International Money Transfers FAQ Fast Guide
If you’re new to international money transfers then you’re in the right place, this fast guide will run you through all the essential info you need to know and be aware of when transferring funds overseas from Australia.
In recent years the whole area of international money transfers has evolved. This is partly due to developments in internet banking and also due to the fact that many of us now transact globally on a regular basis. Paying uni fees, sending money to relatives, booking overseas holiday accommodation or buying an investment property, these are some of the common reasons you could be looking to transfer money overseas.
But regardless of why you need to send money, let’s get down to the how you do it, and answer some of the most frequently asked questions about international money transfers or IMT as it is referred to in the industry, as this is what is really going to make the biggest difference to your bank balance.
1. Who offers international money transfer services?
You’ll have plenty of options for transferring your funds. It depends on how much money you need to send and where you need to send money to but you can choose from the following:
Bank or credit union. Most banks in Australia will have money transfer services either available over the counter or via internet banking. They are a convenient option but often have higher fees and lower exchange rates than foreign exchange specialists. Also some internet banking platforms will have low daily limits so may not be good for larger transfers.
Online foreign exchange specialists. These days you don’t need to be a foreign exchange trader or even be transferring a large amount to use a specialist foreign exchange provider. Many have online platforms designed specifically for personal transfers and have some of the most competitive exchange rates available. You’ll find many of the major IMT providers which are regulated by ASIC listed on the Mozo site.
Alternative options. If you’re transferring a small amount of cash PayPal is an available option, as well as wire services like Western Union or even the Post Office. Like banks, these can be good options for small amounts of money but generally the exchange rates are less competitive and fees are higher than online FX specialists.
2. How do one off payments differ from regular payments?
It shouldn’t matter if you are making a small one off payment or large payments every month, your goal is to get the best exchange rate with the lowest fees for you.
Some IMT providers will have minimum transfer limits but we list these here on our site so that you can choose a provider that will match your transfer needs.
If you are going to be making regular payments, with some providers it is possible to lock in a rate in advance or establish an automatic payment plan so that funds are sent automatically so that you don’t have to do a thing.
3. What’s the difference between a spot rate, forward contract and a limit order?
FX terminology sounds more complex than it really is. If you are transferring money for personal reasons a spot rate is the exchange rate for that day and exact time. It is the on the spot rate so if you book your transfer in at that time, you will get that exchange rate for your transfer. Most banks and IMT providers offer spot rate services.
A forward contract lets you lock in an exchange rate now for a set time in the future when you need to transfer your funds. A limit order allows you to set an exchange rate which you want to convert at and when that exchange rate gets to that rate, your funds will be transferred. You do not have to monitor the market, your IMT provider will do this on your behalf.
4. What is a maturity date?
The maturity date applies to forward contracts, this is the date that the contract expires.
5. How long will my payment take?
If you are transferring funds in one of the world’s major currencies then most transfers will take around 3 business days if you are using an IMT provider. Depending on the currency and provider, it is possible for a same day transfer but for most transactions you should allow for several days before any payment is due for your funds to clear your recipient's account.
6. Will my funds be secure?
All IMT providers listed on Mozo are regulated by ASIC here in Australia and have encrypted payments platforms to ensure the security of your funds.
It is your responsibility however to ensure that the information provided by you regarding the beneficiary's bank account details is correct. Banks and IMT providers will not be responsible if you send funds to the wrong account.
7. Is there any legal paperwork to complete?
Before you are able to transfer money, you will need to have an account set up with the bank or overseas money transfer provider. To set up your account you will need to provide personal information and your identity will need to be verified prior to you being able to trade.
Under the Anti-Money Laundering and Counter Terrorism Financing Act all transactions are regulated by the Australian Transaction Reports and Analysis Centre 'AUSTRAC'.
8. Who has the best exchange rate?
It is important to understand that every bank will have currencies that they offer more competitive exchange rates with, so it’s important to shop around based on the currency or currencies you wish to transfer.
This is why we’ve made comparing exchange rates and fees as simple as possible with our IMT tool which allows you to choose your currency, amount and then ranks each provider and bank based on the best rate each day.