How you can save more on your overseas money transfers
This article was contributed by CurrencyFair.
The traditional bank works because of the sheer variety of services it provides – from keeping your money safe to offering loans, investment plans, and sometimes even insurance – all accessible from your phone. It makes sense then that if you were to send money abroad, you would do it with the transfer provider that has always been readily available to you. But are you getting the best value for your money?
Unlikely. When you take into account the transfer fees, exchange rates, and other variables, you'll find that there are alternative money transfer services that give you better value. In this article, we break down some of the key factors which can affect your money transfer.
Look for providers with low transaction fees
Where do you usually look when you want to send money to family, friends or a business partner abroad? Many individuals who need foreign currency often turn to the traditional bank, a foreign exchange broker, or PayPal if they’re a little more tech-savvy. While these providers have a long-standing reputation for providing a safe, reliable, and satisfactory service, there are better options in today's vibrant fintech environment.
If you don't already know, these traditional platforms charge fees based on your home country, the payment’s destination country, and whether you use a bank transfer, debit or credit card. The fees can be hard to figure out, and often customers are left to play a guessing game of how much they are going to be charged on their transfer – and it's more often on the higher end.
Alternatively, specialised global money transfer providers help you get value for your money in different areas that you may not know was possible. They are often as fast and reliable as your banks and are regulated by official authorities like MAS. For example, CurrencyFair charges a fixed price of $5 per transfer – simple, straight-forward, and big savings especially for transfers of a large sum of money.
Keep an eye on the news
Depending on the money’s destination, your foreign currency may be up against a great deal of market fluctuation. Major political and business developments like the arrival of recession, Brexit, and international trade wars have produced a great deal of currency volatility. That is to say, the value of a particular currency varies widely over short periods of time.
When you're aware of what's going on around the world, and with mid-market rates on Google, it could help you find opportune moments to make your foreign payments and money transfers. Google’s exchange rate tool is also a useful benchmark to assess how much your money transfer provider is charging you.
Many vendors have hidden fees and the result can be an exchange rate that is very unfavourable. It is recommended that you compare the rate you see on Google to the rate offered by a transfer service before making any money transfer. CurrencyFair, for example, never strays further than 0.6% from the exchange rate, whereas banks often charge multiples of this.
Set a rate alert
If you’d like to take a more passive role in knowing when is the right time to make an exchange, CurrencyFair just might be right for you. In their foreign payments platform, customers can create ‘Rate Alerts’, where they can decide in advance an exchange rate that they are after.
When the market moves and the exchange rate is in your favour, you'll be notified and you can then make the transfer at the opportune moment. If you use foreign exchange providers that do not offer this automated alert, you'll probably have to rely on a third-party app. The trouble of that is that the rates on third-party applications will differ from the rate offered by your money transfer service, which may mean more hassle for you.
Set your own rate and get matched
It can be incredibly frustrating when your foreign money transfer is dependent on so many external factors like the stacked hidden fees, or the rippling effects of global news. That's when you should consider a transparent money transfer service that lays out all rates and fees.
CurrencyFair has another feature in the form of their Marketplace. You set your preferred exchange rate for a particular currency, and once they find another customer who wants to make an opposite transfer, your orders will automatically be matched. With this function, you might even get a better rate than what you can get on Google, and the cost is a mere $5 per transaction.
There are many ways that you can save on foreign money transfers but most people are not aware of them. Whether you’re sending a one-off lump-sum fund or regular remittances, the amount you lose on hidden fees will slowly add up if you do not pay close attention. With CurrencyFair, customers who are expats, their family members, and global business people will benefit from a fairer foreign exchange that comes with a simple, fixed-fee structure.
Try out their handy Conversion Calculator below to see how much you can save.
If you're interested to sign up with CurrencyFair, you should catch their ongoing promotion where new customers get 3 months of Unlimited Free Transfers if they sign up before 31 December 2019.