As an expat, sending money to your friends, family or to businesses back in your native country can be hard work. Whether you’re living in Spain, Dubai, the United Kingdom or Australia, banks and financial service providers cripple people who want to transfer money into other currencies and countries, and as such, sending £100 to a friend in Dubai might result in £80 in UAE Dirham after fees and exchange rates - especially if you don’t use a specialist money transfer provider.
Below, we’ve put together some of the best ways to send money abroad as an expat, and share with you our top tips on avoiding excessive fees, charges and inflated exchange rates.
Before we delve deeper into sending money abroad as an expat, it’s important that we outline two important terms. The first is Fees - a figure or percentage you’ll be charged when sending money overseas. It may be that you pay the fee as the sender, or that the recipient will pay a fee in order for their bank to accept your money and convert it into their local currency. It is important that you read all terms and conditions and understand fees before you send money, as some providers impose many small fees and charges which can quickly add up.
The second important term is Exchange rate. This is also known as the ‘hidden charge’, as firms that offer ‘commission-free’ money transfers may have appalling exchange rates, so you should ask for the bank or provider’s exchange rates to calculate the true cost of sending your money. Always get the final figure before you send money to ensure you’re not being ripped off.
If you’re from the United Kingdom or the United States, you can maintain a bank account in your native country provided that you can supply an address. That way, you’ll be able to keep money in your account, whether that be savings or an income, and transfer money to your friends and family without having to worry about fees or exchange rates. However, some banking institutions require their customers to be resident in their registered country, so ask before you emigrate.
Many people think that using a bank account is the safest and cheapest way to transfer money from one country to another, and although that isn’t always true, it’s still an option you should consider. HSBC, for example, offers a transfer service that is free for its Premier and Advance current account holders, and allows customers to transfer money to any other HSBC account around the world. With great exchange rates, this is one of the cheapest methods of transfer.
If you’re looking to send money to India, then opening a State Bank of India account in the UK will allow you to send money to any Indian bank account through its remittance service, whilst Danske Bank, which has branches in Finland, Denmark, Sweden, Norway, Estonia, Latvia, Lithuania, Ireland, Northern Ireland, Germany, Poland, Luxembourg, Russia, the United States and the United Kingdom, allows you to transfer money for free between any of its countries.
Of course, when choosing to transfer money using a bank, be sure to do your research and check that you’re getting the best exchange rates. Just because you’re not paying a fee, it does not mean that the bank won’t be making money from your transaction, so double check the cost.
If you want to send money abroad or even visit a new country and spend in a different currency, then a specialist credit card could be an option. Not only do credit cards offer good exchange rates, but they are usually free to withdraw money from, and in some countries offer financial protection against scams and online purchases. However, you should remember to always pay off your credit card using your bank account when you’re done to avoid paying hefty interest.
There are lots of online money transfer websites to consider if you’re looking to send money abroad as an expat. CurrencyFair is one of the most popular, allowing you to send money in 36 currencies, including US dollars, euros, Australian dollars and more. Their fees are relatively low at just 0.35% and an admin charge, and the exact costs will be shown before you transfer, which helps you to make the right decision and avoid being overcharged for your money transfer.
The best part is that the company is authorised by the Financial Conduct Authority (FCA), which means that any money you send will be protected. Money sent should arrive in your recipient's bank account in a day or two, and you can send up to £1 million in a single transaction. The site has an easy-to-use transfer calculator, which allows you to input your amount and see how much your recipient will receive in real time using their most up to date exchange rates.
Sending money to another country as an expat isn’t always easy, and the truth is that fees and exchange rates really depend on the country you live in, and the country you’re sending money to. It may be that you need to sign up for multiple services and use them at different times to get the best deals, or you may decide to bite the bullet and succumb to charges to save your time.
Whatever you decide to do, follow Money Saving Expat and check back soon for more great advice on everything from borrowing and investing to pensions, money transfers and local tax. We help you make sense of your money as an expat and allow you to live your best expat life.
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