I talked about how to use Wise ( previously TransferWise) to fund your IBKR account HERE and HERE. Long ago, I found that the exchange rate was always slightly better for Wise than Instarem. Therefore, I encourage my readers to use Wise to fund their brokerage accounts (IBKR) to buy their desired ETFs.
Recently due to Instarem referral program, I accumulated some points (InstaPoints) in my account and by using these points ( 400 points max per transaction which translates to MYR24), the exchange rate is even better than Wise.
How to use instarem to fund IBKR from Malaysia? Today, I would like to guide you step-by-step how to transfer MYR to USD via Instarem. Remember that it is quite similar to Wise, once your money is in your IBKR account, you need to wait about 5-7 days before it is available for trading.
Step 1: Set up Instarem Transfer in IBKR
Log into your IBKR account and click on deposit fund to start the process. You need to inform IBKR you want to use Instarem to transfer money to IBKR in USD. The recipient bank for IBKR in US is JPMorgan Chase bank.
Fill up Instarem as your sending institution as below. I plan to send USD 3000.
You will be given the banking details for your transfer. The receiving end for IBKR fund in US is JPMorgan Chase bank and the bank account number is 633736902.
Step 2: Log into your Instarem
Now you have to log into your Instarem account and start the transfer. First of all, you have to set up IBKR as one of your recipient as below, ACH number for JPMorgan Chase bank is 021000021. I have filled up the account number of IBKR as 633736902.
Once you have set up the recipient details, IBKR will appear as one of your recipients as shown below, you can fill up the amount of USD you want to transfer.
The very important detail to fill up during the transfer is your IBKR account number as showed in red arrow ( My IBKR account number is U3XXXXXX)
As you can see above, to get USD 3000, I need to transfer MYR 12540.83, but I redeem my 400 InstaPoints. That saves me MYR24 immediately.
After this Instarem will prompt you to log in to your bank to transfer the money. You can click on history to check your transfer status. Usually it takes about 12-24 hours before you get notification about the completion of the process.
Step 3: Log into your IBKR account account
Voila! Just log in to your IBKR account to see the status of your transfer, you can see the status of my fund as below,
Even though the fund was received on 6/7/2021, it is only available for trading on 12/7/2021 ( after 6 days).
Wise or Instarem?
So, which is better? Wise or Instarem to fund your IBKR account? If you use Wise, you can lock in the exchange rate for 24-48 hours ( depending on weekday or weekend) and transfer the money later. Therefore what I usually do is I will initiate a transfer to lock in a certain exchange rate and to see whether the rate is better or not the next day before deciding to tranfer the money or not.
As for Instarem, you have to transfer the fund once you start the process of transfer and the exchange rate is locked in during the process. You can’t wait for 24-48 hours to decide whether you want to transfer the money or not and the exchange rate is locked in only during the process of transfer.
To be fair to Wise, I always notice the exchange rate is slightly better ( cheaper MYR 1-3 per transaction when I transfer USD3000) but by using InstaPoints, Instarem seems to a cheaper option now. For normal users who do not participate in their referral programs, you can get InstaPoints every time you make transfers in Instarem.
When I joined Wise two years ago, they still offered borderless accounts to Malaysians. Wise gives virtual multiple countries accounts to Malaysians, I can receive multiple currencies ( SGD, Euro, USD, Swiss Franc, GBP etc) in my Wise virtual accounts. However new users using Wise are no longer offered this added advantage.
Conclusion
Whether it is Wise or Instarem, it is always cheaper to fund your foreign brokerage account using this method than direct transfer from your bank. Local banks charge exorbitant fees to convert your hard-earned MYR to any currency with inflated exchange rate. They suck you dry as well with hidden transaction fees.
My advice to you, if you really love Malaysian banks, buy their shares but never let them handle your money!!
#I would suggest you to use Interactive Brokers to buy your desired ETFs, starting from July 2021, IBKR will no longer charge inactivity fee of USD 10 per month for portfolio less than USD 100k.
#When you click on the links above, I might make some money from IBKR, Wise and Instarem referral programs, thanks for giving me some free coffee money but no worry, I only buy cheap coffee from Kopitiam.
I Dr Goh, Is my first time sending fund to activate my IBKR account, how much should i send? Appreciate your respond, Thank you
Dear Leong,
There is no minimal amount but due to transaction cost, I don’t see any point if you plan to transfer only small amount.
Hi Dr Goh;
Thanks for your above sharing;for few questions need your help;
-is transfer wise or instarem got daily transfer limit to foreign country?normally malaysia bank daily limit is rm50k
-i am confusing that you mentioned I.B got I.B singapore account , I.B usa account;I.B hong kong account is it when i want to buy particular country shares i just transfer the money to the respective I.B country account?
(i always transfer to I.B usa citibank account)
-For the above I.B singapore account and I.B usa account;I.B hong kong account
where can i get the account number?
-is the normal money transfer flow like this:
maybank malaysia >instarem>i.b singapore/i.b usa/i.b hong kong account
-when get back the money from i.b
i.b>maybank singapore>instarem>maybank malaysia
Appreciate your respond.Have a great weekend
Regards;
Martin
Dear Martin,
Thanks for your letter.
1) Daily limit for both Instarem and Wise is MYR30k.
2) It depends on what currency you want to fund your IBKR. If you want to fund in HKD, IBKR will let you know their IBKR HK account number, if you choose SGD to fund your IKBR, they will let you know their IBKR Singapore account details. I have funded IBKR using my NZD,AUD,HKD and SGD account ( i have a multi-currency account in Singapore). But currently I fund IBKR mainly converting my MYR to USD using Wise or Instarem.
3) You need to choose the currency you want to fund then IBKR will give you the account details.
4) Since I have a multicurrency account in Singapore, I can fund my IBKR in multiple currency using DBS overseas remit and it is free of charge. So basically no need to go through third party account such as Instarem or Wise.
5) Yes, you can do it via instarem or there are many ways to ‘bring back’ your SGD if you need them. For example, you can ask Maybank Singapore to issue you a debit/ATM card and pay using NETs network while buying stuff in Malaysia.
Hi Dr Goh;
Thanks for your replies really appreciate it.
-For the daily limit for instarem and wise RM30k;if ultimate goal is fund in few hundred k usd in i.broker isnt need many times doing the transfer process;got any idea transfer more money to I.broker to avoid so many times of transfer process?
-Dr Goh what is pay using nets network?Rightnow i got the maybank sing debit card thanks for the highlights
-Dr Goh yesterday i just chat with one of my friend he used maybank and hong leong direct transfer each time rm50k to I.broker ;local bank charge rm10;other side charge usd 20-usd 25 seems not that much (rm10+usd25x4.2)/rm50k only 0.23 % any idea?
Besides this 0.23% cost is it the bank currency rate is higher than the instarem and wise ?
Regards;
Martin
Dear Martin,
1) Yes, you have to do many transfers if you plan to fund a few hundred k in USD. I am not sure of other ways.
2) I will talk about NETs in my next post. Quite an easy way to spend your SGD in Malaysia if you have a NETS debit card.
3) I know the transaction cost is low but the exchange rate is lousy, I still think eventually you lose out if you transfer via bank. I might be wrong, you can try to compare the exchange rate yourself. Another way for you to do it is try to do a dual currency investment ( MYR/USD pair) and if the money is converted to USD, you can transfer USD to IBKR.
Hi Dr Goh;
Thanks for the reply and also your upcoming NETs post
For 3) part actually last week i did an experiment transferring the money it is quite interesting here cannot put attachment later i will send it to your personal email
Have a great day
Regards;
Martin
Hi Dr Goh,
I just set up an IBKR account, and I’m ready to fund it.
I have Wise borderless account and I notice IBKR supports ACH funding method.
The issue is if I choose the first funding option, i.e. “Connect Your Bank via ACH”, it will prompt you to enter the credential to connect to a US bank. The traditional ACH connection method (two micro-deposit) is no longer offered in IBKR.
Do you have any idea how to fund using ACH with Wise?
Dear Bryan,
I don’t think you can link Wise borderless US account to IKBR using ACH. You need to have a ‘real’ US account to do this. I have no experience in opening a US bank account but I will try to do this once I can travel to the States again.
Hi Dr Goh,
I tried your process and make two successful transactions. However, Now my transaction has been denied by the IBKR stating instarem is making ACH transfer and I have used bank wire method. They are saying if I have used bank wire method then Instrem must also have sent them money via same method.
Could you please suggest which option to choose on instarem so they will transfer the money to IBKR via Bank Wire?
Regards
Dear Nirjhar Jajodia,
Yes, you are right, now it is getting harder to fund IBKR via a third party account ( such as instarem or wise). Actually, IKBR has been asking clients not to fund their IBKR accounts via a third party account, therefore, you are left with three options at this moment,
1) Fund your IBKR via a Malaysian bank account using TT which is certainly a more expensive option.
2) Open a Singapore account, use Wise or Instarem to fund your Singapore account in SGD ( covert MYR to SGD), then log into your Singapore account online and fund your IBKR in SGD. After that, convert SGD to any currency you want ( USD,HKD,GBP) in IBKR platform.
3) Open a Singapore multicurrency account ( which includes USD), use Instarem ( Wise charges higher fee to transfer USD to a non-US bank account) to convert MYR to USD and send to Singapore, then log into your Singapore bank online and transfer USD to IBKR.
Hope the information helps.
Hi Dr Goh,
I recently tried to fund my IBKR following the steps you listed above, but my transaction was denied twice. When I asked Instarem what had happened, this was their response to me:
“We noticed that the intended beneficiary is Interactive Brokers LLC for the transaction. To send funds to a trading account, it’s essential that the remitter’s name (your name) reflect into the beneficiary’s bank account for them to credit the funds in your name.
However, when we process transactions to such accounts, our name reflects in their bank statement instead of the remitter’s which is why the beneficiary rejects the payment.
As a result, the funds are returned by the beneficiary bank and a refund is then processed. It’s advisable not to send funds through this method to such accounts.”
I’m not sure if this was the case for most recently but I thought that if funding IBKR directly via MYR isn’t feasible any more (I read the comments section and noticed Jajodia has similar issues) then perhaps it would be great if you could update the article? Just in case anyone else faces the same issues like mine.
Oh and the US IBKR beneficiary bank for me was Citibank instead of JP Morgan – although I’m not sure why there is such a difference, but perhaps you could update that in your article too?
Lastly, I’d just like to find out if this issue is mine alone? Or are you still able to fund your IBKR with MYR directly via Instarem or Wise? Would appreciate it if I could hear from you.
Cheers and thank you again for writing this step-by-step, detailed guide for us – it’s my Instarem holy bible!
Dear Wong,
Thanks for your feedback. I know about the possible difficulty to transfer fund to IBKR US using Wise or Instarem at this moment. I will update my posts soon. I got the same problems a few months ago and the funds managed to go through after I submitted all the relevant documents.
However, for the last 2 months, I have been using Wise and Instarem to transfer money to my Singapore bank account and then use my Singapore account to fund IBKR Singapore in Sing dollar. When I want to buy my ETFs, I convert SGD to USD in IBKR platform ( currency conversion), therefore I strongly suggest you to open a Singapore bank account. You can open a Singapore CIMB account easily, read the post HERE.
The recipient bank for IBKR in US can be Citi or JP Morgan, it is OK.
Dear Dr. Goh,
Thank you so much for the reply! Will do! I’m trying to use Wise for a transfer now, not sure if it would get rejected again but I’ll stay hopeful. Otherwise, will just open an SGD account like you suggested. Thanks again Dr. Goh!
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