Pay lower fees and benefit from better exchange rates when sending monetary gifts to family overseas.
Option 1: Big banks
There are several ways you can transfer money to your family abroad, or an overseas recipient. One of the slowest methods is to purchase an international money order from your bank – basically, a check in a foreign currency – and mail it to your family member.
You can also use your bank to wire the money to your recipient’s bank account. But banks are notorious for offering poor exchange rates and charging high fees. Sending money through your bank is secure but can be quite expensive.
However, when using a specialist money transfer provider you can save money when you shop around for the best deal. Read on to learn about their services.
Option 2: International money transfer providers
While major U.S. banks offer money transfer services, they usually present less competitive exchange rates coupled with high transfer fees. You can often save money by using the services of a dedicated money transfer company. These providers specialize in handling overseas money transfers, offering attractive exchange rates and affordable transfer fees. This translates to big savings for you.
There are a number of money transfer companies that you can use to send money overseas. How you pay for the transfer and how your recipient receives the money can vary depending on the provider. Generally, a transfer involves you providing funds to the transfer provider, which then sends the money to your recipient in another country. This can be done in person, over the phone, through a mobile app or online. You can use cash, a credit or debit card, or transfer funds from your bank account, which will then either be deposited into your recipient’s bank account or mobile wallet, or made available as cash for them to pick up at a location in their country.
Option 3: PayPal
Send money to friends and loved one overseas from your PayPal account. While PayPal allows you to send money inside the U.S. for free, there are fees associated with sending funds overseas. The other expense you need to take into account when transferring money overseas is the exchange rate. PayPal’s exchange rate is determined by a financial institution and adjusted regularly to stay in line with market conditions.
Choosing the right transfer provider
With so many options available, how do you choose the right one for you? Before making your transfer, ask yourself these questions when comparing providers:
- How fast is the money needed? Some providers will make your funds available for the recipient within minutes. Others will get your money there in 1 to 2 business days.
- Which country is the money being sent to and in which currency? Not all providers offer all currencies. Some offer a wide range, while others are more limited. A few countries prevent money from moving into the country from overseas, but it is worth checking to make sure that whichever way you send the money it will actually be able to be collected and in the right currency.
- Is there a minimum or maximum transfer amount? Some companies will transfer as little as a dollar, but others won’t deal with anything less than a few hundred. Look for a match with what you’re trying to send.
- What are the fees and exchange rates? Whatever method you use, most likely you will have to pay a fee for the service, and there will be an exchange rate that will vary from day to day and company to company. See how the rates offered by one provider stack up against those offered by its competitors. And weigh the cost of the transfer fee. Some providers will waive their fee if you transfer more than a set amount. But remember that some providers may charge a low fee but offer a poor exchange rate.