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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.

Updated: 27/07/2022
Read time: 4 minutes
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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 transfer under £25,000

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 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 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 4 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.

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Article Factchecked by Elliot Laybourne on 20th July 2022

Elliott is a former investment banker with a 20 year career in the city of London.

During this time he held senior roles at ABN Amro, Societe Generale, Marex Financial and Natixis bank, specialising in commodity derivatives and options market-making.

During 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.

April Summers

April is a trained journalist and the Content Editor for MoneyTransfers.com. 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.

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