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Making Smart International Money Transfers and Managing Your Expenses Abroad

When it comes to managing your finances across borders, it's crucial to have the right tools and knowledge at your disposal. This guide offers valuable information on why using a currency broker can be a smarter choice than traditional bank transfer methods, the different reasons people transfer money internationally, various methods for transferring money online, and considerations for transferring money from a credit or debit card to an overseas bank account. 

International Money Transfers: How to Save on Costs

Sending money abroad should be cost-effective and straightforward. Here, we'll explore why using a currency broker is often a smarter choice than traditional banking methods.

Why Use a Currency Broker?

When you need to send money abroad, many people naturally think of their local bank as the go-to option. Surprisingly, the majority of the public still use banks for international money transfers, often unaware of the benefits offered by reputable currency brokers. However, there are compelling reasons to consider currency brokers over traditional banking methods:

  • Better Rates and Lower Fees: Banks often charge fees each time you send money internationally, frequently adding commissions on top. Currency exchange brokers, on the other hand, specialise in foreign exchange and are known for providing competitive rates and clear fee structures.

  • Personalised Service: Currency brokers take pride in offering a more personalised and approachable service. Many even assign dedicated account managers to guide you through the process, from start to finish. This level of support can be especially valuable for larger transactions or complex transfers.

  • Market Expertise: The foreign exchange market is known for its rapid rate fluctuations, sometimes changing dramatically within a single day. Currency brokers, driven by their need to remain competitive, are equipped to offer you the most favourable rates possible, unlike many banks.

  • Risk Management: Currency brokers possess in-depth knowledge of the market and closely monitor events that could affect currency values. This insight allows them to help you manage risks associated with exchange rate fluctuations, ensuring you make informed decisions when transferring money abroad.

  • Delivery Time: Currency brokers often provide quicker transaction delivery time, especially for substantial amounts or less common currency pairs.

What is a Money Transfer

A Money Transfer is Simply the Act of Moving Money from one Party to Another.

 

This can be done electronically by sending money online, by physically handing over cash or by using mobile phone banking apps as a payment method to transfer money. People transfer money for various reasons, including:

Personal Finances: Individuals use money transfers for family support, gifting, or sharing expenses with friends.

Business Transactions: Companies transfer money to pay suppliers, employees, or contractors. This includes payroll, purchasing goods or services, and settling bills.

Expats Sending Money Home: Individuals working or living abroad often send money back home to assist their families to receive money to pay bills. These transfers are known as remittances.

Online Shopping: When you buy something online, you transfer money to the seller to complete the transaction.

Travellers Paying for Tours and Retreats: Funding their dream adventures, from exotic tours to wellness retreats, using international money transfers.

International Students Paying Tuition: Investing in education abroad, covering tuition fees with secure and efficient money transfers.

Financial Management: Investors may move funds between different accounts, such as from checking to savings, between brokerage accounts or to send money to a bank account abroad.

Bill Payments: Money transfers are common for paying rent, utilities, credit card bills, and loans.

How to Transfer Money Online

  • Specialist Currency Brokers/Money Transfer Companies: Such as Wise, TorFX, XE

  • Bank Transfers: The most common method involves moving money between bank accounts, domestically or internationally. This can be done through wire transfers, Automated Clearing House (ACH) transfers, or online banking.

  • Mobile Payment Apps: Mobile apps like PayPal, Revolut, Venmo, Cash App, and mobile banking apps enable digital money transfers among friends, family, or businesses.

  • Cryptocurrency: Bitcoin and Ethereum offer decentralised, borderless peer-to-peer money transfer alternatives.

  • Online Payment Platforms: Platforms like Stripe and Square facilitate online transactions for businesses.

Other Ways to Transfer Money

  • Cash Transfers: Some services allow you to send cash for pickup at specific locations. Western Union and MoneyGram provide such services.

  • Paper Payments: Money orders and checks are physical forms of payment that can be mailed or handed over in person.

Switch to a Smarter and Cheaper Way to Send Money

Switching to more cost-effective alternatives for your money transfers can save you money in fees and provide better exchange rates. Consider options like specialist money transfer companies, online banking, mobile payment apps, or even cryptocurrency transfers to ensure you get the most value from your transactions.

  • Transfer Fee starts from 0.43%

  • Mid Market Exchange Rates

  • Transfer +50 currencies

  • No Transfer Fee

  • Competitive Exchange Rates

  • Transfer 60+ currencies 

  • No Transfer Fee

  • Live Exchange Rates

  • Transfer +170 currencies

What Details do You Need to Transfer Money

To Start a Money Transfer, You'll Need:

  • Funds: Ensure that the money you intend to transfer is available in your selected account or payment form. Make certain that your balance covers both the intended transfer amount and any associated fees.

  • The Persons Information you are sending the money to: Collect the person's particulars, such as their complete name, address, contact information, and, in specific instances, their bank account number or other identification data. It is important to have this information available to prevent any potential errors.

  • Transfer Method Selection: Pick the transfer method that you need or want.  Usual options are bank transfers, online payment platforms, cash transfers, mobile payment applications, and cryptocurrency transfers.

  • Bank Account (If Applicable): If you opt for a bank transfer, ensure that you possess a bank account in your name. In some instances, you might need the recipient's bank account details to proceed.

  • Internet Access: For online money transfers, ensure that you have access to the internet and possess an account with the relevant online service or platform, such as online banking, PayPal, or a mobile payment app.

  • Cash on Hand (If Applicable): If you are doing a cash transfer, make certain that you possess the physical cash you intend to transmit. Additionally, you might need to visit a physical location, like a money transfer agency or bank branch, to complete the process.

 

  • Identification Documents (If Required): In certain scenarios, especially for large or international transfers, you may need to provide identification documents. These are usually required by financial institutions to comply with anti-money laundering (AML) and know your customer (KYC) regulations.

  • Approval from the Person You Are Sending Money to: Confirm that you have obtained the recipient's consent to perform the money transfer, especially if you intend to employ their bank account or personal information for the transaction.

  • Payment Details: If you are making payments for bills or invoices, make certain that you have the necessary account numbers, payment references, or invoice numbers on hand to guarantee accurate processing.

  • Transaction Details: Prepare to specify the precise transfer amount, currency, and any additional instructions or messages that you wish to include with the transfer.

Please note that the specific requirements can vary depending on how you're transferring money, the company or service you choose, and whether it's a local or international transfer.

 

Always double-check the terms and details with your selected money transfer service to make sure your transaction goes smoothly without errors.

Transferring Money to an Overseas Bank Account using a Credit Card

It is possible to transfer money from a credit card to an overseas bank account, but it's important to note that this process is typically considered a cash advance, and it can be costly due to fees and high-interest rates. Here's how it can generally be done:

  • Contact Your Credit Card Issuer: Start by reaching out to your credit card company to inquire about the possibility of cash advances for international bank transfers. Ask for details about associated terms, fees, and interest rates.

  • Verify the Recipient's Bank Details: Ensure you have all the accurate bank information for the overseas account where you want to send money. This includes the recipient's full name, bank name, account number, and the bank's international SWIFT/BIC code. If needed, also get the specific branch details.

  • Initiate the Transfer: You can begin the transfer process through your credit card company's online banking platform or by contacting their customer service. They may request you to complete a cash advance request form.

  • Pay Fees and Interest: Be prepared to cover various charges, such as a cash advance fee (usually a percentage of the transferred amount) and potentially foreign transaction fees. Keep in mind that interest on cash advances typically starts accruing immediately, and it's usually at a higher rate than regular purchases.

  • Check Exchange Rates: If your credit card's currency differs from that of the recipient's account, consider the exchange rate, which can affect the final amount received by the recipient.

  • Wait for Processing: The transfer may take some time to process, depending on your credit card issuer and the receiving bank. Be patient and stay updated on the progress of the transaction.

 

  • Inform the Recipient: Notify the recipient that you've initiated the transfer, and provide them with essential details, including the expected arrival date and the amount being sent.

Transferring money from a credit card to an overseas bank account can be costly due to high fees and interest rates. It's advisable to explore more affordable alternatives for international money transfers, like international wire transfers, online money transfer services, or international money transfer apps. These options often provide better exchange rates and lower fees.

How the Top Three Money Transfer Compare

Product Feature
Wise (formerly TransferWise)
Tor FX
XE.com
Open Account
Open Account
Open Account
multi-currency wallet
limit orders
historical rate charts
Customer Support
Email, chat, FAQs
Phone, email, chat, FAQs
Email, FAQs
Loyalty Program
Yes
No
No
User Reviews
Highly rated
Positive customer feedback
Positive customer feedback
Additional Services
Borderless accounts,
Forward contracts,
Currency converter,
Mobile App
Yes
Yes
Yes
Regulation
FCA, FINCEN, ASIC
FCA, HMRC, ASIC
FCA, FinTRAC, AUSTRAC
Transfer Methods
Bank transfer, debit/credit
Bank transfer, debit/credit
Bank transfer, debit/credit
Transfer Speed
Typically within hours
1-2 business days
1-4 business days
Transfer Fees
Transparent and low
No transfer fees
No transfer fees
Exchange Rates
Mid-market rates (real)
Competitive rates
Live market rates
Currency Pairs
50+
60+
170+

Best UK Banks for International Transfers

How Much Does it Cost

Before selecting a transfer provider, consider the cost.

 

We've compared fees (September 2023) for various providers using the example of sending £1,000 to the US. Wise, an international transfer specialist, often offers lower fees and better exchange rates.

In addition to the transfer fee, pay attention to the exchange rate. Banks typically set their own rates, often adding a markup that benefits the bank.

Consider correspondent fees. Banks often use the SWIFT network, leading your money through various correspondent banks, each potentially charging its fee.

Bank Transfer Fees Comparison Table

Provider
Fee
Exchange Rate
Correspondent Bank Fees
Total Cost
TSB
£10 (online) to £20 (branch or phone)
Exchange rate + markup
£6
£10-£20 + exchange rate markup + £6
Santander UK
£25
Exchange rate + markup
Varies
£25 + exchange rate markup + correspondent bank fees
RBS
£0 (standard) to £15 (urgent)
Exchange rate + markup
Varies
£0-£15 + exchange rate markup + correspondent bank fees
Nationwide
£20
Exchange rate + markup
Varies
£20 + exchange rate mark-up + correspondent bank fees
Metro Bank
£25
Exchange rate + markup
Varies
£25 + exchange rate markup + correspondent bank fees
LLoyds
£9.50
Exchange rate + 3.55% markup
£12
£9.50 + 3.55% exchange rate markup + £12
HSBC UK
£4 (online) to £17 (postal)
Exchange rate + markup
Varies
£4-£17 + exchange rate markup + correspondent fees
Halifax
£9.50
Exchange rate + 3.55% markup
£12
£9.50 + 3.55% exchange rate markup + £12
First Direct
£0 (online) £4 (phone)
Exchange rate + markup
Varies
£0-£4 + exchange rate markup + correspondent fees
Co-operative Bank
0.25% (min. £13 to max. £35)
Exchange rate + 4% markup
Varies
£13-£35 + 4% exchange rate markup + correspondent fees
Barclays
£0 (online)£25 (branch or phone)
Exchange rate + markup
Varies
£0-£25 + exchange rate markup + correspondent fees
Wise
£3.84
Flat Exchange Rate no Mark up
None
£3.84

Timely International Payments

"In addition to cost, you'll also want to know how quickly UK banks can send your money where it needs to go. Let's take a quick look at the average processing times for international payments. We'll use the example of sending 1,000 GBP to USD as a reference."

Bank Transfer Times Comparison Table

Provider
Time to send 1,000 GBP to USD
TBS
4 working days
Santander
Next working day
RBS
1-2 working days (urgent) 2-4 working days (standard)
Nationwide
At least 4 working days
Metro Bank
2-5 working days
Lloyds
Up to 4 working days
HSBC UK
Up to 4 working days
Halifax
Up to 4 working days
First Direct
Up to 4 working days
Co-operative Bank
1-4 working days
Barclays
Same day
Wise
Within 2 working days

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