A – Z Guide to Fees When Sending Money Overseas
This is your definitive guide to all of the fees you might incur when making an international money transfer.
International money transfers can be expensive if you don’t know your options and don’t shop around for the best deal. The two main charges you’re likely to encounter are the transfer fee (sometimes referred to as a commission) and a margin that is built into the exchange rate.
Fees and charges will vary depending on your choice of banking institution or the company you use to send money overseas.
Possible bank fees
|A||Amendment fee||This is a fee for when you want to change the details of your international money transfer.|
|B||Branch sending fee||For international payments initiated at a bank branch.|
|C||Cancellation fee||If you want to cancel your international money transfer or request that you have your money returned to you. The receiving bank may also charge a fee when you request the transaction be cancelled or your money returned to you.|
|D||Disbursement fee||The recipient may incur a fee from their bank for receiving an international money transfer. You can choose to pay this fee upfront. By doing so, you can guarantee that the party overseas will get the full amount sent.|
|I||Investigation fee||This fee is charged when inquiring on the status of the transfer.|
|M||Margin||The margin applied to the exchange rate. This is a hidden cost. You can look into the margin by cross-checking the interbank rate against exchange rates published on the international payment service provider’s website.|
|O||Online sending fee||For international money transfers requested from an online banking platform.|
|P||Phone sending fee||For international payments initiated over the phone.|
|R||Receiving money fee||You can be charged a fee for receiving a payment from an overseas beneficiary.|
International money transfer provider fees
Typically, with a money transfer provider, you will only incur one fee — a transfer fee — and some charge no fee at all. Most providers do not charge the receiving party a fee, and tracking the transfer is also free. The amount of the transfer fee can vary from provider to provider, and depending on the method of transfer — online or at an agent location — and the method of delivery — cash pick-up or bank deposit. But you will likely encounter only one fee. However, don’t neglect to weigh the exchange rate as well when deciding which provider to go with.
The transfer fee and the exchange rate are the two most common charges when sending money overseas. The good news is that you can save on these fees and shop around for the best exchange rate.Back to top
Institutions that don’t charge a transfer fee
There are a number of international transfer companies that don’t charge a transfer fee. For example, TorFX makes money by applying a margin to the exchange rate (but it still ends up being significantly cheaper than using your banking institution). Be sure to compare quotes from providers that do and don’t charge a transfer fee. You may find that paying a higher transfer fee leaves you better off at the end of the day because of a more favourable exchange rate.
Institutions that charge a low margin on the exchange rate
If you want to get the best deal you can, it’s a good idea to compare non-bank international money transfer providers. Peer-2-peer (P2P) international money transfer companies such as TransferWise can give you an exchange rate that is slightly above the market foreign exchange rate. While it’s difficult to get the market rate if you’re an everyday consumer, these P2P companies can give you access to some of the best foreign exchange rates around.
Pay attention to the fees when you send money overseas. Although some of them can’t be avoided, others can, and there’s no reason why you shouldn’t shop around to find the best deal when sending money overseas. And don’t forget to take the exchange rate into consideration when determining which provider to use. A company that doesn’t charge a transfer fee might make up for this by offering a poor exchange rate.
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