Businesses and private individuals transfer money overseas daily for a number of reasons. Whether it is to purchase a property abroad to realize your dream of owning a home overseas or sending money to help people back in your home country, international remittances are now popular than ever before. Therefore, the currency market is perhaps one of the busiest platforms recording billions of money every year.
This guide is designed to help beginners to figure out the whole process and help seasoned users of the services get new insights on international money transfer. If you have been wondering how you can transfer large sums of money abroad and the fees, and the exchange rates, this guide will help you navigate through all that in an easy way.
How International Money Transfer Works
The manner of operation of an international money order differs depending on the institution offering the service. However, they have the following key underlying features that cut across:
A person wishing to send money will need to sign up for an account with a reputable international money transfer firm. Secondly, you will need to discuss with your provider about the applicable fees, exchange rates and such other critical aspects necessary in the process.
Finally, you will be asked to book the transaction by providing details about the recipient, destination country, the amount to transfer via an electronic transfer from your account domiciled in the UK to the preferred foreign bank account.
Transferring Money To A Bank Account Abroad
Different ways can be used to transfer money overseas. Here are some of the commonly used methods of transferring money that you can choose.
International Money Transfer Firms: These institutions offer competitive or fair FX and lower fees besides being some of the safest methods. They can also handle huge sums of money, usually above £3,000.
High Street Transfer Services: They are a fast way of transferring money suited for business money transfers since charges on small and personal money transfers tend to be high.
Bank Transfers: This can be done through an online platform or by visiting your bank offices. As one of the most convenient ways of transferring money abroad, customers have a little work since they do not have to register. However, there is a cost for this convenience, which is why the fees charged tend are relatively high.
Using SWIFT Transfer
A swift (or Society of Worldwide Interbank Financial Telecommunications) transfer is a money transfer that allows for a safe, reliable messaging system that facilitates the transfer of money between banks. This method works the same way a domestic transfer works, except that an intermediary is required to link and authorize transactions between different financial institutions across the world. It is worth noting that SWIFT does not involve funds, instead, it is a secure messaging system that sends payment orders between banks and other financial institutions.
Sending Money Abroad?
Most street banks, as well as specialist currency brokers, will help you transfer large amounts of money. No matter if you are paying for goods or buying assets overseas, it is essential to know the best deals and offers. Transferring large sums of money abroad requires the sender to work with a bank or currency broker to handle the transfer on your behalf. Whether you are using a street bank or a specialist money transfer firm, it is important to ascertain the credibility of the service provider to avoid being scammed.
Choosing the Right Bank or Currency Broker
It’s prudent to understand the fee regime of each of the providers of money transfer services, as this will impact the amount you can finally send. As a rule of thumb, street banks charge somewhere between £15 and £25 per a single transfer, while currency brokers charge relatively lower fees. The fees of the latter can go as £3 to £10, though. Depending on the deal, some of the charges may be waived.
When choosing the bank, it is wise to go for those that have overseas branches as they often allow free transfers or charge way below the industry charges. However, you may be required to pay a fee to the receiving bank, which may be approximately 0.5 per cent of the amount being transferred, though this will vary depending on the bank of your choice. Remember that the exchange rate that the service provider will offer you while making a large money transfer will substantially affect the overall cost of the transaction.
To protect against sudden changes in exchange rates, some currency brokers will use special online financial tools that have the capability of monitoring trends in currency exchange. These tools will also be critical to cushion you against any potential losses due to unforeseen changes. You should note that even if the exchange rate moves in your favour, you won’t benefit since you will be already subject to the exchange rate agreed upon earlier with your broker.
What to Consider When Sending Money Abroad
When choosing a service provider to transfer money overseas, it is a good idea to consider the following:
- The amount of money, the frequency of sending and how quick you want your money transferred.
- A majority of currency specialists will be willing to work on transfers of at least £250. Note that transfers of amounts below £5,000 tend to attract higher fees.
- Many transfer companies will mostly accept bank transfers instead of debit card payments
- If you frequently send money overseas, it will be prudent to discuss with your street bank to provide you with tailor-made deals to accommodate your regular transactions and cushion you from extra levies.
The Quickest Way To Send Money Internationally
Several methods are available for sending money instantly abroad, whether you want to pay for imports or send money to your family or friends. Perhaps the quickest way of transferring money overseas is through a money transfer company capable of settling transactions within a few minutes. However, it is worth noting that instant international money transfer is an efficient approach save for the high transaction charges and relatively lower exchange rates.
Foreign exchange brokers are considered cheaper options over money transfer firms and users can benefit from favourable currency exchange rates as well. while the transfer may not be real-time, money can be accessed overseas within 24 hours. How fast the process is will depend on the destination country and the currency involved.
Anyone looking to send money abroad fast with the help of a broker will be required to open an account first. The process is usually very quick since the money is wired electronically. The only downside is that foreign exchange brokers are not authorized or regulated by the FSCS, you do not have guaranteed protection that your money is safe. It is only fair that you use an FCA-authorized firm, especially if you are transferring large sums of money.
Most UK banks and building societies offer an express service of sending money from your current account to overseas. The fees charged for the expedited transfer are significant and can be as high as £40. Therefore, when assessing the cost of sending money abroad, it is important to factor in the exchange rate. When cost is your concern, then a currency broker would help, but when you are focused on the security of your funds, then an authorized UK bank or building society might be the best option since they belong to the FSCS.
Frequently Asked Questions (FAQs)
Who can set up an account with SendFX
You’ll need to be at least 18 years of age and provide valid proof of ID if you want to open an account.
Can I cancel my transfer with SendFX?
You can contact your SendFX account manager to determine the options available.
Can I pay through cash?
Cash is not accepted as a payment method.
Is there SendFX phone support available?
SendFX phone support is available from Monday to Friday between 8 AM to 6 PM AEST.
How does International Money Transfer work?
If you wish to transfer money straight from your UK bank account, you can do so through your bank’s online banking platform. You will need to provide additional information, including the following:
- The name and address and the destination country of the recipient of the money
- The bank account number of the sender and the international bank account number
- You will need to state the amount you wish to transfer, currency to which the money is to be converted.
- Specify the party to settle the fees. Is it to be paid fully by the recipient or you or by both of you?
With this guide, you can now easily, cheaply and conveniently send money overseas stress-free. If you do not know yet how to go about it, you can contact an experienced Moneycorp expert on TorFX Currency Transfer or online money transfer service to help you.
Are All Companies that transfer Money Regulated by the Financial Conduct Authority (FCA)?
While all UK-based firms providing overseas money transfers are authorized by the Financial Conduct Authority, it is important to check with their official website to know whether or not the provider you are about to enlist is an authorized member.
Is it Possible to Negotiate an Exchange Rate Now and Transfer Money Later?
Yes, you can lock in today’s exchange rate to be sued later to transfer money abroad. This can be done through a forward contract in which you agree on a given exchange rate to be used at a future date usually up to 12 months from the date of the agreement. This arrangement is usually good since currency movements are volatile and you stand a risk of losing your money when the wave tilts against you.
By doing so, you cushion yourself against the risk of paying higher costs by agreeing with your currency broker to fix a rate to be used when making a payment in the future. Be sure to ask your providers or online places such as TransferWise, Azimo or OFX Overseas if they have a rate-alert service to help you make quick decisions in advance.
How long does it take for Money to Hit a Foreign Account?
Foreign exchange brokers are known to offer the fastest ways of transferring money overseas. They can help you send money so that your recipient gets it the same day or the following day. As for street banks, this could take a few days (between 4-6 days) for the recipient to receive. However, banks also offer expedited services at an extra cost.
Which is the cheapest Option, a business money transfers or a bank?
Typically, business money transfers are less costly compared to banks. Banks tend to offer lower exchange rates besides the additional charges such as commissions, administration. Therefore, it is good to always check and compare banks as well as currency brokers to see which ones offer favourable exchange rates and lower fees.
How Do I check the best Deals for International Money Transfers?
Everybody is interested in ways to cut on cost and increase the overall benefits, so you can compare money transfer services using some of the online platforms and tools such as FXcompared, XE.com, Currencies Direct and Finance.co.uk where you can see and choose the most competitive quotes. By providing the details about the currency and the destination, you can find a custom-made quote that suits your specific needs.