In 2017, the United States received $6,621 million in remittances. The top five countries from where US nationals send money home are Mexico, Canada, United Kingdom, Puerto Rico, and Germany. In the 2017 financial year, US immigrants domiciled in Mexico sent $1.774 billion of remittances to their loved ones back home.
The U.S. Department of State’s Bureau of Consular Affairs (CA) estimated in 2016 that over 9 million Americans live abraod. Most of the US emigrants are skilled workers in emerging economies, naturalised US citizens returning to their home countries, and missionary workers.
If you are an overseas American and want to send money home, you need to be clear on the procedures and requirements. Some of them include various ways to send money to the United States, the information to provide when sending and receiving, the advantages of online money transfer services, and specific things to consider when sending. This guide will delve into those areas and more.
Sending money to USA is simple and easy. Follow these steps to get started.
There are multiple ways to easily send and receive money in the USA but these will largely depend on the provider you decide to use. Below you will find everything you need to know about sending and receiving money.
With a nominal GDP of $19.39 trillion (2017 est), the U.S. has retained top position as the world’s largest and most developed economy since 1871. It has a well developed financial system comprising financial intermediaries and financial middlemen.
There are several options when sending money to your family, relatives, and friends in the U.S. You can opt for international wire transfers, online money transfer services, international checks or even money orders.
The U.S. banking system is the most extensive in the world. The number of FDIC-insured commercial banks in the country in 2017 was 4,909. Also, being the most banked society in the world, your loved ones can access money sent to them conveniently.
Most banks in the U.S. readily accept both international wire transfers denominated in the dollar and those denominated in foreign currency. That said, some banks may require different receiving information based on the originating currency.
Bank wire transfer charges largely depend on the location of the sending bank. International wire transfers typically take three to five days to complete a transaction. If your loved ones in the U.S. haven’t received any money after a week, contact the sending bank. As for the transaction charges, expect to pay anything between $30 and $50 per transaction.
The increase in technology, mainly driven by the need for innovative, faster, and inexpensive ways to send money has seen online money transfers dominating the remittances space. Majority of the money transfer companies have their headquarters in the U.S. and trial their products there.
Even for companies like WorldRemit and TransferWise that are elsewhere, their presence is all over the United States. The only limitation is the country you are in and the options available there.
Majority of online money transfer services only need you to sign up for an account and top it up using a debit or credit cards, bank transfer, or in-person cash deposit at a store.
Most of the providers allow you to send from their websites, through downloadable mobile apps, or from physical stores. Western Union allows you to start the process online and complete it at a store convenient to you. MoneyGram has a SendBot you can use to send money on the Facebook messenger app.
Using online money transfer services, you can send to the U.S. through any of the following options.
The United States Postal Service accepts money orders from 27 countries. Many of those countries are in South and North America except for Japan. Money orders are still a secure, reliable, and convenient way of sending money.
Most banks in the U.S. accept international checks. That said, payment gets delayed until the bank presents the check to the foreign bank. Apart from the fees charged, this method of sending money may be subject to limits.
When sending money to the United States, the provider you choose will largely determine the information to provide. Though circumstances may change especially, with many providers implementing the Know Your Customer (KYC) policies, you’ll still need the following information to send money to the U.S.
Some banks in the U.S. may require specific information and declaration of the funds transferred. Ensure you find out from the recipient in advance to avoid giving incorrect information.
The United States economy and financial system have expanded possibilities for lots of Americans to transact and do business. The expanded options include the different ways people can receive money from overseas. However, all this depends on the provider chosen and the amount of money transferred.
Whether you are on the East Coast or the West Coast, there are two main ways you can receive money sent to you via money transfers.
Through the bank – You can choose to have the money transferred directly to your bank account. This gives you the safety and liberty to start transacting right away. Also, you can receive large amounts conveniently.
Cash pick up from agent locations – Online money transfers have such established networks in the United States that you can’t miss an agent location near you. That said, Western Union, Xoom, WorldRemit and others have limits on how much you can receive through this method.
Most providers will notify the recipient that their money is on the way. When the money gets to the recipient, they’ll be required to provide some information for verification purposes. Without this information, the providers may decline to complete the transaction.
The recipient may also be required to identify the sender and the amount to be received. All these checks are necessary especially, in the United States as part of due diligence.
Living in the United States is relatively pricey. Cities such as New York City, Los Angeles, San Francisco, and Boston can cost as much as $1,200 per person per month rent not included. In New York City, the average rental for a one-bedroom flat in the city centre is about $3,000. A decent meal for two in a mid-range restaurant can cost upwards of $75.
Americans in the diaspora, therefore, feel the pressure of some of these expenses and regularly send money home. The following are some of the common reasons for remittances to the United States.
Despite that Americans do not live in setups like in other continents with extended family living and a sizeable number of dependents, they still have families to support at home. Utilities and food expenses can be quite overwhelming if the recipient doesn’t have gainful employment.
Mortgage debt on family residences in the U.S. amounts to about $10 trillion. With a lot of mortgage products available, most first-time homeowners opt for homeownership loans. As families move abroad, some put up their houses for sale, others rent them out and continue to pay the mortgage.
The United States financial market is one of the most complex yet lucrative. From bonds to derivatives to equity and anything in between, Americans in the diaspora have a lot of options back home. The markets are bullish and attractive to overseas Americas looking to build wealth at home.
National Center for Charitable Statistics (NCCS) found that there are 1.5 million charitable organisations in the US. Each of these organisations supports one cause or the other within and outside the United States. Out of concern and human good, Americans send money home to support such noble causes.
The use of the money as specified by those sending may not necessarily be the actual use by the households. Beneficiaries may alter the usage of funds to suit their immediate and most pressing needs.
Looking at the options available including international wire transfers, money orders and international checks, online money transfer services stick out as the favourite. The technologies they use, the convenience they offer, and the transfer speed, are more than a bargain for the fees they charge. Here are the reasons Americans in the diaspora find online money transfers attractive.
Sending money to the United States is relatively simple. However, there are a few considerations you need to make when sending money home. The investment climate, exchange rate risks, and the regulatory environment.
Whatever the case, sending money to the United States is a simple process with online money transfers. There are lots of options available such as bank transfers and cash pickups. For a smooth sending exercise, ensure you have all the information required, know the different ways of sending money and considered the different aspects in the U.S. economy that could impact your transfers.
Sending money anywhere else in the world is as easy as sending money to the USA. If you’re looking to send money to another country, here is the list of the most popular destinations.
Jonathan is the founder and editor of MoneyTransfers.com. Jonathan is highly experienced in the currency transfer market, having previously worked in the FX trading industry, alongside being an avid traveller. Using his knowledge he identified a need for transparency and further education to help people save money on their money transfers, leading to the creation of MoneyTransfers.com