USD transfer and you can try USD100 transfer first.
You will see the next screen as below,
Log in to your TransferWise
Log in to your TransferWise account and put 100 in the USD column and you will know much you need to transfer, in this case, it is MYR423.21 ( including transaction cost of MYR6.76).
The next page will be as below,
Because I have made transfers before, so there were two previous IB accounts here, one IB account belongs to Citibank (old account number), and one is JP Morgan (new IB recipient bank). For you, if this is your first time, you have to choose new recipient and the entity of IB is Business/Charity .
Key in all the details as below, IB US account is a checking account.
You would be asked about the reason for the transfer. Remember to put in your IB account number during the final step.( Red Arrow)
Last Step of Transfer
Log in to your Malaysian online banking and transfer the money ( MYR 423.21) to TransferWise OCBC account in Malaysia and remember to put down your Transferwise membership number.
My previous three transfers took about 5-7 days to appear in my IB account. Even though IB acknowledges the receipt of the fund within 2-3 working days, you till need to wait a few more days before you can use the money. This might be due to some extra security checks by IB before the fund is made available.
If you fund your IB using SGD using FAST transfer, it will appear in your IB account within hours. Therefore most of the time, I still use TransferWise to convert my MYR to SGD and send the fund to my Singapore bank account.
Conclusion
Most of the time, I convert MYR to SGD via TransferWise and send the money to my Singapore account since I also need SGD to buy Singapore stocks.
The whole purpose of involving intermediate online money transfer ( TransferWise or InstaReM ) is because the exchange rate is much more competitive compared to local banks.
* I get some commissions if you clicks on the links above and finally transfer some money using TransferWise or InstaReM.
Addendum ( 5/3/2021): TransferWise has changed its name to Wise recently and its recipient bank in Malaysia is JP Morgan instead of OCBC.
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Hello Dr. Goh. I confirm that your method works. Thank you.
Please teach how to withdraw money from IB into Maybank Malaysia using Transferwise.
Dear Anaz,
It is great to hear that you managed to send MYR to IB as well. I have been buying my ETFs and never sold a single time. I will try next time to sell and send some money back to Malaysia and let you know. But don’t worry, friends around me have been buying and selling and they told me it is pretty easy to withdraw money from IB to our Malaysian accounts.
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Hi, currently interactive broker is using VAN number which inclusive alphabet in their bank account number, is it possible to transfer deposit/withdraw money with transferwise on this ? I’ve tried and it failed, and I couldnt create an account number without an alphabet in it for wire transfer, can u help ?
Dear Hema,
I know about your predicament. If you are given a IBKR bank account of 4xxxxxUyyyy to bank in your money, you must understand that the first portion of the virtual account number is the bank account (4xxxx) and the second portion is your IBKR trading account number (Uyyyy). When you want to transfer USD via TransferWise to USA, you just need to put in 4xxxx as IBKR US account number and Uyyyy as the reference number. It should go through. My recipient bank for IBKR in US is JP Morgan and I believe you are given Citi NA as the recipient bank.
Hope this helps.
I’ve tried this option but then the transaction didn’t went through from transferwise to IBKR. When I called to transferwise SG customer service and enquire on this, I was told that such bank account number which has non-numeric value would not work and I couldn’t enter even part of the account number as it wont be recognized in the system.
I only receive bank account number with non-numeric value (called as Virtual Account Number/VAN) if I chose to create deposit bank account with USD currency, however when I create deposit account with SGD currency I receive bank account with digit only from IBKR.
I’ve initiate a refund with transferwise currently as per their customer representative advice from transferwise and its going through.
I’m planning to transfer money with SGD currency from my SGD bank account using transferwise to SGD IBKR account. Lets see how it goes. I’m in the midst of changing my base currency to SGD and would do this after this being approved.
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Hi, I have used instarem to convert into SGD and transferred the money into IBKR account. It is also seen on the account as SGD but I would have to convert it into USD to trade but when I try to use the currency converter there would be a popup saying “Requires additional trading permissions”. Would you have any idea on what seems to be the problem?
Dear Ian,
You need to go to your account setting to tick forex trading. This will allow you to convert currency.
Hello Dr Goh,
I have been using this method for the past 3 months and can confirm that it works, just takes a little while for IB to allow the use of the transferred funds as you have mentioned. Typically for me it takes 1 business day for acknowledgement of receipt of the funds, and 4 more business days for funds to be available for trading. So thank you very much for providing this detailed step-by-step guide for us Malaysians!
My question right now is that Transferwise has very recently announced that they are changing their name to Wise. They have sent me an email regarding this matter and it is also stated on their website. In that case, do we have to change the ‘Sending Institution’ ‘Bank Name’ to ‘Wise’ (for the first first step)?
Dear Marcus,
I do not think it is necessary, I will let you know because I transfer to IBKR using TransferWise 2x every month, if there is any problem, I will update it in my blog. Thanks.
Alright I hope so as their customer service still has not responded to my inquiry on this matter. Please do let us know if any changes need to be made. Thank you!
Dear Marcus Wong,
I have made another transfer using Transferwise to IBKR without changing any particulars. The only thing to take note of is now Transferwise (Wise) recipient bank in Malaysia is JP Morgan and not OCBC.
Hello Doc.
Like you i can confirm the same where my CIMB to Wise to IBKR only cost my RM11 vs CIMB straight to IBKR at USD20. My only issue is that the speed for Wise route takes long for my liking (5 full working days) vs CIMB’s direct route of overnight transfer to US.
Have you found cheap yet fast route? Eg HSBC or any American bank which can easily transfer to their US-based bank and then to IBKR?
Am trying out HSBC’s Everybody Global route. Will update if any.
Dear Adi,
So far I still find the TransferWise way the cheapest but as you said, you need to wait 5-7 days before the fund is available in your account for trading. I am not sure about HSBC premier Global account, it might be a faster way but I doubt the exchange rate would be as competitive as TransferWise (Wise). Another pretty fast way would be transfer your SGD ( provided you have a Singapore bank account) to IBKR account in Singapore using FAST and convert SGD to USD in IBKR. You only need to wait for 1-2 hours for the fund to appear in your IBKR ( in SGD) and after converting to USD, you can start trading straightaway.
Has anyone tried using HSBC Everyday Global to transfer USD from Malaysia to IBKR (US)?
Dear TC,
I have not tried using this method. You can try and share your experience here. Thanks
Hello Doc,
I would like to ask is that we able to transfer SGD from IBKR to Malaysia Bank? Is that the step is same as transferring USD from IBKR to Malaysia Bank?
Thanks.
Dear Terence Siow,
I have tried before withdrawing SGD back to a Singapore bank. Unless you have a multicurrency account in Malaysia which supports SGD, you can’t withdraw SGD to a Malaysia bank and keep the money in SGD, the bank will automatically convert your SGD to MYR with conversion fee and transaction cost, so eventually you lose out! So my advice to you, open an account in SGD or a multicurrency account in Malaysia and keep the money in SGD.
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