International money transfer can be a costly process. Banks and money transfer companies charge sizable fees to deliver money to different countries. Unlike using a check or cash to make a purchase, there are hidden costs like currency conversion and exchange rates that can erode the amount sent when dealing with international transactions. Despite the costs, sending money abroad is often an unavoidable expense. That’s why it’s important to understand how to save on international transfers and rate shop for the best deal.
I. Understand Bank Fees
When sending money to countries around the world, it’s important to understand all the fees associated with international transfers. Many banks will charge an outgoing fee, a percentage of the amount sent, and an incoming fee, which is generally lower. This fee structure can be different at each bank, so it’s important to understand what you’ll be charged for each transaction.
II. Compare Exchange Rates
It’s also important to compare exchange rates when sending money abroad. Every time you make an international transfer, the entire transaction is converted from one currency to another. This means that the exchange rate you’re being charged on the transfer will have an effect on the amount you’re sending. By doing your due diligence and comparing several exchange rates, you can ensure you get the best available rate on the transfer.
III. Send with a Money Transfer Company
Money transfer companies are becoming an increasingly popular way to send money abroad. Typically, these companies are able to provide more competitive exchange rates as well as a lower cost for international transfers. Be sure to shop around to find the most competitive rates. Many of these companies offer transfers in a variety of currencies and provide other services like cash pickup, which can simplify the process of getting funds from one country to the other.
IV. Utilize Alternative Money Transfer Options
There are also alternative money transfer options like PayPal, Venmo, and prepaid debit cards. These options can sometimes offer lower costs and quicker turn around than traditional banks and money transfer companies. Be sure to research their fees and features before settling on one of these solutions.
V. Pay Close Attention to Transfer Fees
When sending money abroad, it’s important to pay close attention to the fees associated with the transfer. Bank and money transfer company fees can vary significantly, so it pays to do your research and compare fees across several providers. When using a money transfer company, be sure to negotiate the fees and find the lowest rate per transaction.
VI. Consider Switching Banks
Since international transfers involve transferring money between institutions, you may want to consider switching banks if you’re unhappy with the fees. Banks may offer certain promotions or discounts for international transfers, so you can save quite a bit of money by shopping around. Additionally, some banks specialize in international transfers, so you may be able to benefit from a more comprehensive service.
VII. Leverage Digital Payments
If you don’t need to send an international physical payment, consider taking advantage of digital payments. These payments can be received and sent in any currency, usually for less than a few dollars. Online payment systems like PayPal, Venmo, and Google Wallet can make transfers between individuals quick, convenient, and low cost.
VIII. Set Up Automated Transfers
If you need to make frequent transfers, then you can benefit from setting up automated payments. Automated payments ensure that money is transferred on a set schedule and ensures that you always have the right amount in the right place. This removes the burden of having to manually transfer money each time and helps you save on fees.
IX. Monitor Exchange Rates
Exchange rates can fluctuate significantly, and a few extra dollars per transaction can quickly add up. Monitor exchange rates regularly to make sure you’re always getting the most competitive rate. Many banks and money transfer companies offer rate notifications, so consider signing up for those tools to stay on top of your international transfers.
X. Cut Out the Middleman
Finally, you can save money on international transfers by cutting out the middleman. If you have family and friends in other countries, try using peer-to-peer (P2P) payment services to wire money directly. These services eliminate the need for banks and other institutions, which can help you save on fees.
International money transfer can be a costly process, but there are several ways to still save money. Understand bank fees and compare exchange rates to ensure you’re getting the most competitive rate on each transfer. Consider sending money with a money transfer company or utilizing alternative payment options. Additionally, don’t forget to pay attention to transfer fees, switch banks if necessary, and leverage digital payments to save money on your international transfers. Monitor exchange rates regularly and for extra savings. And if possible, try to eliminate the middleman and opt for peer-to-peer services. By understanding the process and following best practices, you’ll be able to make smart international transfers and save money in the process.