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Sending $1 million overseas
A competitive exchange rate can save you thousands.
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Tips for large transfers
Before sending a large transfer overseas:
- Check transfer limits. Some service providers will limit how much you can send daily or monthly, so choose a provider with a high limit or no limit when sending $1 million overseas.
- Negotiate. Many of the rates quoted by providers may be affected by the amount you’re sending and could be negotiable, especially with larger sums.
- Research tax laws. Each country has their own set of tax laws, and you or your recipient may need to file taxes.
- Research sanctions. If you’re sending money to a country with US-imposed sanctions, contact a professional to help you navigate the rules.
- Understand the risks. Digital money transfer specialists often send billions of dollars a year and are almost always regulated by federal agencies in a variety of countries.
Compare high limit transfer services
Use our table by entering the amount you want to send and where you want to send it. Click Calculate to see live exchange rates based on the amount you entered.
Using a money transfer service
Specialized money transfer companies are typically the cheapest and fastest option for secure overseas transfers. You can also track your money along each step of the transfer, with online and phone support available if you have any questions.
Let’s crunch the numbers: Sending $1,000,000 to Japan
Let’s say you need to send $1,000,000 USD to JPY to family in India. Here’s what you might face as far as fees as of April 24, 2020 with a mid-market rate of 1 USD = 107.45 JPY.
|Digital money transfer service||Bank transfer|
|Fee||$0||$25 + additional correspondent bank fees|
|Exchange rate||1 USD = 107.03 JPY||1 USD = 102.06 JPY|
|Transfer speed||1-2 day||2-5 days|
Using a money transfer service dedicated to large transfers will send almost 5 million more JPY to your recipient than the bank. When comparing the money transfer service to the best possible transfer, a mid-market rate exchange, the rates offered are within 0.5% of one another.
Should I use my local bank?
You can, but it might be pricey. On top of weaker exchange rates and higher fees, you’ll find it typically takes longer for your bank to transfer money internationally. This could be a problem if your money needs to get to its destination by a certain time. Also, your bank may not be able to transfer money to every country.
How important is the exchange rate?
Given the amount of money you’re looking to send, a solid exchange rate is critical. Even minor variances in exchange rates can save — or cost — you thousands of dollars.
For example, if Company A quotes you an exchange rate of 1 USD = 0.880 EUR and Company B quotes you a rate of 1 USD = 0.885 EUR, that half a cent difference adds up to $5,000 on a $1 million transfer.
If you have time on your side, you may want to use a limit order. A limit order allows you to set a target exchange rate with a service or broker, which monitors the rates 24/7 to make sure you don’t miss it. Once exchange rates meet your target, the service or broker will contact you to complete the transfer.
Money transfer fees
Money transfer providers charge fees to increase profits and make up for the time they spend filling out reports for international transfers, such as currency transaction and Know Your Customer reports.
Some fee-free transfer providers make up that money with less favorable exchange rates, which can cost you more when you’re sending a large transfer.
Taxes on foreign accounts
In addition to filing traditional income tax statements, US citizens with bank accounts offshore must complete a Report of Foreign Bank and Financial Accounts (FBAR) by April 15 of each year that an overseas account held $10,000 or more at any point in time. The rules stipulate this requirement even if the account has a lower balance by the year’s end.
This means that if you transfer a large sum of money overseas — even if it’s invested shortly after — it needs to be reported to the IRS. Penalties for not complying, whether by accident or on purpose, are significant. Those who mistakenly fail to report can expect fines of up to 5% of the asset value involved. For those who wait until an investigation is launched, the penalty increases to up to 50%.
US residents are also required to report worldwide income, including from foreign accounts and investments. You may need to factor this in when thinking about offshore businesses or properties.
Additional tax and legal considerations
Sending $1 million or more overseas may require additional planning in some situations. When dealing with complicated situations or countries with additional requirements, contact a lawyer or tax professional.
- Property requirements
Some countries will require you to own property in that country in order to open an offshore account or holding company. That can mean significant additional costs — not just for the purchase of a residence, but also for the legal or account registration fees that may be required for setting up the holding company.
- Accidental tax evasion
Offshore trusts, foundations or businesses can provide a way to restructure ownership of assets in the case of lawsuits or debt issues at home, making them an attractive option to protect individual assets from seizure. However, you can end up in serious legal trouble if you don’t file the proper tax forms.
- Gift taxes
If you send $15,000 or more as a gift to someone other than a spouse, you’ll need to file a gift tax return. Depending on which country your recipient is in, they may also be required to file or pay gift taxes.
If you’re sending $1 million or more overseas, even a small difference in the exchange rate can add up to thousands of dollars. Compare international money transfer providers to make sure you’re getting the best deal.
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