BLOG: The dos and don’ts of international money transfers
Once a chore, transferring money internationally has suddenly been transformed into a lucrative exercise for both companies and customers. But how can you actually benefit from simply moving money from one account to another? It’s easier than you think – provided you know what to look out for.
DO shop around
The first, and probably most important, piece of advice is to really research which provider is best for you. Remember: time you put in now, is money and time that you save later. If you’re currently using your bank’s forex service have a look at its biggest competitors, how do they match up? Having said this, it’s crucial you only use reputable companies, as they’ll be better able to weather economic storms. Make a shortlist of three or four contenders. But don’t pick a winner until you’ve considered how they perform against the rest of our checklist!
DON’T forget to look for hidden fees
One of the main reasons people lose out in forex, is due to the extortionate fees companies charge. This often comes in the form of a transaction fee (maybe as much as £25 per transaction). Sometimes you’ll also be hit with a receiving fee when the money arrives in the secondary account (worryingly, this cost often isn’t even known until the funds have cleared!). Sounds unfair, right? But there are lots of companies out there that won’t charge a receiving fee and have significantly reduced transaction fees. Forex doesn’t need to be a money draining exercise if you know where to look.
DO keep an eye on exchange rates
You don’t have to be an expert banker to keep an eye on changing global exchange rates. This helps you see how much you should be entitled to when transferring money abroad. Some foreign companies will have a tool or table to check the latest fluctuations, but these are also easily checked on the main exchange websites.
This will also help when you’re shopping around for your forex provider: if you know the current exchange rates, you’ll also know if you’re getting a good deal. The fact is, the rate you see scrolling across the screen on financial news will never be the rate you receive as this is the ‘trading rate’. Make sure you always ask them for transparent rates for the moment of transfer – not many will give this away unless asked.
DON’T neglect security
You may be fooled into thinking any forex company you choose to work with will have the best security in place. If you are working with your bank, this should be the case, and the majority of competitors will of course be secure – but it always pays to check. All sites should have a security button somewhere on the website, explaining what their features are – their transaction pages should also contain a secure setting in the toolbar.
You should also take a few minutes to check that the company you use is registered and licensed with the right institutions. In the UK, this should include HMRC and the Financial Conduct Authority.
DO think about convenience
Think about when you need your money to reach the foreign account. With many high-street banks, money can take between eight to ten working days to arrive, whilst a good forex agent can complete this transfer within one to three working days. Some will offer an even quicker service if required, so make sure you find out exactly how long you (or the recipient) could be waiting.
Another point to consider is whether you can complete the entire process online. Many banks or companies will require you to visit a branch, which can add on extra time that you may not have factored in.
Finally, DON’T panic. This needn’t be a dreaded or complicated exercise. Find the best forex provider using the advice above, and you’ll benefit from a reliable service and more money in your account.
Sable Group offers financial planning, mortgage, tax and investment advice to individuals and business clients.