How to save on international money transfer
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Sending or receiving money overseas is widespread, and an international money transfer can be a great idea. However, many hidden costs come with transferring money abroad. Sometimes, you can pay more than you should in transfer and forex exchange fees, which generally affects your budget.
How to save on international money transfers is a common question that often arises when most people decide to send money abroad. If you’re running a business, you need to cut costs as much as possible, including the cross-border money transfer costs. The remittance market is highly competitive, and it’s easy to overlook the essential things in favor of lower transfer fees or higher exchange rates.
You could be saving all kinds of cash on your international money transfers. Here’s a guide to doing so:
- Open an overseas account
One way to save on your international money transfers is to open an overseas account in the country where you’re sending funds. Suppose your recipient has an account in the same foreign bank as you, then you can log in to your online banking and make a free transfer.
If your recipient doesn’t have an account at the same bank, you can still save on costs. Many foreign banks allow their customers to make cheap or free transfers from one customer’s account to another within that country. The fees are often lower than those charged by traditional banks for sending money abroad.
- Shop around for the best deal
Your bank might offer reasonable rates and low fees, but they probably aren’t the cheapest option available. Therefore, it’s always worth shopping around for the best exchange rate and lowest fee when making an international transfer. Comparing several different options is an excellent way to find a service that meets your needs at a lower cost than other providers.
Take the time to compare these providers and see which one offers you the best deal for your needs. Find out how much they charge for their services and how long it takes for them to complete the transaction. You should also find out whether they charge a flat fee or if they also include an exchange rate fee. The best international money transfer companies will provide this information on their website to make it easy for customers to access.
- Have a multicurrency account
You may also want to consider having a multicurrency bank account if you send money internationally regularly. This type of account lets you keep multiple currencies in one place to send and receive money from different countries with negligible foreign transaction fees.
Moreover, it means you won’t be affected by exchange rate fluctuations if the dollar strengthens against other currencies in the time between getting paid and sending it overseas. You can also set up regular transfers, so you always have enough of your home currency on hand when you need it.
- Time your payments
The concept of mobile wallet transfers – 3d rendering
When possible, time your payments and transfer money in advance if the exchange rate is in your favor. Find out what the market rate is at any given moment by looking up the latest conversion rate online.
If the exchange rate is likely to rise in the near future, set up a forward contract with your bank or broker. This lets you lock in today’s rate for a transfer that’ll take place later. Of course, you’re taking a risk that rates might fall instead of rising, but that may be worth taking if you face steep conversion fees.
You may also want to consider whether you can delay payments and advance them. This gives you more flexibility to take advantage of favorable rates. If your payment isn’t urgent, you could wait until the exchange rate improves before sending funds overseas.
- Eliminate intermediary banks
Most wire transfers involve at least two banks—one at each end of the transaction. The recipient’s bank, in particular, often charges steep fees for incoming transfers, which can eat into what you’re sending. You can avoid these costs using online providers that eliminate intermediary banks. You can also use them to send money internationally without paying hefty markups on foreign exchange.
However, be aware that these services may not offer the same level of protection as banks, so do your research before deciding on who to use. Also, when looking for online transfer services, ensure that they’re available in the country you’re sending money.
Conclusion
International money transfer has become a common practice today as people are looking for ways to send money abroad, and businesses are also expanding operations across borders. As such, cross-border payments have become essential parts of the business. Therefore, learning ways to cut transfer costs and save money is necessary.
