Best Way to Transfer Money Abroad

Many choices exist for transferring money to and from Australia but what is the right option for you to send funds abroad?

Banks charge an arm and a leg so understandably most sensible people don't want to do that if you are making regular transfers or send large amounts. Alternately there a other services to choose from which can save you lots of money, but its frustrating to know which one is best for you.

In this page we break down all the best options available including:

  1. Online money transfer services (that work in conjunction with your bank)
  2. Banks
  3. Cash services such as Western Union or Travelex

Also don't miss our other money related info:

The options here are suitable for transfers between many countries including Australia, UK, Canada and US.

The Most Common Options:

You HAVE A BANK ACCOUNT in the country where you want to receive money:

  1. Inter-Bank Transfers » (transfer money from one bank to another)
    Most suitable for amounts less than $1000 or smaller once-off transfers
  2. Australian Money Transfer Companies »
    Most suitable for amounts greater than $1000 or regular transfers


You DO NOT HAVE A BANK ACCOUNT in the country where you want to receive money:

  1. Western Union and Travelex »
    Western Union come into their own when you do not have a bank account - Most suitable for amounts less than $1000
  2. Credit Card »
    Credit card transfers are most suitable for amounts less than $1000

1. Inter-Bank — Bank to Bank Transfer Services

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 who act as a third party is the exchange rates and fees (see below) and these can differ significantly.

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.

Bottom Line

For transferring relatively small amounts - irregularly, the convenience of not having to sign up to a third party service outweighs the extra costs you’ll incur by using an inter-bank service. However, if you want to make more than one transfer or transfer amounts over AU$1000, GB£750, €1000, US$1000 you will almost certainly save money by using a company dedicated to quickly moving money globally.

2. Money Transfer Companies

Specialist services now save many travellers, expats and exporters many millions of dollars annually. Companies like OFX and TorFX have pioneered these dedicated fund transfer services which have been warmly welcomed by those looking for a better option to banks or remittance companies like Western Union.

How to send money overseas

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) Secondly the overseas money transfer company then sends your funds via its own international bank account network.

Important: 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.

A fee often applies to the transaction, as set out below.

3) Your money is then deposited into your specified destination account.

OFX, for example, have offices in the countries where they send and receive money so you can send money and get phone or online assistance 24 hours a day with actual currency traders, which ensures everything runs smoothly.

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.

Bottom Line

Best for saving money and flexibility.

If you are sending money from your overseas account to your home bank account or back the other way you will save hundreds if not thousand by using companies like OFX or TorFX

If you are trying to choose between the two - TorFX is mostly telephone based and only deals with amounts of $2000 or more.

OFX is focused on its online services. They have a big operation in Australia, offer 7 days per week transactions and will deal with smaller amounts as well as large amounts.

Bottom Line: If you want step-by-step assistance TorFX is our top pick. Alternately, if you want more control over timing of your transaction our pick is OFX. A full review of TorFX from a Jobaroo fan can be found here and the founder of Jobaroo uses OFX - Full review of OFX here and here.

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.

Exchange Rate

Rates vary significantly from 0.7% to 2.5% 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 Yahoo! Finance for the latest interbank rates and compare services with this rate.

Note: Banks and transfer companies 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 is at the upper end.

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.

3. Western Union and Travelex

Western Union and Travelex are well-known companies that provide similar services. Sending money through either Western Union or Travelex generally involves in-person cash transactions.

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.

4. Credit Card

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 reciever 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.

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