Article by Mozo
As you let your fingers do the work, you discover your dream boat online at half the price that what it costs here in Australia. Only problem, it’s halfway around the world on the Mediterranean coast! This could be a challenge, not only shipping it to Australian shores but paying for it too. Whether you’re buying a fishing boat, yacht or large motor cruiser (all of which cost a substantial amount of money) from a remote location, the most cost efficient way of paying for it is by making an international money transfer through a foreign exchange provider. However, keep in mind, it costs around $40,000 to freight a yacht from Europe to Australia.
An International Money Transfer (IMT) is when you transfer money from one account in one country to another account in another country. For example, you may live in Cairns and you want to purchase a boat from Dubrovnik in Croatia so you would have to make an IMT. You then need to choose between a bank and a Specialist FX to make the IMT.
They’re familiar, trustworthy and a place where most of us safely keep our money. However, banks are not necessarily the best option for making an international money transfer for buying that overseas boat. Banks have poor exchange rates so a lot of that money you’ve saved for that dream boat can get swallowed up on route to Croatia. When it comes to fees, the banks don’t hold back! Look out for a transfer free, sending and receiving fee. Also, IMT services are limited with banks as they usually operate during business hours only.
Foreign Exchange Provider
Also known as Specialist FX, these are the go to when it comes to IMT, they transfer money overseas and exchange foreign currencies day in and day out. Foreign exchange specialists such as OFX, CurrencyFair or World First offer competitive exchange rates, so you receive the best value for your Australian dollars. Their service is quick and offered 24/7 with fees a lot more reasonable than the banks. It doesn’t matter if you’re purchasing from a reputable manufacturer or an individual, when it comes to buying a boat overseas a foreign exchange specialist will be a reliable, safe and cheap option.
James has found a luxurious yacht a Frenchman is selling and he’s serious about making the purchase. He’s deciding whether or not to stick with his Australian bank to transfer the money over to France or to open an account with a foreign exchange specialist. To get the best value for his money James compared the differences between a bank and a foreign exchange provider. Excluding fees and charges, James realised he can save himself hundreds of dollars just by choosing a foreign exchange specialist over a bank.
|Bank||Foreign Exchange Provider|
|Exchange rate||1 AUD buys €0.5889 EUR||1 AUD buys €0.6240 EUR|
|Amount received for AUD $10,000|
In person $30, online $22
When you’re choosing a Specialist FX to purchase a boat overseas, keep in mind the following features. Each feature can make a huge difference in how much your recipient will receive and how quickly they receive their money.
#1 Exchange rate: This is one of the most important aspects to consider as the current exchange rate will determine how much you’ll get for your Australian dollars. The higher the exchange rate, the more money you will receive. Don’t go with the first provider you come across, take the time to compare exchange rates, a cent or two difference could make a huge impact on your final amount.
#2 Fees and charges: As you would have learned above, fees and charges can vary quite significantly between banks and money transfer specialists. General fees to be wary of include: a transfer fee, a sending and receiving fee, a cancellation fee and an amending fee.
#3 Transfer limits: Some international money transfer providers have a maximum and minimum amount you can transfer at a time or even a month.
#4 Turnaround time: This is the time it takes from the moment you book the transfer to the second it hits the recipient's account. Sending money can take between 1 and 5 days, depending on the provider.
#5 Transfer options: With the advancement of technology there’s no shortage of efficient and convenient ways to send money overseas. These include: online, over the phone, in person at a branch and some providers even have an app you can use.
So you’ve compared providers and considered the features that best suit your transfer needs now it’s time to gather all the information required to book the transfer. While each provider might require slightly different information, here’s the general info you’ll need.