Want to save money when you send funds overseas? Use a specialist money transfer service and shop around for the best exchange rate you can find.
International money transfers are great for sending money home to provide support for family overseas or sending urgent funds to the other side of the world to help out a cash-strapped friend who’s run out of money on an international holiday.
One of the most important aspects of sending such a transfer is finding the best available exchange rate. Finding a great rate is essential to ensuring that you get value for money and that more of the cash ends up in your recipient’s pocket rather than in the hands of the company that handles your transaction.
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An exchange rate shows the value of one currency when compared to another. You’ll most likely have seen it mentioned on the nightly news bulletin or in the finance section of a news website or newspaper, when the value of one US Dollar is shown in comparison to other currencies like the Euro, the Japanese Yen and the British Pound.
The exchange rate can be influenced by a wide range of factors including interest rates, consumer confidence, inflation, political stability and more. For example, if interest rates in a particular country were to rise, investors would be able to achieve better returns in that country and demand for that country’s currency would increase. This would then drive the value of that currency upwards.
There are two main ways in which exchange rates can impact the lives of everyday Americans. The first way is in the cost of everyday goods you buy – if they were purchased from overseas by the retailer or constructed using foreign materials then the exchange rate will obviously affect how much they cost you.
The second way is much more direct: when you travel overseas, send money overseas, or purchase goods directly from overseas, exchange rates affect how much your US Dollars are worth. This article focuses on exchange rates and how they affect you when you are sending money overseas.
When you’re sending an international money transfer, finding the best exchange rate is crucial.
Say for example that you’re sending USD $1,000 to Germany and you want the highest possible amount of Euros to arrive into your beneficiary’s German bank account. While 1 US Dollar might be worth 87 Euro cents with Transfer Company A, Transfer Company B may offer you an exchange rate of 89 Euro cents for every US Dollar you transfer. Two cents might not sound like a lot, but when you multiply it by the $1,000 you want to send you end up with an extra 20 Euros for your recipient if you send the funds via Transfer Company B.
So how can you find the best exchange rate for your international money transfer? Check out the following tips:
For an accurate idea of how good a money transfer company’s rates are, you’ll need to know how the market is performing at that point in time. Foreign currency specialists like xe.com offer live rates and currency conversion tools to help you check the value of a huge variety of currency pairs at any given time.
Obtain quotes from a range of money transfer companies to see which one offers a better deal. Many companies will allow you to do this quickly and easily online, and their quote should include any fees attached to the transfer to give you a better idea of how much your transaction will cost.
Banks can offer secure and convenient international transfers but they don’t offer value for money. In fact, banks offer some of the lowest exchange rates you’ll find when comparing money transfer providers, so look elsewhere for a better deal.
Many transfer companies will offer ‘exchange rate calculators’ on their website, but exercise caution when using these. Many such calculators will display the inter-bank rate (the rate at which banks buy and sell currency to each other) rather than the rate the provider offers to its customers. Read the fine print to determine which rate your provider displays.
Some transfer companies will offer flexible features to allow you to take advantage of fluctuating exchange rates. For example, taking out a forward contract allows you to lock in the current exchange rate for a transfer that will be placed days, weeks, or even months into the future. Another option is placing a limit order, which allows you to place a transfer request that will only be executed when specified market conditions are met – such as the exchange rate reaching a certain level.
If you regularly need to place transactions featuring some commonly traded currencies, perhaps a multi-currency bank account could offer better exchange rates and lower fees. Also referred to as foreign currency accounts, these allow you to hold funds in multiple currencies, meaning you can convert them into USD at a time when the rate suits you.
Some companies offer better exchange rates and lower or even zero transfer fees when you send a large amount – so sending $10,000 in one hit instead of 10 separate transfers of $1,000 each could save you a whole lot of dough.Back to top
Western Union, MoneyGram, and Ria all offer money transfers to hundreds of countries around the world. The funds you send can then be collected as cash at hundreds of thousands of agent locations spread across the globe.
If you want to find the best exchange rates, in many cases you will be able to get them from an online money transfer company. Providers like WorldRemit, Payza, Xoom, HiFX, USForex and many more can usually offer higher exchange rates than you’ll be able to find elsewhere. Some companies even have other features to help you save money, such as USForex which doesn’t charge any transfer fees when you send more than $5,000.
Many people are also unaware that if you’re sending a transfer of less than $200, PayPal can help. The digital payments giant offers international transfers to a long list of countries around the world, but as its transfer fees are calculated based on the amount you send it is better used for small transfers only.Back to top
|1 USD = Euros||0.8342 EUR||0.8694 EUR||0.8573 EUR||0.87859 EUR|
|1 USD = British Pounds||0.6144 GBP||0.6323 GBP||0.6312 GBP||0.64453 GBP|
|1 USD = Mexican Pesos||16.3811 MXN||16.47 MXN||16.357 MXN||16.48709 MXN|
|1 USD = Indian Rupees||66.2606 INR||66.17 INR||66.00 INR||65.54978 INR|
|1 USD = Canadian Dollars||1.2762 CAD||1.3066 CAD||1.2918 CAD||1.3061 CAD|
Rates accurate as of 16/09/2015
As you can see, while some companies offer better exchange rates for some currencies, for example WorldRemit with EUR, GBP and MXN, others could offer slightly better rates for different currencies. It’s also worth noting that this table doesn’t take into account transfer fees and that the exchange rates for MoneyGram and Ria are only for cash pickup services through these providers.
How can I find a trusted online money transfer provider?
You can find a trusted and reputable provider by comparing the features, fees, and exchange rates of money transfer companies listed at finder.com.
How much are transfer fees?
International transfer fee vary substantially depending on the transfer provider you choose, your transfer method, where you are sending your money, how much money you send, and your payment method. As a general guide, fees can range from a few dollars up to $80 or even higher.
How come banks offer lower exchange rates than money transfer companies?
Unlike banks, which deal in a wide range of financial products and services, money transfer companies concentrate their efforts solely on sending money overseas. This allows them to deal in large amounts and pass the resulting savings on to their customers.
Where is a good place to find up-to-date foreign exchange rates?
Xe.com and oanda.com are two websites where you can access accurate, up-to-date exchange rates.
Will I need to register for an account with an online money transfer provider?
Yes, in most cases you will need to sign up for an account before you can send a transfer. The good news is that this is usually free.