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Free Money Transfers

Understanding the finer details of the “free money transfer” deals on the market can be a time-consuming task for anyone searching for the best deal. However, nothing in life is free, and in a bid to manage expectations and reduce disappointment, we outline what to expect when scoping out a free international money transfer.

Mehdi Punjwani
Author 
Mehdi Punjwani
6 minutes
June 9th, 2023
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What is a free money transfer?

A ‘free money transfer’ would usually be defined as when you can transfer money to someone without paying any kind of fee or charge.

Understanding what “free” means

Although a company may advertise as a low-cost option, some “fee-free” services still come with a price, often in the form of hidden markups on exchange rates. It is important to know the true mid-market rate for your currency pairing, before you send money abroad with a third party provider. This enables you to get the best value for your money, without being charged hidden fees.

There may also be a lack of transparency, depending on the provider, which may result in you being stung by unexpected charges, after the fact. In order to avoid this, we recommend using providers that offer total transparency throughout the transfer process, presenting the overall cost without failing to mention certain details.

How do I make a free money transfer?

Type of providerFree domestic transfers?Free international transfers?
Money transfer providersYesCan be fee-free or free conversion, but not both
BanksNot alwaysNo
Apps like Cash App and ZelleYes, between usersNo

You can usually send money within your country for free; for example, apps like Zelle and Cash App offer free domestic money transfers between users in the US.

However when it comes to making an international money transfer, it’s a different story. The cost to send money abroad is normally broken down into two parts - a transfer fee and an exchange rate markup. A ‘free’ money transfer would technically mean neither of these charges apply, but this is almost never the case.

Some money transfer providers might offer ‘fee-free’ transfers, where there is no upfront transfer fee to pay. Examples of this include XE, TorFX and Key Currency. However there is still a charge to be paid in the form of a markup on the exchange rate.

Other providers, like Wise and Atlantic Money, do not add any markup on the exchange rate - so in this sense the currency conversion is free. However you do then need to pay an upfront transfer fee to send money.

Can I send money for free with a bank?

In the US domestic bank transfers usually have a fee, but the cost of international bank transfers is even higher. If you use a bank to transfer money, you could be faced with extra costs including handling and intermediary fees as a result of the SWIFT banking system.

This is why we recommend using a money transfer provider, as they offer the fastest and cheapest way to send money abroad - even if they are rarely ever ‘free’.

Can I send money for free with an app?

Apps like Cash App and Zelle allow free domestic money transfers between users, a handy alternative to domestic bank transfers which can be expensive in the US. However, Zelle does not allow international payments, and Cash App is only available in the US and the UK - but does allow you to send money for free between users in both countries.

PayPal does offer free domestic transfers too, but you’ll need to pay a fee to withdraw the money from your PayPal balance into your bank account. PayPal charges high fees to make an international money transfer, with a standard rate of 5% of the total transfer amount.

What providers offer fee-free international money transfers?

While you will unlikely be able to make a completely ‘free’ international money transfer, many providers offer fee-free transfers that mean you won’t need to pay an upfront cost:

Send money abroad for free with these providers

RankingProviderOfferGet Started
🥇WorldRemit3 free money transfersVisit WorldRemit
🥈Xe£25 gift card when referring a friendVisit Xe
🥉WiseAverage mark-up is 0 – 0.5%Visit Wise
#4InstaremAverage mark-up is 0 – 0.5%Visit Instarem
#5CurrencyFairFirst 10 transfers freeVisit CurrencyFair

How much does it cost to send money abroad?

The cost of sending money abroad can be broken down into the following components:

  • Currency conversion: Banks and other service providers may apply a profit margin to the true market value when exchanging funds from one currency to another

  • Transfer fees: Many providers charge a fee for their transfer services, with additional costs for faster delivery, processing credit card payments etc.

  • Handling fees: Intermediary or receiving banks often charge fees for their involvement in the transfer process, each time the money goes through an intermediary bank account

  • Corporate services: Business clients may require further assistance in the form of forward contracts or bulk payments; these tend to come at an additional cost

Other ways to send money for free

While standard money transfers are rarely free, you might find that some providers have incentives or offers that you could take advantage of:

Some providers offer introductory offers such as free money transfers for new customers who sign up for the service. Introductory incentive aside, it is important to bear in mind that the cost of your money transfer is a one-off deal, and future costs will differ after the initial offer has been redeemed. However, if the price is right, it is worth claiming a freebie for a one-off money transfer service.

Promo codes

One widely used marketing tactic are the employment of promotional discount codes. In conjunction with money transfer companies who do not mark up mid-market rates, promo codes often allow customers to send money overseas for free. Always do your research when looking for promo codes, however, because some of them are subject to terms and conditions and not all discounts will outweigh margin mark ups.

Refer-a-friend schemes

Referrals of this kind are easy to find and are a great fit for anyone transferring money back and forth. As with promo codes, these referral schemes are often attached to terms and conditions, but they can result in a substantial discounted rate which will benefit both the sender and recipient, depending on your remittance requirements.

"Free" doesn't necessarily mean "best":\nYou don't want to opt for a free service if it is likely to jeopardise the value of your international money transfer. Ensure you receive the best value for money, in both currencies.

Summary

While undeniably enticing, free international money transfers do not always provide customers with the most competitive foreign exchange rate. When used on an occasional, infrequent basis, a free money transfer can be a valuable means of cost-cutting when sending money from A to B. However, for repeat customers, we would recommend paying a small fee to guarantee the security of your remittance and secure a more favourable exchange rate.

Finding a provider that offers free international money transfers is an appealing prospect for customers looking to avoid international bank charges when sending money abroad. Before you lock in an overseas remittance of any kind, we encourage our readers to consider all their options and follow the advice presented in this guide. There are plenty of cheap money transfer options out there, depending on your highest priorities, and our comparison tool can help you make a well-informed choice.

FAQs

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Article Factchecked by Elliot Laybourne on 20th July 2022.\nElliott is a former investment banker with a 20 year career in the city of London.\n \nDuring this time he held senior roles at ABN Amro, Societe Generale, Marex Financial and Natixis bank, specialising in commodity derivatives and options market-making. \n\nDuring this time, Elliott’s client list included Goldman Sachs, JP Morgan, Credit Suisse, Schroders Asset Management, and the Pennsylvania State Public School Employees Retirement System, amongst others. \n

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Contributors

Mehdi Punjwani
Mehdi is an accomplished writer and editor, specializing in personal finance with over five years of experience. His expertise is reflected in his work for prominent brands such as MoneySuperMarket, Equifax, and The AA. Additionally, Mehdi contributes as an author at USA Today, further showcasing his proficiency in the field.