Sending money abroad
To make the most of your money without losing a substantial amount for the privilege, you need to know what you’re doing.As an expat, it’s highly likely that at some point you’re going to have to send money overseas, whether it’s a one-off lump sum (such as the proceeds from a house sale) to get you set up, a regular transaction of wages, rent payments and pensions, or even payments going back to your country of origin to help your family. Strangely, despite all the energy we throw into planning other aspects of our move, down to the finest detail, it’s quite common to overlook money transfers – after all, it’s your money so how difficult can it be to transfer from one bank to another, right?
Sorry, that would be a resounding ‘wrong’. The world of finance is a complicated one; a minefield of conversion rates, commissions and fees and ignoring it won’t make the problem go away. To make the most of your money without losing a substantial amount for the privilege, you need to know what you’re doing.
What if you’ve moved already, you’ve not given it a thought and now you’re paying over the odds for money transfers? It’s not too late, so don’t panic.
Should you use your bank for overseas transfers?
Banks are authorised to set their own exchange rates and typically set them 3 or 4% worse than the inter-bank exchange rate.The first thing you need to know is don’t leave it to your bank.
Banks are authorised to set their own exchange rates and typically set them 3 or 4% worse than the inter-bank exchange rate (the rate at which one bank can transfer to another). Why? Because they can use this to hide a percentage of their fees, effectively charging you extra. They also typically charge around 2% commission and apply a flat rate ‘fee’ of anything between £4 and £25 – see how you get charged more than once?
Take for example a transfer of £1000. An advertised flat fee of £10, which at face value is acceptable to most people, can easily become £50+ once you’ve factored in the 2% commission (£20) and an unfavourable exchange rate. So, if for example, you’re transferring £1000 a month in rent, for a property you still own at ‘home’, you could be paying the bank a whopping £600 a year! Consider then those who are still citizens of their home country, work abroad on government contracts but are paid in their home currency – transferring their wages every month could amount to thousands of pounds lost across the term of their contract!
The best way to send money overseas…
We know that researching this is a thankless task when you’re busy settling in to your new life, so we’ve taken the liberty of doing it for you. There are several companies that offer better rates than banks, such as TransferWise, Western Union and Xoom. In our humble opinion TransferWise offers the cheapest, easiest and safest way to transfer money abroad.
TransferWise Ltd. is a UK based money transfer company, authorised and regulated by the Financial Conduct Authority (FCA) and has attracted big name investors like Sir Richard Branson. They offer you the best exchange rates at any given time – the same rates as inter-bank transfers, hooray! – and their flat fees are exactly that; upfront fees with no hidden surprises.
We wouldn’t recommend just anyone, the proof is in the figures… TransferWise currently have 36088 5 star reviews on TrustPilot and they’re moving more than £500 million per month, all over the world. Of that £1000 we discussed earlier, the fee is £4.98 and the favourable exchange rate means you’ll receive £994.99 and that is why we recommend using their services.
Sponsored by TransferWise
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