By Matt Fernell, Editor-in-Chief at Finance.co.uk. Published 2nd November 2023.
An international money transfer is a way to make international payments from your bank account to another bank account in a foreign country.
You can transfer money through your bank; however, specialist money transfer providers are usually the cheapest option and can transfer money faster.
International transfers also support the receiving of money from abroad into your account.
Most international payments are made using the SWIFT system. SWIFT is a worldwide network that allows banks and financial institutions to send and receive information about financial transactions globally.
You can send money abroad through your bank by using their mobile app or online banking, or you can do it in person at a branch.
If you want to transfer money worldwide via an e-money institution like Wise or a broker like TorFX, you’ll need to create an online account and tell them how much you need to transfer.
Once you’ve agreed to the exchange rate and fees, you send your funds to them, and they’ll do the rest.
When setting up a transfer, you’ll need to provide the following information:
Beneficiary name: This is the name on the bank account of the person you’re sending money to.
International Bank Account Number (IBAN): This is an internationally accepted numbering system that identifies bank accounts worldwide.
BIC or SWIFT code: These codes identify the bank and country the money is being sent to.
Bank information: You will need to provide the name and address of the bank you are sending money to.
Most providers don’t set an upper limit for international money transfers, but it’s worth checking, especially if you want to send a large amount.
Some providers will set a limit of £50,000 per transfer, but this may also depend on where you’re sending the money.
There may also be other restrictions, for example, a smaller limit for transfers by app or online. If you need to make a large transfer for something like a house purchase, you may need to provide a form of ID or visit a branch if the provider has one.
Follow these steps to send an international money transfer:
Compare international money transfer deals to find the right option for you
Create an account with your chosen transfer provider
Enter the details of the transfer, including the destination and amount
Add in the recipient’s bank details as outlined above
Choose how to pay for the transfer - most providers allow bank transfers, debit card or credit card payments
Your money is sent and can arrive within minutes, depending on the provider
When you transfer money overseas, there are two main costs you need to consider: the exchange rate and the transfer fee.
The exchange rate is usually the most significant cost, especially if you’re sending a large amount. This is the value of one currency against another, so if you’re sending money from the UK to India, look at the UK pound to Indian Rupee rate.
Banks and other types of money transfer companies may charge a transfer fee, which is a flat rate charge or a percentage of the transfer. High-street banks usually charge the highest transfer fees, whereas currency brokers are generally free or low-cost.
Opening an account with a broker is usually free; however, you’ll still pay the exchange rate quoted. The competitiveness of this rate will depend on whether you choose a spot deal, forward contract or limit order.
Generally, high street and online banks are the most expensive way to send money abroad, and currency brokers are usually the cheapest.
When completing your transfer, you can choose between a:
Spot deal: This is where you agree to send the transfer at the exchange rate when the money is sent. This usually gets you the best rates.
Forward contract: This allows you to agree and fix an exchange rate and then send the transfer at a later date. These rates are often less competitive than spot deals.
Limit order: Here, you choose an exchange rate, and the transfer only goes through when that rate is reached. This is a good option if you want a good deal and aren’t in a rush to send the money.
Not all providers offer forward contracts or limit orders, so check this when comparing deals.
Once you’ve opened your account and agreed on a deal with your broker, the most popular currencies can be sent quickly. Often within one day and sometimes in minutes.
For less popular currencies, sending and receiving international payments can take up to five days. This is because anti-money laundering measures and other checks need to take place to prevent fraud.
Other factors like the banking system being used or differences in the timezone can influence how long your transfer takes.
If time is a factor, check to see how quickly each provider can send your transfer before you sign up.
All international money transfer companies are regulated by the Financial Conduct Authority (FCA) or a foreign financial regulator. They should, therefore, adhere to their compliance procedures and protect your identity from theft or fraud.
If you’re making a business transaction, you can protect yourself from fraud, loss or theft by verifying the identity and registration details of the business supplier.
If you send money to an individual, never transfer funds to someone you don’t know. Whether it's a personal or business international transfer - always double-check you’re using the correct details.
Firstly, check the money left your bank account and ask your bank to confirm it reached the transfer provider’s account.
If it did, you’ll need to contact the transfer provider you used. They should be able to trace the payment journey and determine what happened. If it’s their mistake, they should rectify it.
If a bank or e-money institution loses money and doesn’t resolve the problem, you can take your complaint to the Financial Ombudsman Service. It will investigate for you, and if the bank or provider is in the wrong, you should get your money back.
There are several ways to transfer money to a bank account overseas, and which option is right for you will depend on your circumstances.
Here’s a breakdown of all the ways you can transfer money abroad, including the pros and cons of each.
The information provided does not constitute financial advice, it’s always important to do your own research to ensure a financial product is right for your circumstances. If you’re unsure you should contact an independent financial advisor.
