It is a way of transferring money from your UK bank account to an account held in another country.
You can only do this through transfer companies and not your bank or building society.
You usually have two options when completing an international money transfer:
Spot contract: You get the rate offered at the moment you decide to make a transfer.
Forward contract: You fix a 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 you want to transfer at, and when the rate is achievable 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 the way 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 and look at the overall cost and how much you actually get to send to find the best deal.
The minimum amount you can send varies depending on the transfer company you choose, with some setting a lower limit of £1,000.
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.
To send money to another country you will need to do the following:
Have the money available in your bank account
Have the account details you wish to send the money to
Transfer your money for the best exchange rate and lowest transfer fees
If a company claims that they will not charge you for an international transfer then they may offer you a lower exchange rate to cover their costs.
The length of time can vary depending on the money transfer company, but common timescales include:
You usually pay a fee to have your money transferred the same day or next day.
Some companies let you transfer money from one of the following:
If you do not have a UK based 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 account in the UK and the account abroad.
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.
This lets you send smaller transfers which usually get to the other country within a few hours.
Although this method is quicker than sending money to an account abroad, you could face higher charges for doing so.
Alternatively, some companies let you transfer to mobile wallets in some countries, which allows you to send money instantly to another person's mobile device to spend.
Some companies let you transfer funds to a branch or pick up point in other countries around the world.
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.
Take the sting out of the cost of sending money by comparing the cheapest and most efficient ways to complete money transfers on the market.