This is a post for all those of you who don’t have a US-based bank account but work online and receive payments via PayPal.
At some point, you will want to transfer your PayPal funds to your local bank account so you can withdraw and use your hard-earned money.
However, you could be making a fundamental mistake during the process of withdrawal. Actually, I’ve been doing it myself for many years. I felt really dumb when I realized.
By the way, did you know that you can now buy Bitcoin and cryptos with your PayPal account on Coinbase and eToro? Read my guide to buying crypto with PayPal to find out how.
As you know, exchange rates are always fluctuating, so your aim is to get the best deal when transferring money from PayPal to your bank account.
Let’s say we want to transfer US dollars to Euro, which is what I do every so often. What I do nowadays is to first check the exchange rate, and also historical rates via this website. That gives me an idea if today is a good day to make the transfer or not. Looking back at the historical rates of the past 3 months, I then decide on a target rate I want to aim for. At present my target rate is 1 USD = 0.78 EUR.

Historical exchange rates
With that figure in mind, I then head over to XE and set up email alerts. Now as soon as the exchange rate climbs to 0.78 I will immediately get an email and that’s when I will make my withdrawal from my PayPal account to my local bank account.

Setting up email alerts for my desired conversion rate
When2convert is an excellent service in my opinion, because it automates the whole thing and makes it very easy for me. Before I used to check the exchange rates every couple of days (every day is just too tedious), and sometimes I used to miss a good day. So I knew I need an automated shortcut of doing this checking. Luckily I found this site, and I hope you find it useful too.
Update: I found a similar tool (also free) at https://www.specificfeeds.com/Free-Forex-Signal-and-Exchange-Rate-Tracker and there you can not only define strike prices, but you can select to get updated every time the EUR/USD rate changes by 0.02 points or so, so that it’s not a one-time notification, but you always know if there have been significant changes without spending too much time to checking it every couple of days.
Another option is to just withdraw every month on a specific day, and in this way you eliminate the hassle of trying to time the forex market to your benefit. You might lose out sometimes, but it might be more important for you to have money coming in on a regular basis, so you have to factor in the pros and cons.
Do you have any other related tips you’d like to share? Let me know in the comments section below!
Note: If you have any questions after reading this and the several other articles relating to PayPal on this site, please leave a comment or contact PayPal directly. Unfortunately, due to time constraints, I am unable to offer any advice over email so all emails related to PayPal will remain unanswered.
This method does not work. If you want the best rate from PayPal looking at real time rates on any app/website or elsewhere only tells part of the story. You have to actually watch the PayPal exchange rate as well which does NOT follow actual rates. In fact the Payl exhange rate is only periodically updated. I’m trying to figure that one out. At this point it appears they may update their rate once or twice a day but I am verifying that myself.
Use this method instead: watch for actual rates to rise on your favorite app then watch for PayPal rates to update to follow the rise. PayPal charges 4%. If the actual exchange rate rises and the difference between the posted rate and PayPal’s current rate is more than 4% then you are really being hosed. If PayPal’s rate is only update once or twice a day at least wait till it’s closer to 4% or you are being taken to the cleaners. If the actual rate is on an upswing at least wait till PayPal catches up and updates their rate to get the best actual rate.
I noticed that neither of the sites mentioned in the article are working today.
So today I found this tool on the site of Transferwise. I also offers email alerts.
https://transferwise.com/tools/exchange-rate-alerts/
Let’s see if it works in the coming weeks.
Could any one tell me how my russian friend can send me money…i live in india and my friend is from russia. He is confused how can he ll convert money into indian currency through paypal. We both dont know about this app. I just made a account.
hello!
im searching in google if is possible change the balance of my paypal in usd to EUR im spanish and sell in dollars but nothing only can do that with the conversion of paypal to buy if possible choose different conversion but to sell not…
maybe im confuse but do you know that info?
thanks!!
Great post, I was wondering why my balance is kept in USD even though i’m in Euro zone.
Thanks. Works for me (in Australia) 🙂
Still the same “Question” Is there any alternate to the Pay pal for India.(While receiving payments from Canada)
I’ve heard people mention Payoneer for cases like yours, but I’m not an expert on that.
Hi, thanks for your article – its a clever way to make sure you’re not getting ripped off.
I have a specific problem, and I was wondering if you or anyone else could help…
I receive payments from a foreign client in British pounds and usually convert to USD when accepting payment. Thereafter I withdraw the money to my South African bank account (which means another fee to convert it to South African rands). Should I rather keep the funds in the currency they were sent in? Does that mean no conversion is done until I choose to do so?
Any advice would be greatly appreciated.
Lars
If you are using PayPal then yes I’d keep them in GBP and only convert them to South African rands when I want to.
Thank you for advice
Wow great tool! The problem I have is that the 3 month currency conversion ($ to £) looks to be at a high right now of .62 but paypal is only paying .60 today. So is the tool then useless if paypal doesn’t match the current exchange rate?
Read my other post about PayPal exchange rates, PayPal are usually not the best place to have your conversions happen, and I’ve found a way around that.
And that way around is?^^
Check out my latest update on this subject https://jeangalea.com/changing-paypal-withdrawal-currency/
Is there any way to just work my way around their horrendous exchange rates? I want to withdraw $582 but I’m losing $17 just because of their outdated rates.
My money is converted into rupees.
PayPal charge me double. Why?
Just fir trying paypal I order some thing that cost 1 us dollars = 60 INR but they charge me 120 INR.
That means 2 dollar. Can anyone tell me why?
Wonderful info! Thank you.
But uhho… PayPal has only auto-withdrawal for India… 🙁
guys, leave PayPal and move to TranferWise whenever you can.
They are really two services with different uses. PayPal is most commonly used for accepting payments online, and there isn’t an easier service than that at the moment.
That was good. Wish it worked here in India as according to rules here, we have to transfer PayPal balance to bank account within 7 days of receiving money or else PayPal will automatically transfer it on the last day at whatever the exchange rate is then. PayPal is already ripping me off a lot of my money with their ridiculous exchange rates..
I do withdraw USD to EUR just above 100 € so to avoid the 1 EUR fee.
This morning the exchange rate, according to major sites was like this:
$ 138 = € 101.6646
but paypal calculate like this:
$ 138 = €98,89 EUR, and still wanted the 1 EUR fee.
Isn’t this called stealing?
It is. I am wondering, aren’t there alternatives? paypal is becoming so widely used and I don’t understand why when the fees are such. does it mean people don’t see the “price” of the service? no one else can compete?
Paypal have established a footprint so large that it’s hard for anyone else to compete. However there are other ways of accepting payments which are growing more and more popular every day. Check out Stripe, PayMill, 2CheckOut, Avangate.
Awesome tip!! thank you very much mate. I was going to withdraw a couple of minutes ago but smth stopped me this time. I started to google and found your article. Just what the doctor ordered. 🙂
For 2 years, I’ve been transferring USD to Czech Crowns every time I get paid from my freelancing gigs without a second thought. Of course, waiting for the opportune moment to withdraw money is ultimately a bit of a gamble, but this info will likely earn me quite a few extra beers per month. Thanks for the info. 🙂
I’ll be sure to join you for a few beers then when I visit the Czech Republic 😉
thanks for the tip jean 🙂 really useful!
Welcome Matthew!
That’s something I should really do but I just keep the money in USD and then convert it to GBP when I withdraw the money. PayPal’s fees are ridiculous though. I hate the idea of them ripping me off at the conversion stage, especially after taking off a hefty fee.
I was actually referring to the stage of withdrawing the money, where PayPal does not actually charge a fee (as far as I know). Are you referring to occasions when you pay someone in another currency rather than what you have in your account? I keep most of mine in USD too, then they get automatically converted when I withdraw to my bank account.
I’d be interested in some further advice on this matter if you’re still watching this board as of 2015 and the new PayPal changes…
I keep my USD PayPal payments in a USD balance and convert when withdrawing to my (GBP) bank account. However, on doing so, PayPal then converts my balance to GBP itself automatically on withdrawal and applies the same extra 2.5% conversion rate to its exchange rates that it would when converting in any other manner. I’d love my bank to handle the conversion but PayPal refuses to allow me to withdraw USD to a British bank account. I even considered setting my account up as a USD account so that I could handle conversion manually, but apparently, when PayPal is asked to withdraw in USD to a USD account in Britain, it nonsensically converts the currency TO GBP and then converts it BACK again, basically just so it can levy the charges multiple times. So can you think of any way around this?
Well this is exactly what I asked Paypal to change for me and they did it without any problem. It seems to be an arbitrary decision though, depending on who the support tech on the other end is. It could also be that they got newer instructions from above to stop making these exceptions.