Whether you are sending a gift to one of your relatives abroad or helping out a friend in a crisis, sending money abroad can be a difficult task. Not only must you take into account the currency differences, but many banks charge you for sending the money abroad.
How to Compare Your Options
The best way to compare the different types of money transfer options out there is to work out how much money will be received after all charges have been applied. In order to work this out, there are two main factors that you will need to take into account: the fee for transferring money abroad and the exchange rate.
While the fees that you and the recipient may be charged are obvious, individuals are often caught out by exchange rates. This can lead to your money not going as far as you would have liked when transferred abroad.
When comparing the different ways by which you can transfer money abroad, it is also important that you take into account how much you plan of transferring and whether this is a regular payment or just a one-off one.
How to Transfer Money Abroad for Less
Although bank transfers may be the most obvious choice for transferring money abroad, in actuality they can turn out to be the most expensive option. Indeed, there are a number of fees associated with bank transfers:
- Exchange rate
- Commission (about 2%)
- Service fee (between £10 and £40)
- Fee from the recipient bank (around 0.5%)
However, some banks allow you to transfer money abroad for free if yours and the recipient’s banks belong to the same banking group. Therefore, if you plan on regular transferring money abroad, it is a wise idea to look out for UK banks which have foreign branches. In addition, if you are transferring money from your UK bank account to a foreign account in your name, many banks will not impose a fee on the transfer.
If you want to send over a one-off payment of a small amount, there are a number of online services that can fulfill the transfer for you. Some online payment services require both you and the recipient to have an account with them; such is the case of PayPal. Other services such as Currencies Direct and Travelex require you to transfer the money to them and then they will send it on to the recipient’s bank.
If you want to transfer money regularly to someone that trust abroad, you may want to consider getting a specialist credit card for your recipient abroad to use. Specialist credit cards allow them to make payment abroad for the lowest fees and best exchange rates available. As the credit card is associated with a UK account, you will be able to pay off the balance at the end of the month.