When it comes to international money transfer, restrictions on currency movements are becoming more common. Meaning, you have to be careful when transferring money abroad as you would want to make sure that the money reaches the right person or entity, and there are no hassles. With that said, there are several factors to consider when transferring money around the world. In most cases, people look for the cheapest way to send money. However, there is no single money-transfer process that is cheaper or simpler than another.
Whether you are sending money back home or traveling overseas, it is essential that you consider all your options before receiving or sending money abroad.
With that in mind, if you are considering sending money abroad via your bank, the following factors will allow you to minimize the cost and minimize the total amount delivered to the recipient.
Let’s jump right into it.
#1 Check with your bank
First, you need to determine whether your bank allows free international wire transfers or lower-priced transfers. If the bank doesn’t, you need to find a bank or financial account that provides this privilege. Some financial institutions allow account holders to transfer money overseas free of charge if the transaction is done between accounts with the same bank. On the other hand, if you need to send money regularly to someone in another country, you should open an account under the same bank as the recipient. This is where a financial advisor would be of great help. Consider the services of a financial advisor and he/she will be able to guide you with the best practices.
#2 Consider wire transfer charges
According to many financial experts, wire transfer is one of the primary factors that add to the total cost of international transactions. However, this varies significantly among money-transfer service providers. On average, the lowest fee for outgoing foreign wire transfer could range around $40-$50. However, depending on the bank, the price may increase. For example, Citibank, one of the most prominent players in the financial industry charge around $70 per transaction. You may be inclined to go with the lowest wire transfer charge. So, you can look for an institution that charges less. However, the cost of transfer should not be your only consideration here.
#3 Determine the exchange rate
Determining the exchange rate is important but it is quite a difficult task since it keeps fluctuating every minute. Most people think that the exchange rate must be common at all banks and financial institutions. This is not true. As a result, many banks have made a lot of money from naïve customers in the past. You need to be aware of the exchange rate as it can surge the total charges. What hurts more is the hidden charges associated with exchange rates. You need to be vigilant with that.
#4 What is the transfer amount
The total amount you will wire is another factor determining how much money you will pay for the transfer service. Every financial institution has its own set of rules and regulations regarding transferring different amounts. So, check the transfer fee and the exchange rate fee properly before availing the service.
Once you determine all these factors, you can choose to pay for the transfer by credit card or debit card.