HOW TO GET THE BEST EXCHANGE RATES ON MONEY TRANSFERS

March 10th, 2010 by admin

People all over the world can now contact one another in seconds and conduct business deals from opposite ends of the globe without thinking twice – not for nothing are we sometimes described as living in a global village.  But what about those times when we have tried to send money to another country?  Many people would agree that their first money transfer was not as straightforward as they had previously thought.The majority of people assume that their regular bank can organise a foreign money transfer – and indeed, they would be right.  But rather than making this a simple, low cost operation, many high street banks will offer poor exchange rates and might even take a portion of the transfer amount for themselves by way of a commission fee or other charge. 

 

So what is the best way to move money abroad, and how do you get the best exchange rates?  There are various ways of transferring money aside from via the regular bank.  You can use an international transfer agent such as Western Union – these operate a branch service and can send money to pretty much anywhere in the world quickly.  The recipient must then visit a branch in their locality to pick up the money – this is usually possible with 1 to 3 days.  Western Union has over 350,000 branches in 200 countries, but if you want to send over £2,000 you need to bring two forms of ID with you.  You can also visit a Post Office® branch to make an international money transfer, but the exchange rates there are generally not the best on the market.  There are now numerous online services which can transfer money abroad at a much lower cost than the high street version.  Thanks to low overheads, they rarely charge commission and the exchange rates are highly competitive.  Generally, the service they offer is the quickest method to transfer money around the world.

 

In order to use the correct one, a person needs to consider a variety of factors:  one, they need to figure out how much they want to send.  Next, they will need to find out what the situation is in the location of the recipient – can they access the internet?  Do they have a bank account? 

If the amount you need to send is below £5,000 then you could consider a service like Moneybookers – they charge a flat fee of 1 per cent per transfer, to a maximum of €0.50.  However, they also charge you for withdrawing the money.  Alternatively, you could consider the well-known Paypal system which requires that both the sender and the recipient have an online PayPal account.  You can send money free with PayPal to 16 currencies – there are fees, but it depends on the currency you are transferring to.  The exchange rates offered by both PayPal and Moneybookers are generally competitive, so are worth monitoring. 

 

For transfers of around £5,000 and above, an online foreign exchange broker can offer by far the best exchange rates and the cheapest all round service.  With a simple online account (which is set up quickly and securely), you can send money to accounts all over the world, typically up to 47 currencies are serviced.  As highly qualified brokers, these companies generally offer both corporate and private client accounts.  Commission is not charged and there are no additional fees (unless the transfer amount is lower than around £5,000 – sometimes this benchmark is even lower).  For transfers of less than that amount, generally around £10 is charged per transfer.  The exchange rate is quoted live and is very close to the interbank exchange rate – the wholesale rate which banks use to trade currencies between each other.

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