“Far more money has been lost by investors trying to anticipate corrections, than lost in the corrections themselves.”-Peter Lynch
I am a strong believer of low cost ETFs investment. As for Malaysians and other Asians especially the Indonesians and Thais , funding your Interactive Brokers(IBKR) account can be the pain in the as*.
As a faithful Boglehead ETFs investor, I send money regularly to my IBKR account to purchase only three ETFs in my portfolio- VUSD, VWRD and IGLO. I explained in my previous posts the reasons why Asians especially Malaysians and Singaporeans should opt for Irish-domiciled ETFs.
I also talk about the reasons why you should be using third party money transfer such as Wise or Instarem to fund your IBKR account. By using the service, you save money while converting MYR to USD.
Pitfalls of Using Wise or Instarem
However, there are two problems using third party money transfer to fund your IBKR account.
Problem 1: Occasionally you might receive an email like this,
According to IBKR, customers are discouraged from using third party deposit such as Wise and Instarem. Therefore if you transfer MYR to USD using Wise or Instarem to fund your IBKR account, you will receive the above ‘love letter’ eventually from them.
Don’t panic, just email to IBKR all the necessary documents . The receipts of your transfers are easily available from Wise and Instarem websites.
The issue can be resolved immediately after submissions of all necessary documents. However, IBKR will advise you against using third party transfer.
I am still using Wise to fund my IBKR account up to this very moment. I am happy to receive this type of email again soon.
Problem 2: You can’t access the fund immediately
Once the money arrives in your IBKR account from Wise or Instarem, you are unable to access the fund immediately. It takes 5-7 days before you can use the money. I doubt that IBKR might need to do some background check and trace the origin of the fund before allowing you to use them.
It can be very frustrating to see your money sits inside the account for days.
The Fastest Way to Send Money to IBKR
As a long time reader of this blog, you all know that I encourage readers to open a Singapore bank account. I explained to you the advantages of having such account in term of money transfer. It is easy to transfer back your money from IBKR to Malaysia via a Singapore account too. You can read the post HERE.
I have tried many times recently to fund IBKR via a multi-currency account in Singapore. The process is easy and of course Free of charge!
Basically the process is the same as outlined HERE. The only difference is I am using Wise to convert MYR to USD and send the money to my Singapore multi currency account (USD account).
I get the money (USD) within hours ( 1-2 hours) in my DBS account. After that, I transfer the money to IBKR US account ( the recipient bank is JPMorgan Chase bank) using DBS overseas remit.
The best thing is I can use the money for trading immediately.
Conclusion
It might be a wise step for you to open a Singapore account if you are serious about all these money matters while investing in index funds.
Hi Dr Goh, what is your thought of funding IBKR with SGD (recipient bank is Citibank Singapore) by using Wise?
Dear Kane,
Yes, it is a good idea too, the only problem is you have to convert SGD to USD ( or other currencies) in IBKR platform in order to buy your desired ETFs. Even though the conversion rate is good, there is a small fee involved. If you have a multicurrency account in Citi Singapore, why don’t you use Wise to convert MYR to USD and send to your Citi in Singapore? After that, remit your USD in Citi Singapore to IBKR in US, I think this method might save you extra 1-2 dollars per transaction.
Hi Dr Goh, sounds like a better plan if get to save more. Does it work the same with the multicurrency account Eg. HSBC Malaysia or it has to be an account in SG?
Dear Kane M Dom,
Sorry for the late reply. I have been busy in the hospital for the last few weeks. Yes, I think it will work if you have a HSBC multicurrency account in Malaysia and I think RHB bank also offers multicurrency account. You can read more here https://www.rhbgroup.com/personal/deposits/multi-currency-account/overview/index.html . I will appreciate if you can try to use Wise to convert MYR to USD and send to your HSBC multicurrency account and then use the USD to fund the IBKR, please share your experience here.