People need to send money abroad for lots of different reasons including buying or selling property, paying bills, helping out family or friends, purchasing goods or services, and paying staff that live in a different country.
For many, their bank or building society is there first port of call when it comes to transferring money. However, these are just one of a number of options available if you want to send money abroad, all of which come with pros, cons and different costs attached.
What are my options for sending money abroad?
When it comes to sending money abroad, you have three main options. You can use a bank or building society, a foreign exchange (FX) broker or a money transfer company such as MoneyGram. Banks are probably the safest, most reliable, option while money transfer companies are generally the quickest.
In the middle are FX brokers, which work best if you want to transfer larger amounts of money abroad, at least £3,000.
Bank or building society
Using your bank or building society is not only safe when it comes to transferring money abroad, but it’s also convenient as you can move money directly from your account without having to use a middle man. Plus, your bank will be able to walk you through the process and check you have the right information for the transfer to go through.
However, banks don’t always offer the best exchange rates, and transfers can take up to six days, meaning it might not work for you if you’re in a hurry.
If your bank has a branch in the country you’re sending money too and you need to make regular payments, you might want to look at opening a separate account in that country. That way, you can transfer money between accounts as and when reducing or eliminating any potential fees at the same time.
Money transfer companies
Money transfer companies can be found on the high street and online, with Western Union and MoneyGram being two of the best known. One of their main benefits is it’s easy to open an account and, in some cases, the person you’re sending money to can collect it straight away from their local branch.
However, transferring money into bank accounts can take several days. With online transfers, the recipient might also need to open an account and request that the funds go into their bank account instead of funds going in directly which, again, takes time.
The fees for money transfers can be high, especially for smaller amounts and it’s not always clear the exchange rate you’ll get. Some companies let you see the final amount in the local currency, which is a good way to work out just how many pounds it is costing you.
You can avoid fees if you need to send over £3,000 (average) and use an FX broker that specialises in international money transfers. The main benefits of a broker are they offer great exchange rates and same day transfers. However, you will need to set up an account with them, which can take time and their rates for smaller transfer can be significantly higher than banks or money transfer companies.
To find the best and most affordable option for you, you’ll need to do your research. Comparison sites will help you find out the best rates (and reviews) of money transfer companies and FX brokers but to find out more about bank rates; you’ll need to contact your bank directly as information isn’t always easily available online.
How much does it cost to send money abroad?
How much you pay to send money abroad will depend on the service you use, the amount your sending and the exchange rate at the time you make the transfer. Normally you will be charged a fee to send the money and the person receiving it will also be asked to pay a fee. You can, however, ask to cover these costs if you don’t want the recipient to be out of pocket.
Exchange rates change constantly and can have quite an impact on how much your money is worth once it makes its way overseas. Be aware of this and try, as best you can, to build it into any cost calculations.
How safe is my money when I send it abroad?
In theory, if you use a reputable firm, your money should be safe when you transfer it abroad. However, if something does go wrong or the broker you are using goes out of business, you don’t have any right to compensation. You can reduce your risk, however, by using companies regulated by the Financial Conduct Authority, as they must follow the rules on money transfers, which reduces the risks.
To reduce the chances of anything going wrong with your money transfer, make sure you check you have everything you need to complete the transfer and that all the details you’ve been given are correct before going ahead; otherwise you could risk your money getting lost in the system and not getting it back.
Unfortunately, there are scams out there looking to separate you from your hard earned money. Try always to use a reputable company and carry out your research before you sign up for an account. And remember, if a deal looks too good to be true, there’s a good chance it is and that you are being scammed, so it’s probably best to stay away and look for someone else to handle your money transfer.