International Money Transfer Fees and Charges
If you’re looking to transfer money overseas, whether it's to family, friends or into a bank account for your own extended stay, then the first thing you look at is probably the exchange rate.
But there are other important things to consider before making your transfer: international money transfers (IMTs) often come with hidden fees and charges that can quickly add up, and wind up costing you more than you bargained for.
We’ve run through some of the major ones here so you can keep ahold of as much of your hard earned cash as possible.
Foreign exchange fee
Foreign exchange fee is a major fee you’re likely to be hit with when making an overseas money transfer. How much you’re charged can depend largely on what provider you choose to make the transfer with.
- Banks generally always charge a foreign exchange fee on top of the margin applied to your exchange rate. This is usually the most expensive option for transferring money overseas.
- Specialist FX providers will often not charge a foreign exchange fee. These companies make their money solely through the exchange margin. What’s even better, is that this margin is usually lower than one that a bank would charge.
- Peer to peer providers usually offer the mid market rate - which means you won’t be charged an exchange margin - but they do charge a relatively small foreign exchange fee.
For a full rundown on the different providers, read our IMT vs bank transfer guide here.
Confirmed all the details of your transfer and then realised you have to change something? You’ll likely be hit with an amendment fee of around $25 to do so. So before you hit confirm, make sure you double check all the details to avoid this unnecessary cost.
If for some reason you decide you need to cancel your IMT, you can usually do so before it has been completed (often 2-5 days), but there are some conditions.
First off, there’s a cancellation fee, usually around $25 plus the overseas bank’s costs. Then, you should consider that the funds will be converted back to the original currency at the current exchange rate - so if rates have gone down, you could lose out there as well.
It’s also worth noting that cancellations usually come with the caveat that it’s a request only - which means if the IMT can’t be cancelled for some reason (usually because of the policies of the receiving bank), you’ll most likely still have to pay the fee.
Receiving bank fee
The bank in the country you’re sending the money to might also charge fees for their services in processing your international money transfer. Usually, the person receiving the money pays these fees, and there's not a lot you can do to minimise them.
If you don’t want the recipient of your transfer to have to pay the bank fees on your transfer (for example, if the money is a present), you can also sometimes opt to have this fee charged to you instead of them. But keep in mind, that will incur an extra charge, called a correspondent fee.
Other things to consider when sending money overseas:
While fees and charges are an important consideration, there are still even more factors to keep in mind before you go ahead with your IMT, including:
Online vs in branch transfer
Most IMT providers will offer the option to do your transfer yourself online. While this may seem a bit daunting, especially if this is your first transfer, it’s definitely worth considering, because the fees on online transfers are often lower than if you do the transfer over the phone or in a bank branch.
Although electronic money transfers can be done pretty much instantly, it often takes 2-5 days before an IMT is completed. Why? Often, it’s so the provider can verify your identity and details. If you can’t wait that long, there are providers who will transfer the money sooner, but expect to pay an extra fee for this speedy service.
What happens if the exchange rate is really great, but you’re not ready to make your transfer just yet? You can enter into a forward contract, which allows you to lock in an exchange rate, but make the actual transfer later.
Some IMT providers will require you to transfer a minimum amount, sometimes around $1,000. If you’re not planning to transfer that much, shop around for other providers who allow smaller transfers. Also keep in mind that there may be a daily upper limit on how much you can transfer, so factor that into your plans.
Steps for setting up your international money transfer
Once you’re aware of all the sneaky charges and costs that could affect your money transfer, you might be wondering just how to go about the process. Here are some of the basic steps that you’ll need to take when doing an IMT:
Step 1: Choose your IMT provider - remember to find the best deal, with low fees and a good exchange rate. To make the search easier you see our round-up of some of the best IMT providers from the Mozo Experts Choice Awards.
Step 2: Decide on your transfer amount.
Step 3: Crunch the numbers and work out how much you’ll be left with at the other end of the transfer - be sure to factor in fees and the exchange rate, and make sure you’re getting the most bang for your buck!
Step 4: Give your chosen IMT provider the details of the recipient.
Step 5: Book the transaction and pay your transfer amount - including enough to cover fees and charges.
Step 6: Your provider will then transfer the money.
What information will you need to set up an IMT?
Save yourself time and stress by having all the necessary details sorted out to send your money overseas. These include:
- Your personal details - this might include your name, address, email address, date of birth, country of birth and phone number.
- Your bank details - for the account that the money will be coming out of.
- The recipient’s personal details - usually name, address, email address and phone number is enough.
- The recipient’s bank details - this includes the person’s bank account number, as well as the bank’s name, address and SWIFT/BIC code.
Find an IMT provider
Now that you’re well-versed in the ins and outs of IMT fees and charges, it’s time to find a provider and make your transfer happen! Head over to our foreign exchange hub to find some of the best offers available.
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