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Different types 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
Exchange rates
Don’t be seduced by banks who promise 'zero-fees' or 'free transfers'
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 which will ultimately result 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 and OFX, who both offer competitive exchange rates and transparent fee structures. Find out more about our top 10 money transfer companies.
Why 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 are able to guarantee the most competitive rates, easy to use platforms and instant delivery.
The influx of money transfer specialists around the world have formed in response to the cross-border nature of modern finances. Funds are sent and received between different countries everyday and money transfer companies make it their business to serve the various needs of global users. This means offering is more streamlined and as a result potentially cheaper, whether you are transferring money with a credit card, bank account or pre-payment platform.
Top four benefits of using a money transfer provider
Better exchange rates
Lower fees
Specialist services
Daily transfer limits
Bottom line
Your bank will always try to entice you by promoting their international money transfer services, but we encourage our users to fully explore their options, outside of traditional banking. More often than not, exploring beyond your usual banking remit will pay off and can result in big savings. Check out our reviews of the biggest international money transfer companies in the industry and find out how you can avoid excessive fees.
