Travel restrictions are rife at the moment. But how do you send money abroad?
Transferring money overseas is pretty easy. The problem lies in the large number of money transfer companies to choose from. The best course of action is to consult an international money transfer service comparison site like Money Transfers.
Let us look at the principal factors that should determine your choice of an international money transfer service:
1. Banks may not be the best way to transfer money abroad
Though banks have a formidable reputation as legacy financial institutions, they may not offer the best terms for making international money transfers. Apart from the fact that you might have to physically visit a bank to initiate a transfer, you will be charged quite a sum for their service.
Not only will they charge you a fixed fee, but also a margin on the inter bank rate that may be as high as 5%. It is far better to use the services of a reputed online transfer service instead, which will be cheaper and way more convenient.
2. The exchange rate matters
The exchange rate you get at the time of making an international money transfer determines how far your money will go in the converted currency. The fact that currency rates fluctuate all the time makes it very difficult to time your transfer with the optimal exchange rate.
One way of dealing with this is by entering into a forward contract that lets you lock in an exchange rate for as long as a year, thereby protecting you against currency fluctuations. You could also place a limit order with which you can decide a target exchange rate which will kick in the moment it is reached. Of course you need to be flexible with your money transfer timelines in such cases.
3. Send one large amount rather than lots of smaller ones
It is cheaper to remit a single large sum, instead of sending across multiple small sums. Besides, you won’t have to go through the process of initiating the transfers again and again, apart from not having to pay the transfer fee multiple times.
4. Use a customised service for sending small or large amounts abroad
There are international money transfers companies that specialise in helping remit small amounts. Similarly there are companies that specialize in sending large amounts. Needless to say that you will get the better money transfer terms by going to the type of international transfer service that is best attuned to your needs.
5. The total cost of service matters
There are international money transfer companies that offer a favourable exchange rate but charge a high fee and vice versa. You have to see what the total cost works out for you and go with the service that charges you the least for the kind of international money transfer that you want to initiate.
6. Opt for expeditious transfer only in emergencies
There is no point in paying more for an expeditious international transfer of money, unless you are faced with an emergency. If there is no need to transfer money within hours, you can save on the fee by opting for a standard transfer.
7. Try not to transfer funds overseas using credit cards
Transferring money abroad, using a credit card may not be a good idea, as it is way more expensive than a wire transfer. Similarly money transfers made over the phone are expensive too. By being watchful about such things, you can make the cost of transferring money abroad that much lesser.
8. Check if the recipient will be charged a receiving fee
You should check if the recipient of the international money transfer you have initiated will have to pay a receiving fee or any other miscellaneous charge. This prevents any unpleasant surprises by the person you are sending money to.