Banking · Decision Guide
Wise vs Traditional Banks: How They Compare for Expats
Wise and traditional banks serve different purposes, and most expats end up using both. Wise excels at multi-currency accounts, international transfers, and borderless spending. Traditional banks provide local account details, credit products, and official banking relationships that some situations require.
The question isn't which is better—it's understanding what each does well and building a setup that covers your actual needs. Many expats use Wise for international money movement while maintaining a traditional bank account in their country of residence.
Last reviewed: January 2026
Decision-support content for research purposes. Not legal, tax, or financial advice. Verify with official sources.
This page helps you understand when to use Wise vs traditional banks for expat banking needs.
- What Wise does well vs what traditional banks do well
- Situations that require traditional bank accounts
- When Wise can replace traditional banking
- How most expats combine both
- Country-specific considerations
Compare provider options
These are examples, not recommendations. Compare options based on your specific needs.
Side-by-side comparison
High-level differences. Your specific needs determine the right mix.
| Account type | Wise: E-money | Traditional: Bank account Different regulatory categories |
| Multi-currency | Wise: 40+ currencies | Traditional: Usually 1-3 Wise built for multi-currency; banks are local |
| International transfers | Wise: Core strength | Traditional: Often expensive Wise typically 0.4-1%; banks often 3-5%+ with poor rates |
| Local account details | Wise: Limited countries | Traditional: Your residence country Traditional banks provide full local banking |
| Credit products | Wise: None | Traditional: Available Loans, credit cards, overdrafts only from banks |
| Deposit protection | Wise: Safeguarded | Traditional: Insured Different protection mechanisms |
| Physical branches | Wise: None | Traditional: Usually yes Banks offer in-person service |
Key tradeoffs
Important considerations that affect most people in this situation.
Where Wise typically works better
- • International money transfers (transparent, low fees)
- • Holding and converting multiple currencies
- • Spending abroad with competitive rates
- • Receiving payments in foreign currencies
- • Managing money across countries
Where traditional banks work better
- • Local salary deposits and direct debits
- • Credit products (loans, credit cards, mortgages)
- • Official banking relationships for visas/contracts
- • Cash deposits and physical banking needs
- • Building local credit history
E-money vs bank account
Wise is an e-money institution, not a bank, in most countries. This affects deposit protection, regulatory status, and what services it can offer. Traditional banks provide insured deposits (up to limits like €100k in the EU), can offer credit, and are recognized as 'banks' for official purposes. For everyday money management, this distinction may not matter. For large balances, credit needs, or official requirements, it does.
International vs local strength
Wise is optimized for moving money across borders. Traditional banks are optimized for local banking. If you earn in one currency, spend in another, and send money internationally, Wise's strengths align with your needs. If you're settling in one country with local income and local spending, traditional banking covers most of what you need.
Cost structures differ
Wise charges transparent fees per transaction (typically 0.4-1% for transfers). Traditional banks often have monthly fees, hidden exchange rate markups, and international transfer fees that add up to 3-5% or more. For international money movement, Wise is usually cheaper. For basic local banking with no international activity, a traditional account with no monthly fee may cost nothing.
When Wise can handle your needs
Scenarios where Wise may be sufficient as a primary account.
- You receive income in foreign currency — Wise's local account details let you receive payments like a local in 10+ currencies
- You're a digital nomad or frequent traveler — Wise works across borders without the friction of multiple bank accounts
- International transfers are frequent — Wise's per-transaction fees beat traditional bank rates significantly
- You don't need credit products — if you won't need loans, credit cards, or overdrafts, Wise's limitation here doesn't matter
- Your situation is temporary — if you're not settling long-term, Wise's flexibility avoids the hassle of opening and closing local accounts
- You have another bank account as backup — many use Wise as primary while keeping a traditional account elsewhere
When you need a traditional bank
Situations that typically require a traditional bank account.
- Visa requirements — some visas specifically require a local bank account, not an e-money account
- Salary deposits from local employers — some employers only pay to local bank accounts
- Rent payments and direct debits — landlords and utilities may require local bank details
- Credit history — building local credit requires a relationship with a local financial institution
- Loans and mortgages — only traditional banks offer these in most countries
- Large balance protection — bank deposit insurance (like €100k in EU) may matter for significant savings
- Cash deposits — if you receive cash income, you need a bank that accepts deposits
- Official requirements — some contracts, notaries, or government processes require proof of local banking
How most expats combine both
The typical setup uses each for what it does best.
- Wise for receiving — use Wise account details to receive international payments, freelance income, or foreign currency salary
- Traditional bank for local — use local bank for salary (if required), rent, utilities, and building credit history
- Wise for transfers — move money between countries through Wise rather than bank wire transfers
- Wise card for travel — use the Wise card when traveling for competitive exchange rates
- Traditional bank for credit — get credit cards, loans, or overdrafts from the traditional bank
- Transfer between them — move money from Wise to local bank as needed for local spending
Country-specific considerations
Local context affects the balance between Wise and traditional banking.
- Banking bureaucracy — in countries with difficult account opening (Germany, France), Wise provides immediate access while you navigate local bank applications
- Residency requirements — some banks require residency documents you may not have initially; Wise works while you wait
- Local banking quality — in countries with good digital banks (Netherlands, UK), traditional banks may match Wise for daily use
- Currency stability — in countries with volatile currencies, holding funds in stable currencies via Wise may be preferable
- Cash societies — in cash-heavy economies, traditional banking with ATM access matters more
- Direct debit culture — in countries that rely heavily on direct debits (Germany's Lastschrift), local bank accounts are essential
Important limitations of each
What neither does perfectly.
- Wise doesn't offer credit — no loans, credit cards, or overdrafts in most markets
- Wise isn't a bank — regulatory status differs, which matters for some official purposes
- Traditional banks are expensive for international — transfer fees and exchange rate markups add up quickly
- Traditional banks are local — opening accounts in multiple countries means multiple relationships
- Neither is universally accepted — some landlords want local banks; some international clients prefer Wise details
- Support differs — Wise is digital-only; traditional banks have branches but often worse digital experience
Practical opening considerations
Getting started with each option.
- Wise — opens in minutes online, requires ID verification, works before you arrive in a country
- Traditional banks in Europe — often require residence registration, local address, sometimes in-person visits
- Traditional banks vary widely — some countries have easy digital onboarding; others require extensive paperwork
- N26/Revolut as middle ground — digital banks in Europe offer bank accounts with better international features
- Timing matters — Wise can work immediately; traditional banks may take weeks to open
- Documents to prepare — have passport, proof of address, and local ID (NIE, NIF, etc.) ready for traditional banks
Common pitfalls
Issues that frequently catch people off guard in this area.
Common questions
Can Wise be my only account as an expat?
Sometimes. If you're a digital nomad receiving international income and not settling in one place, Wise can work as a primary account. If you're establishing residency, getting local employment, or need credit products, you'll need a traditional bank. Most settled expats use both.
Is my money safe in Wise?
Wise safeguards customer funds as required by e-money regulations. In the UK, this means funds are held in ring-fenced accounts at regulated banks. This isn't the same as bank deposit insurance, but it provides protection. For very large balances, understand the specific safeguarding approach and consider keeping significant savings in insured bank accounts.
Why are traditional bank transfers so expensive?
Traditional banks typically add exchange rate markups (often 2-4% hidden in the rate) plus flat fees for international transfers. This model developed when international transfers were rare. Services like Wise were built specifically to solve this problem with transparent, lower fees.
Should I get a local digital bank instead?
Digital banks like N26 or Bunq in Europe offer a middle ground — they're actual banks (with deposit insurance) but have better international features than traditional banks. They can be a good complement to Wise, providing local banking with less friction. They still won't match Wise for multi-currency and international transfers.
Examples
These are examples of providers in this space, not endorsements. Options, features, and pricing change. Research current offerings before making decisions.
Next steps
Continue your research with these related guides.
Sources & references
Official Sources
- Wise website – Account features and fee structure
- FCA (UK) / Financial regulators – E-money regulation and safeguarding requirements
General References
- Country-specific banking guides – Requirements vary by destination
- Expat forums and communities – Real-world experiences with different setups
Information gathered from these sources as of January 2026. Requirements and procedures may change.