Transferring Large Amounts of Money Abroad

In this guide, I'll explain how you can achieve all these things, leaving you more time and energy to focus on what matters.

Before we get started, let me just cover a few reasons for large transfers that might match up with your needs:

• Buying or selling real estate overseas

• Expats, emigration and moving abroad

• Retiring abroad & pensions

• Studying overseas

• Foreign investments

• Global business

• Luxury goods

These are just some of the use cases that I can give you great recommendations for below.

But in truth, if you're looking to transfer significant amounts for any reason, the companies I review below will have you covered.

My number one tip: use a broker, not a bank

For a big, important international payment, it's easy to think banks are the way forward...

Yes, they're trustworthy (to an extent), and you'll already have a bank account in place.

But when it comes to international transfers, that's where the benefits end.

Banks are notoriously poor when it comes to exchange rates.

They may offer low fees, but fees aren't that impactful when you're sending tens or hundreds of thousands of your hard-earned currency.

It's not unheard of for a bank to mark up their exchange rates by 5%. You can do the math for your specific transfer, but that works out to be very expensive.

Top FX Brokers I Recommend

Currency brokers, on the other hand, will give you a rate much closer to the mid-market (aka the 'real' exchange rate).

Not only that, but you can enjoy extra benefits:

• Personal account manager - chat on the phone or send emails to your assigned account manager for personalised support

• FX expertise - your dedicated account manager has made hundreds of currency transfers for all manner of purposes. They can guide you on the what, how and when of your transfer. This expertise is invaluable, and you won't get it from your bank

• Advanced features - lock in future rates up to two years in advance, consider currency hedging and risk management strategies, and set stop losses. Your account manager will help you achieve your goals, backed by powerful tools

• 24/7 transfers - mobile and web platforms let you execute transfers around the clock

Best providers for transferring large amounts abroad

*It depends on the currency and the region

What to consider when sending large amounts of money

When finding the best service for you, there are a number of things that you will want to take into consideration. These include:

Transfer fees

Traditional banks are known for having more expensive transfer fees than money service providers, but that’s not to say you won’t get caught out with hefty transfer fees if you don’t do your research. Some brokers will add a fixed fee for large transfers, whereas some will charge a percentage-based fee.

What’s most important is that you have a clear understanding of what fees you will be charged and any additional fees that your recipient’s bank could charge them.

Exchange rate markups

Often referred to as the hidden fee, exchange rate markups are the margin added onto the mid-market exchange rate by banks and transfer providers. Again, banks tend to be known for adding a higher markup than specialist providers, but it’s still important you know roughly how much you are being charged on the exchange rate.

Additional fees

Additional fees cover things such as credit card charges, processing fees, and any fees that the receiving bank may charge for a transfer. If you need your recipient to receive a set amount, it’s important to take these fees into account in case more is deducted from your transfer sum.

Payment method and delivery method

The majority of large sum transfers will need to be done directly from bank account to bank account, although this doesn’t mean you’re limited to making the transfer with your bank.

Transfer time

If you are making a payment for a certain deadline, you will want to check that your transfer provider can process your transfer within that time frame.

Large sums can sometimes take longer to process because additional verification checks are required to verify you are authorised to be sending that amount of money, so take this into account when looking to send a large sum abroad.

Security

Importantly, you’ll want to consider the security measures your chosen method of transfer has in place. Not only do you want to ensure your money is delivered securely to your recipient, but you also want to make sure that should you encounter any problems, you are using a reliable service that can help you. One thing to look out for is how the provider you are using is regulated. In the UK, providers should be regulated by the financial conduct authority (FCA), which oversees financial institutions.

Ultimately, the best way for you to transfer a large amount of money abroad really depends on the circumstances of your transfer. Variables that can affect this include:

• Where you are located

• Where you are sending the money to and the currencies you need to convert between

• The sum you are sending (and the fee structure each provider charges)

• Whether an urgent transfer vs the cheapest cost is your top priority

Our innovative comparison engine takes all of these factors into account to help you find the best transfer provider for your individual transfer needs, helping you find the perfect provider for securely transferring a large amount of money internationally.

How to transfer large sums of money internationally

To transfer a large sum of money internationally, you’ll need to find a currency broker or bank that can handle this request for you. Your two main options are:

• Using a high street bank which can facilitate large transfers between two bank accounts.

• Using a specialist money transfer service that allows large transfers

You should note that not all money transfer providers will be able to accommodate large transfers, as many have a maximum sending limit. Finding a currency broker that can accommodate your needs is therefore essential to help you get your money abroad efficiently and without delays.

How much money can you send abroad?

Theoretically, you can wire any amount abroad with no limits, provided you have the funds in your bank account. That being said, your bank or transfer provider may have their own maximum send limitations. These limits usually prohibit you from sending more than a certain amount (which will differ depending on your bank) in a set time.

Again, the best way to overcome this is to make sure you are using a broker that specialises in transfers for large sums so you’re unlikely to run into this obstacle.

What do I need to send a large sum of money abroad?

Sending a large amount of money internationally usually requires more documentation than a regular transfer because of the additional security checks needed to keep your money and your account safe. Documents you should have handy in case you need them include:

• A valid form of ID, such as a passport or driving license

• Proof of where the money came from - this might include a bank statement, payslip, investment certificate etc. Check with your broker what you’ll need as it may depend on where the money comes from (e.g. selling a property, salary, investments etc)

• Source of income - you may need to provide payslips or bank statements to verify your income for large transfers

• Your recipient may also need a form of ID to receive the funds

The Common Reasons for Sending Large Amounts Abroad

The world has become a global village and it is not uncommon for people on one end of the world to transfer large sums of money to other people or businesses in different countries. Whatever the currencies and amounts involved, every transfer has a purpose which may have an effect on the best service to use. Some of the most common reasons for large money transfers are:

Sending Large Amounts Abroad - Analysis

Sending money across borders to buy a property or settle an international business transaction can be expensive for a variety of reasons. Factors such as your transfer destination, the money transfer service provider you choose, the currency pairs involved and the transfer payment method you use, determine the affordability of a transfer.

To illustrate this, below is a look at how these and other factors play out when transferring £10,000 to the US through some of the biggest financial institutions: HSBC, Lloyds Bank, Barclays UK and NatWest.

HSBC

With HSBC the main component that you need to carefully consider is the exchange rates. HSBC updates its exchange rates frequently in a bid to reflect the global currency market movement – but, since rates vary and at times you have to call the international transfer desk to negotiate a good rate, the best approach is to look at the exchange rate margin.

At the time of creating this article HSBC charges a 3.52% exchange rate margin. This means that a £10,000 transfer to the US will cost you £352 above the mid-market rate. The receiving bank in the US will also charge your recipient a receiving fee. Assume the receiving bank is Wells Fargo, the recipient will be charged $16 to collect the funds.

When all these charges are added up, and expressed as a percentage of your transfer, you’ll be losing nearly 4% of your £10,000 in the transfer process. The exchange rate margin is always the hidden cost in money transfers, and the most important one to look out for with large amounts.

Lloyds Bank

If you are sending money online through Lloyds bank, you have a limit of up to £100,000 per day. An international transfer to the United States will take anywhere between 2 and 3 working days to be delivered.

Save for Euro transfers which are free, sending money to countries that use different currencies like the United States will cost you £9.50 per transfer.

Again, the difference comes when you bring in the exchange rate margin. A transfer of £10,000 attracts a margin of about 3.47% between the rate given and the mid-market rate. For £10,000, this will translate to £347. If you are sending to a Capital One account, the recipient will be charged a further $15.

Looking at the full cost of the transfer, you’ll again be losing in the region of 4% of your £10,000 using Lloyds for your transfer.

Barclays UK

Barclays UK has 3 charging options which are:

· OUR - Here the sender pays all the charges related to the transfer

· SHA- the sender pays only their share of the transfer charges with the rest borne by the beneficiary

· BEN -The beneficiary pays all the transfer charges.

Barclays UK charges an exchange rate margin of 2.75%. Therefore, a transfer of £10,000 will see you pay a margin of £275 above the mid-market rate. Compared to HSBC and Lloyds Bank, this margin is one of the lowest you’ll find with the big banks, although it’ll still eat up a chunk of your transfer.

If you factor in the $15 or $16 international wire transfer receiving fee, the total transfer cost still is more in the region of 3 – 4%.However, Barclays UK doesn’t explicitly lay out how much is charged in fees by any correspondent and intermediary banks – so there may be a small hidden cost or two lying around.

If you want to know more about international bank transfers, check out our guide on transferring money internationally between banks.

NatWest

International money transfers to the United States through NatWest cost £23.50 per transfer. You can opt for either a standard transfer or urgent transfer. Standard transfers take anywhere between 2-4 working days to be delivered while urgent transfers take 1-2 working days at a cost of £30 per transfer. The maximum amount you can send per day is £10,000.

But be wary of the rates: transfers of £10,000 and above to USD attract exchange rate margins of about 2.32% on top of the mid-market rate. This adds up to about £232 less per transfer. Intermediary fees and transfer recipient fees can weigh heavily on the transfer cost bringing it close to 3% of the amount transferred.

Using a money transfer provider - XE

As you can see, transferring a large amount of money abroad using a bank can be a costly process. Luckily there are a variety of online platforms that offer you an alternative, and can often save you a lot in terms of fees.

Let’s take international money transfer provider XE Money Transfer as an example. When you make the same transfer we have been examining above (£10,000 to the United States) using Xe Money Transfer, you will pay zero fees with only a margin of about 0.9% on top of the mid-market rate. This means that the cost of your £10,000 transfer will only be £90, when it could be nearer £400 with some of the big banks.

One potential hidden charge with Xe Money Transfer is that third-party banks may occasionally charge you for the money to end up in your recipient’s bank account. However, these fees are unlikely to be much, if anything at all, and the most important factor with using a platform like Xe Money Transfer is the large saving you get on the conversion rate against the big banks.

Analysis Roundup

Like with any decision involving spending or sending money, when choosing a method to send large amounts of money overseas, it is always a good idea to compare your options. From the breakdown of all the relevant fees and charges we’ve given above, it’s clear that it’s most often financially sensible to choose an online provider such as Xe Money Transfer over some of the bigger names in international banking.

This can come across as a bit of a surprise, as high street banks are the form of financial service most often used by regular consumers, and therefore often the most trusted. However, as you can see from our analysis, the big banks know that many people will see them as the default option, and know that this means they can charge higher fees and margins above the mid-market exchange rate which can see you spending up to £400 overall on a transfer of £10,000.

On the contrary, most online money transfer providers know that in order to attract business, they have to provide attractive rates to their users. Not only can the fees and charges add up to less than a quarter of what some banks may charge, companies like Xe Money Transfer Money Transfer have dedicated currency specialists that have mastered trends between currency pairs to help you process your transfer at the best rates possible.

There are many reasons why people might want to transfer a large amount of money abroad, but the common theme across all of them is a desire to ensure as much money as possible reaches the person on the other end of the transfer.

Doing a comparison across all transfer service providers is always the best way to go about finding the cheapest rate for international transfer, and in most cases you will find that the most financially sensible option will be a specialist money transfer service rather than a large bank.

Disclaimer:

We have an active affiliate relationship with Xe Money Transfer, and receive compensation when a user signs up for their services. This comparison & analysis has been made independently and the affiliate relationship with Xe Money Transfer has not influenced the rankings of the services.

Exchange rates and fees were collected by the MoneyTransfers.com team between 28/02/20 - 03.03.2020.

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