Cheapest Way to Send Money

If you’ve ever transferred money internationally before, you’ll know the frustration at having to navigate expensive fees and unfair exchange rates just to send your own money to someone else – this can be apparent even when looking for the cheapest way to send money through a mobile app or PayPal account.

In this guide, we’ll cover your cheapest options when sending money abroad, different ways to send money and why comparing providers should be the first thing on your to-do list, and our top recommendations for the cheapest international money transfer from particular countries.

What is the cheapest way to send money internationally?

The cheapest way to send money internationally is almost always going to be using a money transfer provider who specialises specifically in helping users send their money abroad in other currencies. Using a specialist money transfer provider is beneficial as it allows you to transfer funds within hours, as opposed to potential 2-3 business days.

Out of money transfer services, however, there’s no single best or cheapest way to send money internationally and that’s because the cost of your transfer will depend on a number of mitigating factors. This includes the amount you are sending abroad, where you are sending it to, your payment method, and more. This is why if you want to transfer money abroad is absolutely essential to find the right and the cheapest money transfer service for your needs – and it’s why we created our comparison tool to provide a transparent, in-depth look into all the money transfer providers available to you, the costs associated with each one and how each fee varies by provider or country.

Send a cheap money transfer abroad in 3 easy steps

• Compare: there is no single cheapest provider out there. The cost will depend on the amount you’re sending, the location and the payment method. Once you found the cheapest money transfer provider for you needs, sign up and deposit your funds.
• Deposit: the bank transfer will almost always be the cheapest way to fund your money transfer account.
• Send: hit send, and you money will reach the destination in a matter of minutes.

Other ways to send money include:

• Banks / Debit Cards (potentially direct into a checking account)
• International money orders (for example, through Western Union)

These alternatives can also be convenient ways to send money abroad – but as a rule, money transfer services do tend to be the most cost-effective option.

What costs are there to consider when making international transfers?

There are a few major costs to watch out for when making an international transfer which, depending on the provider you use, can keep fees to a minimum or leave you unfairly out of pocket. These include:

Exchange rate

Sites such as Google and Reuters display exchange rates known as mid-market rates to give you an indication of what the current conversion rates between currencies are. These tend to change on a daily basis, so it’s worth bearing that in mind if you are looking ahead of time. For any given currency pair, the mid-market rate is the midpoint between the buy and sell rates on the global foreign exchange markets. Money transfer companies tend to add a margin onto the mid-market rate in order to make money, and so the size of this margin between providers determines the competitiveness of the exchange rates they offer.

Why are money transfer providers the cheapest way to send money abroad?

Low overheads

Most money transfer services operate digitally, meaning they have lower overheads than your traditional brick-and-mortar banks. This means they can afford to charge lower fees for international money transfers.

Peer-to-peer (P2P) transfer services

The majority of online transfer providers have P2P money pools in the countries in which they operate, which means costs and transfer fees can be reduced significantly.

P2P services essentially enable peer-to-peer selling and buying of different currencies – instead of transferring your money across borders into a new currency, the fund are instead ‘swapped’ with money other people are sending in the opposite direction. If you are sending smaller sums of money, this form of transfer is an extremely inexpensive way of sending money abroad and one of the key reasons money transfer services can be so much cheaper than banks.

Specialist providers

Money transfer providers focus specifically on how they can send their users money abroad faster, cheaper, and more reliably than any other service (and there are a lot of services to choose from these days…).

That specialism means money transfer providers can have lower costs than banks, who don’t specialise in international transfers. Plus, the competition between providers only helps to drive costs lower. 

What specific transfer requirements could affect the cost of my transfer?

Transfer fees and times differ depending on attributes such as the amount involved, payment method, payout option, transfer time and destination. These differences often give rise to specific transfer requirements and things to watch out for. Here’s a quick list of things you’ll need to be aware of:

Transfer limits

Banks usually have transfer limits on the amount you can send per day or per transfer. The limits may be different when sending via phone, online, through an app or in-branch. Transfers involving amounts such as $10,000 and above are generally classified as large transfers. Where the limits are set per transfer, you may have to make several transfers to equal the total amount you want to send. Some banks allow you to send much larger transfers when you visit their branches.

Identity verification

All transfer providers require that you verify your identity, and failure to do so when sending larger transfers may cause the transaction to be flagged, resulting in much longer delays than you may have first counted on. Depending on the provider, identity verification can take up to 2 days, and during the verification process, the provider will want to check for proof of identity and proof of address. You may also need to supply details for the recipient, so be sure you have these to hand too.

Guaranteed rate

A guaranteed rate is an exchange rate that has been guaranteed by a provider to stay the same for a set amount of time (for example, 24 hours) To be sure on the amount your recipient will get, you need to work with guaranteed exchange rates to ensure that the money you are transferring isn’t affected by changes in international currency markets that may happen while it is being processed. Providers like TransferWise allow you to lock in rates for up to 48 hours to protect against this eventuality.

Top 7 Cheapest ways to send money internationally

What are the cheapest ways to send money abroad in my country?

The cheapest way to send money abroad differs in cost depending on the country you are sending to. If you are making a transfer to a country where online money transfers are common, you may end up paying lower fees. On the other hand, the countries where transfers are less frequent do tend to attract higher transfer fees.

Unless you are making a transfer in an emergency situation, to find the cheapest international money transfer, it’s always good to plan in advance and put in some work comparing different providers. Remember, the fastest way to transfer money overseas will often not be the cheapest. Just because a provider is the cheapest for one specific currency pair, does not mean this will be the case for all transfers. With proper research and cross-comparisons, you are likely to find some money transfer providers cheaper on some routes compared to others.

To get a feel of how cheap or expensive it is to send money to different countries, below is a brief look at the United States, the United Kingdom, and Australia.

The United States

Assume you are sending money from HSBC UK to JPMorgan Chase Bank in the US. You will pay a £4 fee if you transfer online and £9 if you transfer at the branch or via phone. When the funds get to Chase Bank in the United States, your recipient will be charged a further $15 to receive the transfer. In addition, HSBC charges an exchange rate margin of 6.1%. When combined, these costs added up can be for an expensive transfer – which is often the case if you choose to use the convenience of bank transfers instead of the cheap money transfer provider.

Australia

If we look at the options for transferring money to Australia from the US or the UK, banks work out as quite an expensive option. For instance, if you make a transfer from Barclays UK to Australia through telephone banking or at a branch, you’ll pay £25. If the transfer goes into a Westpac bank account, you’ll be charged another A$12 to receive the payment. Depending on the arrangements, other overseas bank fees (such as sending money to a foreign bank account) may be deducted as well.

Barclays UK charges an exchange rate margin of 2.75% – 3.9% depending on the size of the transfer, and other banks similarly charge high rates which push the cost of the transfers even higher above these initial fees. This should prompt you to look for cheaper alternatives to send your transfer, and there are lots of options in online money transfer providers with companies such as Orbit Remit, TransferWise, InstaReM, Ria, and WorldRemit frequently used to process transfers from various countries to Australia.

So online providers work out cheaper in this case also, but as you can see, the online money transfer providers have different fee schedules. For you to find the cheapest way to send money to Australia, you need to do a comparison based on the amount you want to send, your payment method, and the country of origin – and our comparison tool can help you accomplish this in seconds.

The United Kingdom

As always, you can use a bank to make your transfers to the United Kingdom. However, it will again become clear that this may be costlier than other options available.

For example, if you are sending $1000 from the United States to the UK through an international wire transfer, using Citibank as the sending bank and NatWest as the receiving bank. Citibank will charge you $35 for the outbound international wire transfer. On receiving the transfer, NatWest will charge your recipient an additional £7.50. Added on top of this is Citibank’s exchange rate margin – about 2.9% on top of the mid-market rate.

From these examples, you can see that the price varies from country to country, and will be the case for other countries, no matter if you’re looking for the cheapest way to send money to Canada or for the cheapest way to send money to Kenya.

How can I minimize the costs of transfers?

There are some actions you can take to minimize the costs of money transfer. These include:

• Considering a longer transfer time, as this will often mean lower fees than a same-day or quick money transfer service
  
• Taking your time to find an advantageous exchange rate and the best provider for you
  
• Do your research about money providers – our comparison covers security, reliability, transfer times, and countries covered beyond simply price

How to find the cheapest money transfer services…

When looking for the cheapest way to send money internationally, you can save yourself a lot of money in fees and exchange rate margins by using an online money transfer service rather than a bank – but you have to consider each provider separately to get the best and the cheapest rate. Based on your transfer route, you’ll have several cheapest money transfer providers to choose from each having a different fee schedule and exchange rates.

Using our comparison tool will help you find the provider that guarantees you the lowest combination of fees and exchange rate margins to make sure you don’t get overcharged when sending your money abroad.

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