Sending Money to and from Iceland

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How to send money to and from Iceland

Moving to Iceland means moving your money too. The Icelandic króna (ISK) is one of the world's smallest freely traded currencies, and that creates real costs when sending money to Iceland internationally. The difference between a good transfer method and a bad one can easily run into tens of thousands of krónur on a single transaction, so picking the right service matters from day one.

Why sending money to Iceland costs more than you expect

International money transfers involve two costs: the transfer fee itself and the exchange rate markup. Banks and transfer services advertise the fee prominently but bury the markup in a less favourable exchange rate. On a small currency like the króna, that markup tends to be larger than on major currencies like the euro or US dollar.

A traditional bank wire from the US to Iceland can cost 3% or more of the transfer amount once you add the sender's fee, any intermediary bank fees, the receiving bank's fee, and the exchange rate spread. On a 10,000 USD transfer, that is 300 USD lost to friction. Specialist transfer services cut that cost dramatically.

Transfer methods compared

Wise (formerly TransferWise)

Wise is the most commonly recommended service for sending money to Iceland, and for good reason. It uses the mid-market exchange rate (the same rate you see on Google) with zero markup, then charges a transparent percentage-based fee.

Fees typically run 0.41% to 0.6% depending on your payment method and the currency pair. Sending 10,000 USD to Iceland costs roughly 41 to 60 USD in fees, with no hidden exchange rate spread on top. Most transfers arrive within hours, and Wise reports that most payments arrive in under 20 seconds.

Wise also offers a multi-currency account and debit card, which is useful during the transition period before you have an Icelandic bank account. You can hold ISK in the account and spend directly without conversion fees.

Revolut

Revolut supports ISK transfers but charges more than Wise for most users. Standard plan holders pay a 21 USD flat fee per transfer plus a 0.2% exchange rate markup. An additional 1% markup applies on weekends when currency markets are closed.

Premium and Metal plan subscribers get reduced or waived markups, which can make Revolut competitive if you already pay for a higher-tier plan. For occasional transfers on the Standard plan, however, Wise is typically cheaper.

Revolut's main advantage is convenience if you already use it as your daily banking app. You can hold multiple currencies and convert between them inside the app.

Bank wire transfers (SWIFT)

Traditional bank-to-bank transfers via the SWIFT network are the most expensive option for most people. A typical international wire involves three separate fees: the sending bank's outgoing fee (15 to 50 USD), possible intermediary bank fees (15 to 50 USD), and the receiving Icelandic bank's incoming fee.

On top of those fees, banks apply their own exchange rate, which is almost always worse than the mid-market rate. The total cost of a 10,000 USD bank wire to Iceland commonly reaches 1.5% to 3% or more of the transfer amount.

Bank wires still make sense in two situations: when your employer pays your salary via SWIFT (the fees are theirs, not yours), or when you need a direct bank-to-bank paper trail for legal or property transactions.

Western Union

Western Union operates in Iceland and offers both cash pickup and bank deposit options. Fees vary by amount, origin country, and payment method. The service is most useful for sending smaller amounts quickly, particularly to recipients who do not have an Icelandic bank account yet.

For larger relocation-related transfers, Wise or a bank wire will almost always be cheaper. Western Union's exchange rates include a built-in markup that increases the effective cost beyond the stated fee.

Other services

OFX charges no transfer fee for amounts over 10,000 USD (or equivalent) and a flat fee below that threshold. It makes its margin on the exchange rate, with an average markup of roughly 0.53%. OFX can be competitive for large one-off transfers like moving savings from a property sale.

Remitly supports transfers to Iceland with variable fees depending on amount, speed, and payment method. Exchange rate markups typically run 1% to 3.7% above the mid-market rate, making it more expensive than Wise for most transfers.

What you need to receive money in Iceland

To receive an international transfer into an Icelandic bank account, you need two things: your IBAN (International Bank Account Number) and your bank's SWIFT/BIC code.

Icelandic IBANs are 26 characters long and start with "IS" followed by two check digits. The remaining digits encode your bank, account type, account number, and a 10-digit identification number (typically your kennitala, Iceland's national ID number). You can find your full IBAN in your bank's online banking portal or mobile app.

The SWIFT codes for Iceland's three main banks are:

You will need a kennitala and a residence permit (for non-EEA/EFTA citizens) before you can open an Icelandic bank account. Our bank account guide walks through the process. Until your account is set up, a Wise multi-currency account or Revolut account can serve as a bridge for receiving funds.

Sending money out of Iceland

Sending money from Iceland works much the same way in reverse. All three major Icelandic banks support outgoing SWIFT transfers through their online banking platforms. Landsbankinn's international payments page details the process for their customers.

Wise and Revolut also work for outgoing transfers from Iceland. If you hold ISK in a Wise account, you can convert and send to over 80 countries at mid-market rates. This is particularly useful for freelancers invoicing clients abroad or for sending money to family in your home country.

Capital controls and regulations

Iceland imposed strict capital controls after the 2008 financial crisis. Those controls have been almost entirely lifted. The Central Bank of Iceland took further steps in January 2026 to ease remaining currency restrictions, allowing foreign currency inflows for new investments and outflows for future investments.

For anyone moving to Iceland and transferring personal savings or receiving salary from abroad, the remaining restrictions are unlikely to affect you. Standard relocation transfers, salary payments, and family support transfers all flow freely.

When making large transfers, your bank (on either end) may ask you to state the purpose of the transfer. This is a standard anti-money-laundering requirement, not a capital control. Common categories include "relocation expenses," "salary," or "property purchase." Keep documentation of the transfer purpose in case questions arise later.

Tax implications of incoming transfers

Not every transfer into your Icelandic bank account is taxable, but some are. The distinction depends on what the money represents.

Salary and freelance income from abroad is taxable in Iceland if you are a tax resident. You become a tax resident after spending 183 days or more in Iceland within any 12-month period. Once tax-resident, you owe Icelandic income tax on worldwide income, including earnings paid into foreign accounts. The Icelandic tax authority (Skatturinn) explains tax residency rules in detail.

Your own savings transferred from a foreign bank account to your Icelandic account are not taxable. You already paid tax on that money when you earned it. Keep records showing the source of funds in case of questions during tax filing.

Gifts are handled under general income tax principles. Iceland does not have a separate gift tax. Gifts received on occasions (birthdays, weddings) may be exempt if the amount is considered normal for the occasion. The Skatturinn gifts page covers the exemptions. For large gifts, consult an Icelandic tax advisor.

Property sale proceeds from selling a home abroad are generally not taxable in Iceland if you owned and lived in the property. Transfer the funds with clear documentation of the sale.

For a broader overview of how the Icelandic tax system works, see our tax system guide.

Practical tips for relocators

Before you move

Open a Wise account and verify your identity. This gives you a way to hold and convert ISK before you have an Icelandic bank account. You can also receive funds via Wise's account details if someone needs to send you money for initial expenses.

For the initial big transfer

If you are moving significant savings (from selling property, for example), compare quotes from Wise and OFX. Even a 0.2% difference in exchange rate matters on a 50,000 USD transfer. Monitor the ISK exchange rate for a week or two before transferring. The króna moves roughly 0.5% to 0.6% weekly against the dollar, so timing can save or cost you a meaningful amount.

For ongoing transfers

Set up a recurring transfer through Wise if you receive regular income from abroad. This automates the process and locks in the mid-market rate at the time of each transfer.

Keep records

Save confirmation emails and transaction receipts for every international transfer. You will need these during Icelandic tax filing season, which runs each spring (filing opens in March, with assessment finalized by early summer). Pre-drafted tax returns arrive from Skatturinn, but transfers from abroad may require explanation.

Use ISK for daily life

Iceland is almost entirely cashless, and card payments convert automatically if you use an Icelandic bank card. Paying with a foreign card adds conversion fees (typically 1% to 3%). Get your Icelandic bank account and card set up as soon as possible. Our cost of living guide covers what you will be spending on.

For a full overview of the relocation process, including banking and finances, see our moving to Iceland guide.

Frequently asked questions

What is the cheapest way to send money to Iceland?

For most people, Wise offers the lowest total cost. It charges 0.41% to 0.6% with no exchange rate markup. On a 5,000 USD transfer, that is roughly 20 to 30 USD. Bank wires from major US or European banks typically cost three to five times more once exchange rate markups are included.

Can I send money to Iceland before I have a bank account there?

Yes. You can receive money into a Wise multi-currency account using their ISK account details, or into a Revolut account. Neither requires an Icelandic kennitala or residence permit. Once you open an Icelandic bank account, you can transfer the funds locally.

Are there still capital controls in Iceland?

The capital controls imposed after the 2008 crisis have been almost entirely lifted. The Central Bank of Iceland continued easing restrictions through January 2026. Standard transfers for relocation, salary, savings, and family support are not restricted.

Do I have to pay tax on money I transfer to Iceland?

It depends on the source. Transferring your own savings is not a taxable event. Salary and freelance income earned abroad is taxable once you become an Icelandic tax resident (183+ days in Iceland). Gifts may be exempt if they are normal for the occasion. Consult Skatturinn or a tax advisor for large or unusual transfers.

How long does an international transfer to Iceland take?

Wise transfers typically arrive within hours, with many completing in under a minute. Bank wire transfers via SWIFT usually take one to three business days. Western Union cash pickups can be available within minutes.

What information do I need to send money to someone in Iceland?

You need the recipient's full name, their IBAN (26 characters, starting with "IS"), and their bank's SWIFT/BIC code. For Landsbankinn the code is NBIIISRE, for Íslandsbanki it is GLITISRE, and for Arion Bank it is ESJAISRE.

Last updated: March 2026