Transferring Large Amounts of Money Around the World… How to Avoid Massive Hidden Fees

Currency Exchange

2018-12-21

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Time Doctor - Transferring Large Amounts of Money around the World

Summary:

There are ways to make moving large sums of money less of a hassle. If you wish to, you can use the cheapest options available, such as TransferWise. You can also check out the estimated hidden fees of major banks in the USUK and Canada.

 

Nowadays, sending money overseas is a common practice – people work with clients from across the world and money transfers have become a necessity. Using bank services is the first option that springs to mind when it comes to money transfers. Although all banks have their own policies for money transfers, one thing is always the same – charges that you have to pay for a wire transfer. In addition to that, banks may also charge you with hidden fees that occur in the form of unfavorable currency exchange rates.

It can get tricky but is there anything you can do about it? The following tips will teach you how to send money abroad and which aspects of the service to pay the most attention to.

International Monetary Transfer Hidden Fees

Unfavorable exchange rate is the major reason for differences between declared and real fees that you pay to a bank for sending money abroad. Every bank has its own exchange rate fee that applies when you transfer money from one currency to another. You have to pay attention to the bank’s exchange rates and their currency conversion fee.

Depending on the currency, banks can charge a very high hidden fee. Have a look at Table 1 to learn how much it would cost you to send 100,000 Australian dollars to the US if you use the services of a few Australian banks.

Table 1: Hidden currency conversion fees when transferring $100,000 from Australia to the US, or from the US to Australia (assuming that the Australian bank is doing the currency conversion)

  STATED FEES HIDDEN FEES (ESTIMATE)
ANZ $15 $4,400
NAB $15 $5,400
St. George $15 $6,005
Westpac $12 $3,948
Commonwealth $11 $5,591

It doesn’t cost a bank $4,000 to send $100k overseas and transfer the money. The banks are taking advantage of the fact that you, the customer, doesn’t see this fee. The fee is not declared, so the customer does not pay attention to it and think it’s somehow a normal or legitimate cost of transferring money.

Australian banks are particularly aggressive in charging hidden fees. If you transfer money from the US to Canada the fees are going to be a lot more reasonable. In some cases, as low as 1% but still for most transfers the fees are 2.5% and for more exotic currencies the fees are often a lot higher.

Let’s look at how you can reduce these hidden fees and save money when transferring around the world.

Internet financial technology companies are now offering a much better alternative

There are a number of companies cropping up that are providing a lower cost alternative to using the banks. The main ones that we suggest for large transfers are: CurrencyFair, TransferWise and OFX (previously OzForex).

Let’s compare these three options:

OFX – They are more focused on large transfers and they cut their currency fee as you transfer a larger amounts. It varies from a 1% fee for lower transfer amounts to 0.4% for larger amounts. Minimum transfer of $500 for OFX.

TransferWise– is a new kind of financial company that specialises in smaller transactions for which you pay a low, upfront fee between 0.5% and 2%, depending on the route. Their system is based on local bank account transfers, which makes them much cheaper compared to other providers and banks.

CurrencyFair – This is a bit different to the other options as it also has a marketplace where you can directly exchange with other participants. This allows you in theory to achieve the market exchange rate or perhaps even better if you have the patience to wait and exchange money. They also have a fast option which is a 0.5% fee.

Epay Global remittance - EPAY is a third-party global payment company headquartered in Hong Kong. Founded on March 21, 2014, English name epay, official website www.epay.com, Epay is committed to providing online payment processing services to enterprises and users around the world to solve the international online payment problem under the globalization trend.

Epay Global Remittance is one of  Epay business, it using blockchain technologies to implement a cross-border payment. It is different from the traditional remittance method and has two characteristics: fastest and low cheapest(only 1%~2%point). Through Eusd, equivalent to USD connects more than 3,000 currency changer shop in the world, and preferentially matches the lowest rate exchanger. If you are an overseas worker, you need to transfer money to your family, so choice Epay, faster, within two hours, the cost only needs 1%~2%

Note Five free transfers with CurrencyFair if you use the link above!

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