So you need to transfer some money abroad and think the best and quickest
way to do that is online. Fair enough, you're probably right. Now, you may want
to use an online money transfer specialist, someone like OFX or
TransferWise. But that might not necessarily be the best option for you.
Let me highlight four key factors to consider when transferring money abroad.
Number one: safety. Now the most important part of any overseas payment is the
security of your funds. Luckily, Australia is one of the most
highly regulated countries in the world. However, it doesn't mean that we are
completely scam free. But what it does mean is that we have the opportunity to
do some digging into any company that we want to enlist for help. Which brings us
to our next point. What are our options? When it comes to transferring funds
abroad we essentially have two choices, to go through a bank or to go through a
specialist company. In terms of a specialist company you're looking at the
likes of PayPal, TransferWise, OFX, Western Union, TorFX, HiFX, WorldFirst
as well as a plethora of other small businesses too. Keep in mind each of these
companies will charge a different fee and have different exchange rates
depending on what currency you need and how much money you need to transfer. I
cannot stress this enough: it is absolutely crucial to compare all the
exchange rates and fees of all the options available to you in order for
you to work out the total cost of your transfer. This is the exact moment where
doing your homework will result in you saving money. Now you might think all of
this is a bit of a headache or just too much of a chore and it may urge you just
to go to your local bank because it's easy. Point number three: should I avoid banks?
In short the answer is: absolutely. Banks typically charge between eighteen dollars
dollars and thirty two dollars for an international money transfer.
Additionally the exchange rates they offer are nowhere near the interbank
rates you will see on Google or XE.com. Most specialist alternatives will offer
exchange rates and a flat of between zero and ten dollars. But let me lever
with you here for a moment. Realistically, if you're transferring less than one
thousand dollars overseas you may want to use a bank. It might not be the
cheapest option for you but it may very well be the quickest, easiest and most
efficient one. However, if you're dealing with sums greater than one thousand
dollars avoiding a bank is well worth the effort. Which brings us to our fourth
and final point: how to use a specialist company. Now, the standard set up is as
follows: First you set up your account. Thankfully,
you only have to do this once. You just register your details and provide
identification. Next you make your transfer. You will need to provide the
bank account details of the person you are transferring the money to. This is
also the point where you lock in the exchange rate. Finally you will have to
pay for your transfer. Here's the catch before you can transfer your money
overseas, you will first need to pay for it. All companies provide their bank
account details for a direct bank transfer. Some companies even offer BPay
or allow you to pay using a debit or credit card. So, the final verdict. Well
we've established that there are safe and cheaper alternatives to transferring
money abroad than using a bank. The fees are lower but more importantly the
exchange rates are dramatically better. Using a specialist like OFX or TransferWise
does take a little bit extra time and effort but it is well worth it
especially if you're transferring over $1,000. Just be sure to compare your options.