How You Can Beat Overseas Transfer Fees

17 Jan 2018 - Michael Frigger - 4 minutes

How You Can Beat Overseas Transfer Fees

More than $16.5 billion made its way out of Australia in remittances to other countries in 2015 (source). This goes to show Australians send a considerable amount of money overseas.

No matter what the reason, making a cross-border transfer typically involves paying fees. There’s also the all-important exchange rate factor.

Let's find out if there's any way you can circumvent these additional costs when sending money overseas.

Identify Your Options

Before you make your next overseas money transfer, take time to identify your alternatives and find out how cost-effective they are.

Banks

  • It is common for Australian banks to facilitate international money transfers for their customers, so contacting your local bank is one option.
  • While some banks let you initiate transfers in person, this feature typically comes at an added cost.
  • For example, an international money transfer carried out by visiting a Commonwealth Bank branch would cost you $30, whereas an online transfer through the same bank would set you back by $6 or $12, depending on the transfer amount.
  • Keep in mind sometimes there are limits on how much you can transfer internationally at a single time. For example some Bankwest customers have online international transfer limits of $20,000 at a fee of $20, whereas the in-store fee is $35 with no limit. Say you’re trying to transfer $60,000+ online, it would cost you $60, but if you went in-store it would still only be $35.

Currency brokers

  • Turning to a currency broker might be a good idea if you plan to carry out a large value transfer for investing in a business or purchasing a home.
  • A good currency broker can provide the right kind of assistance when it comes to understanding hedging alternatives such as market orders and forward contracts.
  • Used in the right way, these tools may lead to noticeable savings.

Money transfer companies

  • FinTech money transfer companies have given individuals and businesses easy means to transfer funds overseas from just about anywhere, at practically any time.
  • More often than not, these companies outperform banks and currency brokers in areas such as fees, exchange rates, and turnaround times. Launched in 1999, Australia-based OFX, formerly known as OzForex, now has a global presence, and it operates dedicated websites for different countries.
  • Some of the other leading names of this field include TransferWise, WorldFirst, Currencies Direct, and TorFX.

Tips to Save Money

Given that there are a number of specialist money transfer companies from which to choose, getting the best deal requires paying attention to different aspects.

Payment method

  • How you pay for your transfer may have an effect on the fees you need to pay.
  • Paying through your bank account is usually the most cost-effective, credit card payments tend to attract the highest fees.

Transfer fees and exchange rates

  • Some companies offer fee-free transfers but make up for it by providing less than desirable exchange rates.
  • To determine which company is offering the best deal, simply look at how much money the recipient will get.
  • Keeping track of exchange rates may work well for you, giving you the opportunity to transfer funds when the time is right.

Transfer speeds

  • Some companies offer express transfers, although they tend to cost more.
  • If the recipient is not in a hurry to get the money you may consider the option for a regular transfer instead.

Coupons

  • The availability of fee-free transfer coupons provided by different companies can lead to added savings.

Conclusion

If you have been using banks to send money overseas, consider turning to specialist fund transfer companies. Not only will they lead to savings, they may also offer quicker processing times as well.

Since the forex market remains volatile, running a comparison shortly before a transfer is the best way forward.


This article was a guest post by iCompareFX.


 

Michael Frigger

Michael Frigger

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Michael enjoys long walks along the beach accompanied by a glass of fine wine with a side of vegemite and crackers. Whilst he's not doing that, he's doing his part to help Australians better their personal finances through CashMaster.