International Money Transfers
3 Cheapest, Fastest, Safest and Most Convenient Ways
You probably know, banks (while convenient) charge an arm and a leg and there are now many alternatives to choose from which can save you lots of money but it's frustrating to know which one is best for you.
In this page we clarify all the options available including:
Each of these has advantages and disadvantages which we will discuss.
First Things First
There are a couple of essential things you should know to save you a lot of time.
- Banks are costly but they can be convenient for once off transfers
- Money Transfer Companies are almost always much cheaper than banks but vary enormously (which we will cover) in terms of costs and services.
- Remitters while usually the most expensive, are the only option available which does not involve bank accounts.
Transferring money from one bank to another can be a fairly straight forward process and can be done online or in the branch. The downside of inter-bank transfers is that fees and exchange rates are usually relatively high.
The big difference between transferring money from one bank to another bank and money transfer companies (which we cover next) is the exchange rates and fees (below) and these can differ significantly.
How it Works
- Most banks worldwide will provide facilities along with your bank account so you can transfer money to an overseas bank account including Australia, Britain, Canada and the United States.
- You will need to have the SWIFT number and/or the IBAN for the receiving bank. You will also need the account details of the receiving account, the address of the receiving bank, the account name and often the receiving bank's address.
- For transfers to Europe (including the UK) ask the receiving bank for the IBAN is an international standard for identifying bank accounts across national borders).
- Sending money between Australia and Canada generally requires the SWIFT number of the receiving bank.
- The amount you can transfer for each transaction is often limited, however the limit varies widely between sending banks.
- Bank transfer fees are generally around — Australia $20, Canada $20, Europe €15, Britain (UK) £15, United States $15 for their standard services and about double that for priority services.
- Note that receiving banks sometimes also charge a fee - so be sure to check to avoid surprises.
- Bank transfers rates for international transfers are not competitive.
- You can use banks to send money to either yourself or to a third party.
|The countries you can send money between is generally not limited.||Costly compared to dedicated online International Money Transfer Companies.|
|No need for an internet connection if you don’t mind going to the bank’s branch.||Most banks limit the amount you can transfer per online transaction.|
|Online services are also possible if you have internet banking access.||For most banks you cannot easily check the currency exchange rates online.|
|Safe international funds transfer.||Receiving banks will often charge a fee on top of the sending bank’s fee.|
In our opinion, there really is no good reason to use a bank to transfer money overseas these days. It used to be that for transferring once off amounts the convenience of not having to sign up to a third party service might have outweighed the extra costs you would incur. However while money transfer companies still require you to sign up this step has been made easy to do and the service benefits you get when you are making transfers far outweigh the initial signup process.
Money transfer companies save travellers, expats and businesses many millions of dollars annually.
But which one is right for you?
We have personally used all the services we recommend and we have written in depth reviews for each - including analysing 1000s of negative reviews to really understand what we are dealing with.
Each has advantages over the others which may make them a clear favorites.
Rediculous transparency and wonderfully low fees for smaller amounts: You can use the TransferWise widget to see the fees you will pay. For amounts below $7000 USD, £4000, $9500 CAD/AUD they make it easy to meet their sign-up requirements. While mostly online focused they do have greta telephone support although that is rarely needed.
Best rates: Even for small amounts you will see OFX is significant cheaper than a bank, but as the amounts increase OFX gets cheaper (in percentage terms). For amounts above $7000 USD, £4000, $9500 CAD/AUD their combination of online and 24/7 telephone support as well as a network of offices in many countries makes them hard to beat.
Best service: While TransferWise and OFX enjoy excellent reviews on the many review sites, TorFX provides a quote here based on the amount you want to send and goes one step further when it comes to sign-up as they tend to be very telephone oriented from the outset. They also have offices in the UK and Australia which operate during business hours.
How it Works
Money transfer services follow a simple three step process.
1) First you move the amount you want to send from your bank account to the bank account of the money transfer company.
2) Then the overseas money transfer company then sends your funds via its own network.
Usually you do not have to do anything for this step because you can lock in the rate from the outset. Alternately when the money arrives overseas you can choose to wait for the right exchange rate (real time) or you can have it exchanged automatically upon arrival.
3) Finally your money is then deposited into your specified destination account.
Money transfer companies are great at keeping you informed at each step of the way. Generally they use emails and SMS to update you.
- Can offer exchange rates and transaction fees that are much better than banks.
- Offices in multiple countries means you can always speak with or contact a currency trader for assistance. OFX for example is 24/7.
- To set up an account these companies usually require identification in the form of a copy of a passport/driver’s license and a signed bank statement (of the bank where the funds are coming from) showing your current residential address.
- Minimum amounts apply
- OFX allows payments can also be made to credit cards in Australia and New Zealand.
- For an additional fee, TransferWise enables you to use a Credit or Debit Card to pay for the transfer.
|Competitive: Exchange rates and fees that are designed to beat the banks.||You must have a bank account in the country from which you are transferring and which you are receiving (the latter is required only if you are sending to yourself).|
|Flexibility: Can pay off credit cards back home or also send money to friends and family — all you need are the recipient’s bank account details.||You must have access to a secure internet connection.|
|Ability to lock-in exchange rates||You must have access to either online banking or telephone banking through your current bank.|
|Safety and Security: To operate in a particular country the regulations for that country must be met.||Payments using cheques or credit cards are not accepted — electronic funds transfer from your bank account only.|
|Eligible countries are limited — be sure your home country is covered before signing up.|
Choosing a money transfer service, like the ones mentioned above can save you up to 8x the cost of using a bank. TransferWise is a standout for amounts below $7000 USD, £4000, $9500 CAD/AUD for its costs, transparency and fees.
Above this amount and OFX and TorFX better option in our opinion as they become cheaper as the amounts increase. Because OFX and TorFX are geared towards larger amounts from the outset they also get all the regulatory requirements out of the way up front which can save a lot of hassle later on.
Exchange Rates and Fees
When you are comparing costs between banks and services, there are two major considerations: Exchange Rate + Fees. Choosing the cheapest way to send money overseas to or from Australia depends on the amount you are sending. For example, a service where the exchange rate is less competitive but fees are zero is usually the cheapest way to send money below a few hundred dollars. Alternately for amounts more than a couple hundred dollars the fees become less important as the exchange rate becomes a bigger part of total costs.
Speed may also be an important factor that you need to consider with typical times ranging between 3 and 7 working days.
Rates vary significantly from 0.4% to 2% for transfer companies, 2.5% to 4% for banks and between 7 to 9% for remittance companies like Western Union.
The best way to see if you are getting a fair exchange rate is to compare the rate offered with the official “interbank” or “wholesale” rate. Rates of competitive providers should fluctuate on a real-time basis. Banks exchange rates are usually set at the start of the day.
Check out for the latest interbank rates and compare services with this rate.
Note: Banks and transfer companies generally show the interbank rate only on their website, they do not show the exact rate they can offer until you are logged in and in the case of transfer companies the rate becomes more favorable as the amount increases.
Banks and transfer companies will generally charge some kind of fee per transaction which generally ranges from $15 to $30. For amounts over $1000 the difference between the exchange rate offered and the interbank rate is greater then the fee.
Some banks and services will advertise “free” transfers but the exchange rate offered will cover their costs.
Also important to note, when using your bank to send money overseas there are usually fees charged by the receiving bank. The fees charged can be as high as $50 for the hassle of dealing with your overseas incoming funds. These fees does not occur with a transfer company because they have a bank in the receiving country and simply pay the receiving bank in the local currency.
Transfer companies are typically two to three days faster than a bank because they have a bank account in both countries and just need to recieve money and send money in the local currencies. A bank on the otherhand slows your money down because they have to deal with foreign banks and all the checks and balances that need to occur in the old school banking system.
Transumo has more info about international money transfers here.
Also don't miss our other money related info:
- Opening a bank account in Australia (You will need one of these before you can do anything!)
- Getting a Tax File Number (You need one of these to get paid by an Aussie employer)
The good news is that outlets exist nearly everywhere in the world. Western Union will pay out only in cash. However in some countries, Travelex will transfer cash to a bank account rather than require an in-person pick-up.
|The countries you can send money overseas between is generally not limited.||Expensive compared to dedicated online transfer companies and even banks.|
|If you do not have access to a secure internet connection or do not not use online banking, you may have to do an in-person transfer.||The recipient will likely have to pick up the money in cash and in-person.|
|Safe international funds transfer.||You have to actually find a Western Union or Travelex outlet, rather than simply logging on to your computer.|
A Word About Credit Cards
If you are in need of money from overseas relatives or friends many people consider sending money by credit card. To do this the person sending the money simply pays the credit card of the person overseas in their local currency. The receiver overseas will still have to pay the banks uncompetitive exchange rates at the time of purchase but in terms of speed, ease and security - for small amounts, a credit card can be an excellent way to go.
If you want to save a significant percentage on the exchange rate you will better off using an dedicated money transfer company, then using a credit card in the currency of the country you are using it.
Disclosure: Some of the links contained in this page are affiliate links. Clicking on these links may result in us being paid a commission. That said, this does not come at any additional cost to you. We have also linked to services that we think may be better for your needs in some situations and these do not contain affiliate links. We hope you find a service that is best for your needs.