Five tips and tricks to save you money on your next international money transfer.
Not all international money transfer companies are created equal and with the plethora of options on the market today, it pays to compare services. Check out our handy guide if you’re looking to send money overseas in the near future, for a handful of tips and tricks that will allow you to both avoid the common pitfalls of international money transfers and take advantage of big savings.
Compare your bank with an online money transfer service
Banks have a reputation for offering mediocre exchange rates and charging exorbitant fees (typically between $20 and $100) on international transfers, so even a small transfer can end up costing an arm and a leg. If you’re looking for a more affordable option, it can pay to consider the services provided by a wide range of online money transfer providers like TorFX and WorldRemit. These companies offer quick and affordable transactions to thousands of destinations around the globe, with low fees (typically between $0 and $20) and competitive exchange rates.
Pay a higher fee to get an optimal exchange rate
Be weary of money transfer companies that charge low to no fees but make up the difference in their bottom line by offering less-than-competitive exchange rates. Even a small margin of difference on an exchange rate can cost you hundreds of dollars on a large transfer, often to save a couple of dollars on fees. The golden rule: request a quote from 3 – 4 services (or use our handy comparison table) to find a company that offers a combination of low fees and competitive exchange rates.
Watch out for online calculators
Many of the online calculators displayed on a companies website are based on indicative (or mid-market rates). This means that they use the interbank rate (which is the rate that they trade at), rather than the real rate with their margin of profit applied. If you decide to sign up for an account based on this rate, you could be in for a nasty surprise once you book your transfer, as it could be much more expensive than originally anticipated.
Choose bank-to-bank over cash transfers for flexible timelines
If you’re on a tight timeline, it makes sense to book a cash transfer with a company like Western Union or MoneyGram, which allow you to send money to thousands of agent locations around the world in a matter of minutes. These services ensure fast delivery but are also much more expensive than a dedicated money transfer company. Aim to use a service like TransferWise or World First if you want to save money on exchange rates and fees. These companies can facilitate bank-to-bank transfer in 1 – 3 business days and equal big savings for you and your pocketbook.
Ask about bonus features for best-rate guarantees
Some companies specialize in providing one-off transfers only, but others can offer flexible features such as forward contracts and limit orders which allow you to book a lower exchange rate in advance of your transfer. Other companies may offer stop loss orders, which protect you from worst case scenarios. If the exchange rate drops below a certain level, your trade is executed to prevent further losses.
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