Do you live far away from home or run a global business? If so, then it’s very likely that you have come across the need to send money abroad to family, pay bills, or even issue salaries. However, it’s less likely that you’re aware of all the different ways you could be charged hidden fees on your transfers. This obviously means paying more out of your pocket and having less money to send overall. We consulted with financial experts CurrencyFair regarding this monetary issue and they shared three ways to save when making money transfers in different currencies.
1. Compare exchange rates
Before making a transfer, do a quick Google search and compare the exchange rate offered by your usual transfer provider to the currency market rate available. This simple step could lead to serious savings on your money transfers. The reason for any difference in exchange rates is the additional margin that providers can tack on to the rate, which can be as high as four percent. For this reason, customers get less money out of their transfer.
Once you see the difference in what you are being charged, this quick comparison could lead to you changing providers and thus saving money on your transfer. CurrencyFair’s margin is typically around 0.45 percent on top of the currency market rate available on Google. See how much you can save compared to your usual transfer provider using their live calculator—try it out below!
2. Discover new exchange methods
While comparing exchange rates is a great way to easily save on international money transfers, it’s much more difficult to predict those exchange rates themselves. Various factors cause the value of currencies to fluctuate constantly. However, if your international payment is not urgent, setting up a transaction to exchange at your desired rate could not only save you time and effort tracking such market movements yourself but—most importantly—it could also save you money.
CurrencyFair offers a peer-to-peer marketplace where customers who are happy to wait for a specific exchange rate can request this ideal rate, then get notified when their trade is matched with a peer. Customers could even match at a rate that is better than the currency market rate on Google—meaning even more savings, of course!
3. Read the small print
Traditional providers often have promotions that seem to offer savings on money transfers, but upon closer inspection of the small print, customers will realise how they are actually paying fees and being charged in other ways. Phrases such as “commission-free” and “fee-free” are often accompanied by terms and conditions that reveal how these fees are just being added onto the exchange rate, rather than as an upfront amount.
Then there are the additional fees charged by intermediary banks (or even the recipients’ bank) to consider. These third parties can each take off their own fee, leaving you with less money than planned. CurrencyFair charges one fair fee of €3 (or the currency equivalent) and, when needed, will always advise customers to check with their banks and find out if they are at risk of being charged third-party fees. Sometimes these are unavoidable, but we think it’s only fair for companies to advise customers if and when they do occur. Following these three simple steps could help individuals and businesses get bigger savings on their international money transfers.