There are many instances where you will need to transfer money internationally either on a regular basis or as a one-time deal.
You may work as a freelancer and need to send (or receive) an invoice fun, you may be supporting a child studying abroad, you may be making an investment (such as in real estate), or you may have international suppliers for your business to name a few things.
Regardless, your priorities for sending or receiving money overseas will remain largely the same: you want to do so speedily, cheaply, and most importantly, safely.
Here are the top tips for sending money overseas as cheaply and safely as possible:
Choose A Reputable Service
If there is only one piece of advice that could be given on how to sending money overseas, it would be to use a reputable money transfer service such as Remitly. You will want to carefully and thoroughly research any money transfer service that you use before you choose to work with them.
Reputable third party money transfer services are also often the best way to send money overseas. Not only are they safe, but they will also be cheaper and faster than most other options such as a bank wire transfer.
You can either walk into the physical establishment of the transfer service to complete the transfer, or you can complete the transfer online or through an app if they have it.
Watch Out For Fees
While we all wish sending money internationally would be free, unfortunately that’s not the case. After all, money transfer services have to earn a profit, don’t they?
One way they earn a profit is through charging you a fee. The transfer fee will be added onto your transaction, and often without you being notified with it, so you’ll need to confirm what the fee is for your transfer service.
In order to pay as low a fee as possible, you’ll need to find out if the transfer service charges a flat rate or a percentage. Believe it or not, the percentage option is usually cheaper.
If you are charged a flat rate, the rate will almost always be between $40 to $80, with $50 being the typical rate. For the percentage option, it will almost always be between 1% to 5%, with 3% being the most common option.
Let’s say that you are transferring $500 overseas in a hypothetical scenario. 3% of $500 would be $15, which is far less than the $50 flat rate. Thus, you can see how paying a small percentage versus a flat rate would be cheaper.
Keep An Eye On The Exchange Rates
There’s one more way how money transfer services make money as well: through margins on the exchange rates. In fact, the amount you pay on the exchange rate could be greater than your fee.
The exchange rate is simply the conversion rate of your currency into the currency of the country you’re sending the money to. Exchange rates are constantly shifting, and usually they will be higher or lower depending on the service.
What you need to do is research which money transfer services have the lower exchange rate, and then further research which margins they take out on that rate.
Usually the margin of the exchange rate that the transfer service will charge will be anywhere from 3% to 6%.
What all this means is that before you can send money abroad, you will need to pay both the fee and the exchange rate margin. Added together, that can certainly be a larger expense than you were expecting, but you can reduce it if you…
Send More Money At Once
When it comes to overseas transfers, it is cheaper to send a larger sum of money versus a smaller sum. In other words, sending $5,000 all at once would be cheaper than sending it periodically in five $1,000 increments.
Think about it, if you’re going to be paying both the fee and the margin on the exchange rate, wouldn’t you ultimately be paying less versus if you were to send the money all at the same time? You almost certainly would be.
Sending Money Overseas
Truth be told, transferring money internationally is really not that big of a hassle. In fact, it’s far easier today than it was in years previously due to the large number of different options that are available.