The following is a guest post about international money transfers. If interested in submitting a guest post, please read my guest post policy and then contact me.
You’ve worked hard and you’ve saved and earned (or maybe you didn’t, maybe you’ve stumbled into a fantastical fortune). You’ve decided to spend your money on buying a home overseas, send money to far flung family, emigrating or getting married abroad (or something more exotic and exciting than we can imagine).
But, to make this happen you now need to get your money overseas – you’ll need to make an international money transfer.
The process could seem complicated, full of hidden fees and fast moving exchange rates that threaten to reduce the value of your money. Though, with these choice tips you can ensure that more of your money makes it to where you need it.
Be careful with the costs – look for the lowest transfer fees and the best exchange rates
The traditional way of making an international money transfer was to use a bank, but the problem is that the bank doesn’t specialise in foreign exchange. This means you’re unlikely to get the best rates, as unless you’re transferring huge sums your trade is not really worth their time.
If you use a foreign exchange specialist to send your money, you can receive better exchange rates on your transfers – for example the savings on a transfer of £100,000 will be around £3000.*
A bank typically charges around £20 – £40 to make an international transfer. The fees with a specialist are significantly lower – starting from around just £5 per transfer.
*based on exchange rate comparisons against leading high street banks, averaged from 2013.
Think when you need to send money overseas to make the most of the market
Firstly, the foreign exchange market closes and exchange rates fluctuate constantly, and they can move quickly,sometimes the value of a currency can plummet in a matter of days, even hours.
So timing when you move your money can make a big difference. Over the course of 2013 the euro fluctuated between lows of £1=€1.14 and highs of £1=€1.23. This would have meant a difference of around 6% to the value of your money.
If you plan in advance with a specialist you should receive expert guidance on the market from a personal account manager. If it suits, you could “lock” a favourable rate for a future transfer with a forward contract. Alternatively, if the market rate is unfavourable you could consider a market order, which will automatically exchange your money when the market reaches a rate that is more to your liking.
Know the lay of the land – understand where you are sending your money
Regulations, money transfer processing speeds and charges will vary according to the country you are sending your money to. So you need to understand this and plan accordingly.
Within the EU, money transfers from the UK can normally be made on the same day if all goes well. The same often goes for transfers to the US, Australia and other “major currency“ countries.
International money transfers are likely take a few days more to “exotic currency” countries such as India or China etc. Currently the nations of sub-Saharan Africa hold the record for the longest transfers, taking around the 5 day mark to process.
Fail to plan, plan to fail – prepare your banking.
Preparing everything you need in advance will make it much simpler.
Your bank will often need to be notified that you intend to start transferring sums of money overseas or they will stop the funds leaving your account. For security purposes, you will need to notify them of your intention in person or via “original instruction” (which involves a fax or couriered letter).
You will need to set up a bank account in the country you want to send your money to. You should shop around, as some banks charge you “receiving fees” (up to £40!) and others don’t charge any at all.
A foreign exchange specialist’s customer service team should be able to give all the help you need to make the process go smoothly.
Before you hand over money to any foreign exchange company make sure they are authorised and regulated by the Financial Conduct Authority (FCA). This means that they are required to keep your funds in a segregated client-account. So, if an FCA authorised and regulated company falls into trouble, your money will be kept secure and returned to you.
You can check any listed financial company online through the FCA register (www.fca.org.uk).
Money transfers made easy
So, don’t let an international money transfer get in the way of your dream. It’s easy if you go to the right place and get the right help. You can get the best exchange rates and the lowest fees and send your money overseas with no hassle at all.