The best way to save money when transferring money internationally is to compare fees, exchange rates, and transfer speed. Across the world, sending money abroad can be done in a matter of minutes.
Digital banking and online money transfers have introduced the possibility of making international money transfers from the comfort of your own home and exchanging multiple currencies at your convenience.
International transfers, however, often come with high fees. Therefore, comparing different providers before sending money overseas will ensure you get the best deal. Here’s how:
- The mid-market rate: It is always better to get a mid-market rate when you send money abroad. Wouldn’t it make sense for everyone to use the same exchange rate when transferring money internationally? As it turns out, there is, indeed, such a thing. It’s called the mid-market rate and is the midpoint between the buy and sell price of two currencies. The difference is between what the buyer is prepared to pay and what the seller is willing to accept.
- Hidden fees: You will typically find that most banks and providers compensate you better for moving money internationally or exchanging holiday money. You pay an exchange rate fee as well as their transaction fee. They do not disclose the exchange rate fee, which is why they call it a hidden fee.
- Safety: If you choose a provider, make sure the provider complies with local regulations. In addition, they should comply with any international requirements that prohibit money laundering.
What is the best way to transfer money abroad?
Online foreign exchange companies are increasingly challenging traditional forms of international money transfer – banks and wire transfers. The benefits of these options might outweigh the inconveniences and costs for many.
However, the minefield of varying exchange rates and provider fees makes it difficult to calculate the best way to go about making an international money transfer. Depending on where you are sending money, you should choose the most secure method.
The following are a few tips to keep in mind when making international money transfers:
- Knowing what factors may impact your money transfers will allow you to improve your risk management.
- Providers should be chosen with care. Consider more than just their rates; consider their levels of service and methods of support in case something goes wrong.
- Choose the best time for your transfer. Is there time to wait for a better exchange rate, or do you need your funds exchanged right away?
- There are often hidden fees added to exchange rates by banks and providers. The customers are not often informed of these in advance.
- Find the mid-market rate online, also known as the interbank rate. This is the actual exchange rate that banks use when they are transferring money between each other.
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