There’s more to sending money overseas than shopping around for the cheapest transfer fee. Here we explain the key points you need to consider.
The amount of money you are sending is key to finding the best deal.
The more money you send, the more important the exchange rate will be.
The table below shows how much difference a competitive exchange rate makes. It can even be worth paying a transfer fee to access the best exchange rates in some cases.
If you are only sending a small sum, the transaction may not meet the minimum thresholds required by international money transfer services meaning your bank might be a better option.
International transfers are often more cost-effective when sending a large amount of money overseas, for example, when buying a property. This is because the transfer fee is usually fixed.
Specialist transfer companies sell their services based on speed and cost. In fact, in some cases, they can offer transfers on the same day or the following one.
However, in some circumstances, your bank might be able to offer you a better deal.
For example, your bank may be able to transfer money free of charge if it is to a linked bank in the destination country. Alternatively, some banks allow free transfers if the account you are sending it to is also in your name. This could be helpful if you have an overseas holiday home.
However, even in these cases, your bank may not offer the best exchange rate, so it still makes sense to get a quote from your bank and shop around with specialist international money transfer services.
A specialist company may also provide more options, such as the ability to lock in today’s exchange rate for several regular transfers.
Cheaper than bank transfers
Quick transfers available
No limit on how much you send
Option to lock in exchange rate for future transfers
No FSCS protection
Not ideal for small transfers
Requires account registration
You can send money almost anywhere globally, but there needs to be an account open to receive the currency you send.
Some of the typical locations you can send money to worldwide include:
The name on your bank account needs to match the name on your money transfer account; otherwise, your transfer could get rejected due to European regulations.
You will also need proof of identity to prevent fraud. Requirements may also be more significant for larger amounts.
Some travel money companies need you to complete your transfer by speaking with one of their account managers over the phone, though this is usually only for large transfers.
If the money transfer company you choose goes bust, you could lose your money. This is because international money transfers are not covered by the Financial Services Compensation Scheme (FSCS).
Most companies are FCA regulated, though, meaning they have to safeguard your money by keeping it separate from the company’s operating funds. You can find out if a company is FCA regulated here.