How to Transfer Money as an Expat

April 13, 2015

in currency, expat finance, money transfer

Over $582 trillion was sent as remittance by expats in 2014, according to The World Bank. That’s a staggering number indeed, and one of the main reasons the Foreign Exchange Market is currently the world’s largest market.

Why does this matter to me?

If you’re an expat, by definition, you will be sending money internationally. Here are some potential situations:

  • If you’re a working expat, it is possible you’ll transfer any income you can spare back to your family.
  • If you’re retired, it is probable you’ll transfer your pension from your home country to your current location.
  • If you relocated for any purpose whatsoever, you might need some funds from your savings at home delivered to you.

Sending money home, or transferring funds from home, entails more than simply an electronic wire transfer. There’s also currency exchange involved. Though this aspect may seem seamless to many expats, in reality, it’s not.

Aforementioned figures make it crystal clear that there is a lot of money involved in international money transfers and, where there’s money, there are potential fees and problems.

Different currency

Challenges with transferring money

As an expat sending money abroad, you might encounter a few challenges when trying to transfer money into and out of the country:

  • Poor exchange rates: When you see official currency rates like the ones provided by Reuters, these exchange rates refer to the interbank rates. These are the rates used when banks trade currencies. When you use the bank, they propose a different “buy” and “sell” rate for each currency, which includes a hefty commission. It is not rare to see banks offering certain currencies with as much as 5% spread (the difference between the interbank rate and the rate provided to customers).
  • Fees: Banks charge a flat fee that amounts to about $25 in the United States for each transfer being made. If you are sending money regularly, you are looking at spending hundreds of dollars on this fee alone.
  • No dedicated assistance from a dealer assigned to help you or take you through the process.
  • No access to hedging tools which can enable you to limit your exposure to foreign currency fluctuations.

How to avoid the extra fees

When you transfer money, here are the benefits you should be getting:

  • A low spread of 1% and lower is achievable
  • Smaller or no fees
  • A dedicated currency dealer who will also help you plan out the currency purchase strategy and optimize it
  • Hedging tools: Simply put, there are types of contracts which allow you to buy foreign currency at a fixed price for a period of one or even two years. That means the volatility of the currency rates will not affect you. You will know exactly how much money you will be paying, and how much money in foreign currency you will get in exchange, ahead of each transaction.

moneytransfer

Which companies offer all of the above?

MoneyTransferComparison rates only three companies with a 5-star rating. Out of them, two are recommended for expats:

  1. World First Foreign Exchange is one of the companies. The third largest currency firm in the UK, it also operates from various locations in Asia, Australia, Canada and the US. That means you can send money from these locations globally. World First Foreign Exchange supports over 100 currencies, charges no fees at all for international transfers and has the cheapest rates. Also included and relevant for expats to know is that there are:

  • Regular payments: You can transfer a certain amount each month on specific dates
  • Dedicated assistance: One familiar face will help you with all inquiries and help you optimize your currency trading strategies
  • A no-fees policy
  • Great exchange rates

  1. TTT MoneyCorp is the second company among the top-rated. It operates from Europe, the UK and the US. Founded in 1962, it’s one of the oldest currency firms in existence. Here the global reach is a tad more limited as developing countries are not supported, but you can easily send money to all the major countries. The company charges a flat fee rate of $5 per transfer, which is very negligible compared to the fees taken by banks and other firms. Also included and relevant for expats to know is there are:

  • Regular payments: You can transfer a certain amount each month on specific dates
  • Dedicated assistance: One familiar face will help you with all inquiries and help you optimize your currency trading strategies
  • Low spreads of usually 1% or less, about a quarter of what banks typically charge

Different currency bills

Last Takes

If you are an expat, sending remittance home, consider using foreign exchange firms. Find credible currency transfer firms available in your area, or use our recommendations above and sign up.

Signing up doesn’t cost you anything. After you are done, you can request a free quote on a transfer you need to make. Sign up to a few platforms in parallel, and request their quotes. See for yourself which ones offer you the best rates, best services and easiest platform to access.

This post is sponsored

Photos courtesy of wikipedia creative commons, Tom Purves and epSos .de

4 Comments - Add Yours!

  1. Afrika

    $582 Trillion!! Crazy number! I was an expat in UK and I used to transfer money to my family in Cyprus. But It was really difficult and expensive. Sending money abroad its much cheaper and faster nowadays.

    Reply
  2. Chris

    Great article! But the market was $582 billion, not trillion.
    WorldFirst and Moneycorp are featured on comparison services and their rates are good. They also have good customer support.
    I would recommend to compare on envoidargent.fr or moneytis.com before sending money abroad.

    Reply

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