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How to Avoid Bank Charges for International Transfers

Bank charges can drastically affect the value of your international money transfer, so it pays to be in the know. In this guide we will outline how to steer clear of the types of fees which commonly catch customers out.

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What are the different kinds of bank charges?

High street banks and other traditional financial institutions are known for charging a great deal for international money transfer services. Whether you need to make a one-off payment or set up regular currency transfers, it is worth considering the two following bank charges first:

Transfer fees

Certain banks charge a flat fee for outbound (sending) or inbound (receiving) international transfers, but others will charge a percentage of the total value. This means the more money that is transferred, the higher the fees. Other fees may include charges for making international transfers over the phone or in-branch; this is a common way of encouraging customers to send money online.

Exchange rates

The other most common bank charge is the markups on exchange rates. Banks are often criticised for creating their own exchange rates, which can be anywhere between 2 to 4% higher than the mid-market rate. For example, Barclays, one of the UK’s major banks, adds a 2.8% margin on exchange rates for transfers under £25,000

This kind of incentive is very attractive as it sounds like there is no cost involved when making an international bank transfer. Sadly, this is false. Banks offering these sort of deals will instead make their profit in exchange rate margins, presented to customers as the base rate. As alluring as “free transfers” seem, don’t take their word for it; find out the best exchange rate for your currency pairings before you agree to any terms.

When added together, these costs can equate to large amounts, ultimately resulting in a smaller sum reaching the beneficiary. As miniscule as some percentages may appear, they can make a big financial difference in the long run, especially for anyone repeatedly sending money abroad.

How to avoid bank charges for international transfers

Excessive bank charges can be avoided by researching the exact exchange rate beforehand, and if your bank charges a lot more than the mid-market rate, it is worth exploring alternative money transfer options.

We highly recommend international money transfer providers such as XE mid-market rate and OFX, offering competitive exchange rates and transparent fee structures. Please find out more about our top 10 money transfer companies.

Why do money transfer providers charge less than banks?

Banks offer a diverse scope of features and services ranging beyond international transfers, from loans to credit cards to overdrafts. Conversely, money transfer providers make international remittances their entire focus, which means they can guarantee the most competitive rates, easy-to-use platforms and instant delivery.

The influx of money transfer specialists worldwide was formed in response to the cross-border nature of modern finances. Funds are sent and received between different countries every day, and money transfer companies make it their business to serve the various needs of global users. This means the offerings are more streamlined and, as a result, potentially cheaper, whether you are transferring money with a credit card, bank account, or pre-payment platform.

Top 4 benefits of using a money transfer provider

  1. Better exchange rates: Money transfer companies understand the competitive nature of financial services therefore strive to match the exact mid-market rate and transparent prices. Find out more about exchange rates.

  2. Lower fees: Money transfer providers have lower overheads which means they are able to charge fees that are a great deal lower than bank fees.

  3. Specialist services: As foreign exchange specialists, money transfer providers tailor their services to meet the requirements of their customers. Whether you are dealing with exotic currencies, transferring to or from a remote country, or need funds moved within 24 hours, money transfer providers offer a variety of services.

  4. Daily transfer limits: A lot of banks employ a minimum or maximum daily transfer limit, whereas money transfer providers typically do not enforce this.

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April Summers
April Summers
April is a trained journalist and the Content Editor for She has 10 years experience writing about a diverse range of subjects, from financial services to arts and entertainment. When she's not writing about global remittances she can be found daydreaming about her next holiday abroad.