Your bank isn’t your only option if you need to send money overseas. Here we explain how international money transfer services work.
International money transfers are a way of moving money out of your UK bank account into another account overseas. Although your bank may move the funds for you, specialist transfer companies may work out cheaper and faster.
There are many reasons why you might need to use an international money transfer. These include:
Purchasing items overseas
Sending gifts overseas
Sending money to friends or families in other countries
Moving pension payments if you have retired overseas
Purchasing overseas property
Payments can be set up as and when needed, or you can set up regular payments.
You usually have two options when completing an international money transfer:
Spot contract: You get the exchange rate offered when you decide to make a transfer.
Forward contract: You fix an exchange rate but arrange the transfer for a future date.
Rates offered for forward contracts are usually worse than rates offered for spot contracts, but you do get three types of transfer options:
Limit order: Choose a rate at which you want to transfer. When that rate is reached, the platform will transfer your money.
Stop-loss order: Choose a lower limit that an exchange rate can fall to before your transfer takes place, even if it is before the date you wanted to make the transfer.
Regular payments: Arrange multiple transfers in advance over a period of time.
Charges differ depending on the transfer company you choose and how you choose to send your money. To find the best transfer deal, you should compare the cost of the following:
Transfer fee: this is usually a set cost, such as £5
Exchange rate: how much you get for your money in another currency
Compare as many transfer companies as possible. Note the difference between the amount you pay and the actual amount that will land in the recipient’s bank account. This will be the cost of the transfer.
How much you can send will be determined by the service you choose.
There is not usually an upper limit, but most companies ask that you speak to one of their consultants to authorise any transfers over a certain amount, such as £15,000. You may also need additional forms of ID to send larger amounts.
There may be a lower limit, so it’s important to check if you’re only planning to send smaller sums. If the sum you need to send is below minimum thresholds, you may need to use your bank.
To send money to another country, you will need to do the following:
Have the funds available in your bank account
Have the account details you wish to send the money to
Verify your ID
Transfer your money for the best exchange rate and lowest transfer fees
Some companies may not charge you a fee for an international transfer, but this doesn’t necessarily mean they’re cheaper. It’s more likely that they cover their costs with a less-competitive exchange rate.
The length of time can vary depending on the money transfer company and where you are sending the money, but likely timescales include:
You may have to pay more for a same or next day service.
Some companies let you transfer money from one of the following:
If you do not have a UK bank account, you will not be able to complete an international money transfer.
Some banks let you transfer money abroad for free, but there are often restrictions such as:
You must have an account with the same bank overseas.
Your name must be on both the UK and overseas accounts.
You may need to transfer a minimum amount, such as £3,000, depending on the platform you use.
You can send cash for collection abroad with some transfer companies, enabling you to send smaller amounts that often arrive within a few hours.
Although this method is quicker than sending money to an overseas account, you could face higher charges for doing so.
Alternatively, some companies let you transfer to mobile wallets in certain countries, allowing you to send money instantly to another person’s mobile device.
Some companies let you transfer funds to a branch or pick up point in other countries.
This type of transfer is usually more expensive than an international money transfer, so check the costs with several companies before choosing to move your money in this way.