3 traps to avoid when sending money overseas
With the Australian dollar lifting upwards of 75 US cents, now more than ever is a great time to send money overseas.
However, Mozo Director Kirsty Lamont warns that even with the Aussie dollar spike, Australians who send money abroad are losing out on thousands of dollars each year, due to easily avoidable mistakes.
“The fact is, no matter how strong the Aussie dollar, if you make a transfer with a provider that offers poor exchange rates and high fees, the value you’ll receive at the other end won’t be great.”
For those looking to send money overseas, Lamont says they should consider the following traps to ensure they get the most value out of their Aussie coin:
Trap #1 Sending money through your bank
It might seem like the easiest option, to simply login to your internet banking and make the transfer through your bank, but the exchange rate you’ll receive will generally be far less than what is on offer from international money transfer specialists.
For instance, at the time of writing our international money transfer calculator shows foreign exchange specialist TorFX, will offer $7,613 USD for a $10,000AUD transfer, whereas one big bank we looked at will pay just $7,209 USD - a significant difference of $404USD.
Lamont explains, “what we are seeing more and more of, is a big difference between what the banks are offering and what consumers can receive from smaller boutique transfer companies that specialise in overseas money transfers.”
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Trap #2 Forgetting to check the exchange fees
“One of the biggest traps for those looking to send large sums overseas, is percentage based fees, which are scaled to the amount you’re looking to send,” warns Lamont.
Consider this scenario - a 4% transfer fee might only equate to $4 on a $100 transfer but for someone looking to send $1,000 that’s $40 out of their pocket. “So while percentage based fees may be ok for smaller transactions, they can really take a significant chunk out of larger transfers, so this is something to really look out for.”
Trap #3 Not checking for discounts
Last but not least, Lamont recommends checking for discounts for things like making the transfer online or setting up regular payments. “You might like having someone take you through the entire transfer process, but keep in mind face to face and over the phone services usually have extra fees attached.”
“And if you’re planning on making multiple transfers, it can be cheaper to set up a regular payment plan, as many providers will wipe the fee for ongoing customers,” adds Lamont.
Are you looking to send money overseas? Mozo’s free online international money transfer comparisons help you find the best exchange rates. Mozo compares 14 providers across 22 currencies, with rates updated every hour.