There is a wide variety of reasons why people send money overseas, from purchasing a dream home in the sun to helping out a backpacking son or daughter. With such a range of reasons, it makes sense that, with different types of payment, your priorities will vary.
Wanting to send a payment abroad cheaply or conveniently will affect the method by which you make your payment. Get your payment option wrong and you could miss out on that dream home or get stuck with a poor exchange rate.
Below is a quick guide to the best money transfer options to suit your priorities.
I need it quickly
Money transfers abroad can be notoriously slow, sometimes taking a number of days, which, in the digital age can be hard to comprehend.
Plan as we might, sometimes a last minute bill payment to avoid getting in trouble with the bank or a quick payment to seal the deal on a new house is necessary.
Your best option in these circumstances may be to use a money transfer operator.
Transactions can be made online or over the phone and can often be completed within 10 minutes. Both you and the recipient will need ID handy.
It works by making your payment with debit card or cash, then passing on the reference number you are given, to your recipient, at which point, they can go to one of the money transfer operator’s locations and collect their money. PayPal is instantaneous also, but both recipients need access to their email addresses.
I need to send it somewhere remote
Many of us with children, will at some point see them venturing off on a gap year, to the most remote corners of the globe and in high spirits might end up using up their funds rather sooner than expected.
Should this happen when they’re off the beaten track, again, using a money transfer operator is probably going to be the best option.
Money can be sent abroad without the recipient having to access a bank account and many big operators have locations all over the globe.
I need a good deal
If you have a little more time to plan ahead, it’s worth enlisting the help of a specialist foreign exchange provider. They often have better exchange rates than you’ll find elsewhere and have lower fees.
They can do a number of things to ensure you get the best deal such as setting up rate alerts, whereby they watch the exchange rates for you and contact you when the rates are in your favour or reach an agreed rate.
The best thing you can do if you need a good deal, is to avoid using your bank to make the transfer!
I need to transfer a large sum
A specialist currency broker, again is a great option for transferring large sums of money abroad. In fact, many will only accept payments of £3,000 or more.
Because they tend to offer the best exchange rates and lower fees, you’ll ensure the maximum amount of your cash ends up in the hands of the recipient.
I need to transfer a small sum
A money transfer, Papal or your bank are all good options for transferring small sums of money abroad. Remember that your bank won’t offer competitive rates for these transfers so will be the least cost-effective option in this instance.
Some currency brokers will send as little as £250 abroad, so is an option worth exploring considering the lower fees and good exchange rates they may offer.
I need convenience
For convenience, your bank is probably the best option. It’s familiar, you’ve used it regularly and know what to do. If the cost of the transfer doesn’t matter to you, then this could be the way to go.
However, be prepared to pay 10-60 times more than you would using a more cost effective option and expect the transfer to take one or more days to complete.
I need to make regular payments
For regular payments abroad, a currency broker could be the way to go. They can set up what’s called a ‘forward contract’ or a ‘market order’.
Will Collins, Head of Private Client Dealing at Baydonhill explains, ‘Forward contracts allow you to fix that day’s exchange rate up until the time when you are going to need the funds. This is the most secure way of budgeting for the cost of your currency.
A market order works by you instructing your currency dealer to proceed to purchase a set amount of currency for you if a certain exchange rate becomes available. This is particularly useful if you are not able to take the time to monitor the exchange rate daily, as the deal can be done on your behalf automatically if your target level becomes available.’
Currency brokers can often fix the exchange rate for up to 2 years, allowing you to plan and budget effectively quite far into the future.
As you can see above, a currency broker is often the best way to go when transferring money abroad.
There may be instances where another option might be suitable, but if you’re trying to find the best rates, lowest fees and to have the most control over regular payments abroad, a broker is the way to go.