A Complete Guide to Transferring Money Abroad

Transferring money abroad

Whether you’re travelling long term or living abroad as an expat, there may come a time when you need someone back home to transfer you money. There are lots of reasons for this: it could be a backpacking emergency, a birthday present, or transferring all your money so you can buy a house and settle down in your new-found paradise. Money transfers can be tricky, with hefty fees, long waits, and unexpected requirements, so it’s important to do some research and put some serious thought into what you’re about to do.

Consider how much money you’re going to send, how often you’ll be making the transfers, and how fast you need the transaction to be, and do some research into the different options before proceeding. Drawing from this super helpful Money Transfer Guide from Baydon Hill, plus my own experiences and research, I’ve put together some information abut the different options.

  • Your Bank
    • Pros: Safe option, secured by the Financial Services Compensation Scheme (FSCS). Good for making regular payments to the same account.
    • Cons: Exchange rates are generally poor, and costs can be incurred from the overseas banks – plus it can take 3-7 days for the transfer to be processed.
  • Online Transfer Firm
    • Pros: Transfers are faster and often instant. Exchange rates can vary on an hourly basis.
    • Cons: Higher fees – these generally start at £10 and average commission is usually 3%. The FSCS may not cover these firms.
  • Foreign Exchange Brokers
    • Pros: Better exchange rate than with a bank, and with larger transfers they generally won’t charge a fee. Following account registration money can often arrive in the recipient’s bank the same or following day. More personalised service.
    • Cons: Some FX brokers won’t handle small transactions.

Transferring money abroad

How Much Will it Cost?

When you’re transferring money abroad, there are two main costs to consider:

  • The Fee – The charges or commission taken by the company.
  • The Exchange Rate – The hidden charge! Many companies offer a poor exchange rate, which means that you get a lot less for your money.

In order to make a decent comparison, try not to look at the different charges and exchange rates from each provider, and instead get a quote for how many euros/dollars/soles/etc you will get at the end of the transaction.

Instant Transfers

Make instant transfers a last resort, as these will generally be the most expensive. However, if there’s an emergency – for example you’ve had all your cards stolen whilst backpacking and need a family member to wire you some cash asap  – then there are options for instant transfers through an agency or an online transfer firm. The sender heads in branch or online and pays the money, then you can go in branch at the other end, present some ID or use a code, and pick up your cash.

One Off Small Payments

This is generally suitable for non-urgent transfers of smaller amounts of money – for example to send somebody a birthday gift when they’re travelling. There are a number of UK firms designed specifically for international money transfers; you make a payment to them via internet transfer, they’ll convert the currency and send it to the receiving bank account in around 2-4 days. You’ll need to set up an account and have your address verified first, which can take a few days.

Sending Larger Amounts

If the amount you need to transfer is at a more ‘serious’ level, say a few thousand pounds or more, the only way to get a good rate is to use specialised foreign exchange brokers. These companies buy and sell huge amounts of foreign currency, which means they can offer very good exchange rates, taking just a small percentage profit on every pound (which adds up quickly for them, but less so for you)! Consider this option if you’re:

  • Buying/selling property abroad.
  • Making regular payments – like overseas mortgages and bills.
  • If you’re moving abroad and need to convert all your money.

Always get a quote from your bank first, although it’s rare that they’ll be the cheapest option. Then, shop around a little to find the best offer before setting up an account with a broker.

How Safe Is It?

Be warned, there is generally no compensation scheme if a firm goes bust. The regulations have become more strict over the past few years, but there is still a risk when transferring money this way. If you’re worried, search for the company’s name on the Financial Conduct Authority (FCA) register to see if it’s authorised or regulated:

  • Authorised: Large firms trading more than £2.4 million a month must be authorised by the FCA, which means that you’re money will be kept separate from the firm’s own accounts and is therefore protected should anything go wrong with the firm.
  • Regulated: Smaller firms can choose to be registered, rather than authorised, which means that there’s no safety process if something goes wrong.

So, in summary, always consider how quickly you need to transfer your money and what you’re transferring it for, and make sure you shop around to find the best deal from a transfer firm, bank, or foreign exchange broker. Be cautious in choosing the company – not just to ensure that you get the best rates, but also to ensure that your money is in safe hands.

Have you ever sent money abroad using any of these methods? Please share your tips and experiences in the comments! 

About Emily Luxton

An award-winning writer and travel blogger on a mission to explore the world through deeper, more intelligent travel. Seeking out adventure, cultural exchanges, food experiences and more as she attempts to get to know the world. Lover of the great outdoors, sunsets, good food, and the odd bit of luxury!

2 Comments

  1. There are amazing companies like azimo which is an online money transfer company where you can do cash pick up, I did this in India and I could pick my money up within 10 mins and I set thre transfer up on my phone! They are much cheaper in rates than the banks and they have to be regulated! Give it a try!

    • Thanks for the tip! Again, I think it depends on things like how much money you’re moving and how quickly it’s needed, but online transfer companies are great for quick, small transfers!

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