The best ways to transfer money to and from abroad

Generally speaking, sending money to (and from) abroad can be done in a matter of minutes, depending on where in the world, of course. For payments to be that much speedier, however, it’s worth nothing that paying that little bit extra may just get the job done quicker. Fees for making international transfers are often quite costly so it’s best advised to shop around and see who offers the best choice.

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Using transfer operators to send funds

The likes of MoneyGram and Western Union are two well-known operators with a reputation for sending money to even the most remote places in the world. They are handy in that sometimes the person who’d receiving the money does in fact not even have a bank account within which to deposit the funds. These kinds of companies are also convenient because the service can be transacted in a shop that features these services or over the phone. There is a downside to these operators however and that’s that they can be quite expensive to use, often taking up to 10% as their charge which can be a lot on larger amounts being transferred.

The banks

Many people will see the banks as being the easiest option to send their money overseas.  A bank will be where most (if not all) of a person’s funds are help so why then not just use them to send the money, too? What goes unnoticed though is that bank fees can be quite high, often charging up to £25 for sending the money along with the 5-7% margin they’re creaming off the top. Using a bank for transfers also means that the whole process can be quite slow, often taking up to 3 three days for the payment to go through. Banks are thus considered to be one of the slowest ways to send money abroad. It can be worthwhile at times however, say for example you and the receiver both use the same institution. In that case, fees might be lower or subject to special rates.

Using a FX broker

When it comes to transferring substantial amounts, say, over £10,000 or equivalent, and there are a number of reasons for this. In most cases with specialist foreign exchange brokers, these types of companies can be around 3-4% cheaper than using high street banks. This can mean a lot, particularly if you’re transferring money on a regular basis. Many also don’t charge additional fees because they make their profit on the fact that they purchase their currency at wholesale rates, thereby reducing costs. They can also save money with various contracts options such as Forward contracts which allow people to ‘fix’ the exchange for a stipulated period of time. If the FX broker has an online too you will save further as there is no physical exchange of cash.


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Remember as well that there are also online transaction services, the most notable of them being PayPal which has risen over the last decade to become something of a tour de force. There can be fees with these though so always make a note the percentage being taken.

 

Grant Daniels Daniels

Grant Daniels writes about foreign exchange in his personal capacity in between taking long naps.

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