Tips for Australians sending money overseas

Whether you're off on a backpacking adventure, studying abroad for uni, taking a job transfer, or making a permanent move to another country, managing your money across borders is one thing you want to get right. 

Understanding your options for transferring money internationally will help you save time and avoid costly fees, no matter how long you're staying or where you're heading.

If you’re planning to live abroad for less than 12 months — for example, to study or travel — it’s smart to keep your Australian bank accounts open. This way, you can hold your money in AUD and transfer it to local currency when needed, saving you from unnecessary exchange rate costs.

Use a debit or credit card with no international fees

Credit cards and debit cards are convenient for payments while abroad, but be mindful of foreign transaction fees. Many cards charge around 3% for currency conversion, which adds up over time. Look for cards that offer no international fees or even reward points for overseas spending. Setting up online banking will also make managing repayments easier while you're away.

Minimise atm withdrawal fees

ATM fees can be steep when using your Australian debit card abroad — up to $5 per transaction. To cut down on these costs, look for a debit card with low international ATM fees, or choose a bank that has partnerships with global ATM networks. Consider withdrawing larger sums to avoid paying multiple fees for small withdrawals.

Remember, don’t use your credit card to take a cash advance as these can attract significantly high interest charges.

Prepaid travel cards: plan ahead

Prepaid travel cards are a great way to lock in exchange rates before you leave. You can load them with foreign currency and use them like a debit or credit card. Many of these cards are reloadable, but check for any fees when topping up. This can be a good option to manage your money and avoid conversion costs while overseas.

If you're making a permanent move, you'll need a more strategic approach to managing your money, especially for large payments like rent, deposits, or purchasing big-ticket items.

Use international money transfers (IMT) for large payments

For big expenses, such as paying rent, buying furniture, or even a car, credit and debit cards might not offer the best value. IMTs can often provide cheap money transfers by offering better exchange rates and lower fees compared to banks. Services like TorFX, Wise, XE and OFX can offer quick, easy and competitive transfers, potentially saving you a lot of money.

Consider spot rate contracts

Spot rate contracts let you transfer money based on the current exchange rate. This is the most common service and works well for smaller transfers or large one-off payments. However, the rate will fluctuate depending on market conditions, so if you're transferring a larger sum, you might want to explore other options to lock in a better rate.

Lock in exchange rates with forward contracts

If you know you'll need to transfer large sums of money in the future, a forward contract can protect you from exchange rate fluctuations. This allows you to lock in the exchange rate for a future transaction — sometimes up to two years in advance. This is especially useful for major payments like property purchases.

Set up limit orders for better exchange rates

With a limit order, you can specify the exchange rate you want, and your provider will automatically transfer funds when that rate is met. It’s a set-and-forget method that saves you from constantly checking exchange rates. Just keep in mind that once the rate is triggered, the transfer is final and you can't change your mind.

Before you make your first transfer, there are a few steps to take to ensure everything goes smoothly.

Set up your account early

Most international money transfer providers have a simple sign-up process that can be done online. Be sure to complete your account verification well in advance of your transfer to avoid delays. This is especially important if you’re planning a large or complex transfer.

Double-check recipient details

When sending money abroad, you’ll need accurate information for the recipient, including:

• Full name, address, and account number
• IBAN (International Bank Account Number) or bank account number
• SWIFT/BIC code (identifies the recipient’s bank)
• Any other information like routing or sort codes

These details are crucial to ensuring your money reaches the right account without any hiccups. If you want to learn which IMT provider might be the best, consider checking out the winners of the 2024 Mozo Expert Choice Awards.