Five foreign money transfer mistakes to avoid this Christmas

As anyone who keeps half an eye on parliament will know, plenty of Australians are born overseas or at the very least have family spread around the world. In fact, recent figures from the Bureau of Statistics show that 28% of Aussies were born abroad - with the United Kingdom, New Zealand and China the most prevalent countries of birth.

It’s hardly a surprise then that a study conducted by the Commonwealth Bank last December  predicted that Australians would send roughly $3.1 billion overseas during 2017, with the research showing the pre-Christmas period to be one of the most popular times of the year to transfer money abroad to loved ones.

While the convenience, speed and variety of providers around makes cash a popular Christmas gift option to send to family and friends overseas, there are still some common mistakes which you’ll want to avoid before making any transfers this festive season:

Mistake #1 - Missing the Christmas deadline

The last thing you’ll need on Christmas Day this year is a call from your sister in London wondering where on earth her Christmas present is - whoops. While transferring money overseas may sound like it should be an instant process, between setting up an account and the actual transfer period itself, you could be looking at at least 1-3 business days for a transfer to reach its destination.

The amount of time it takes for your money to arrive obviously depends on a number of variables including the provider you choose and the country you’re sending too, but to be on the safe side you’ll probably want to have sent your money by Tuesday the 19th of December at the very latest this year (three business days before Christmas).

Mistake #2 - Transferring through a bank without comparing first

There’s no doubt about it - simply logging in to your online bank account to make an overseas transfer is an easy option. But that added convenience comes at a cost, as the big banks generally offer less generous exchange rates which ultimately means you’ll be paying more out of your own pocket.

For example, the Mozo international money transfer calculator currently shows (as of December 7, 2017) that sending $1,000 to your family back in New Zealand this Christmas with a foreign exchange specialist such as TorFx would work out at $1,096 New Zealand Dollars. That same transaction with the best big bank offer would net you just $1,042 - or $54 less.

Mistake #3 - Forgetting to check provider limits

You’ve squirrelled away some cash over the year and you’re now ready to transfer it overseas so your nephew can buy that tonka truck he’s been pining for, but just as you’re about to set up the transaction you see that there’s a minimum transfer limit. What a bummer.

While some foreign exchange providers have no limits at all, many have minimum and maximum transfer amounts you’ll need to adhere too - these can be from around $50-$250 at the minimum end, all the way up to maximum limits of tens or hundreds of thousands. Plus if you choose to transfer through your bank just be aware that the transfer limit could be impacted by your daily withdrawal limit.

Mistake #4 - Not bundling your transfers together

While you might not wrap all of your presents for your family in one big heap, bundling your transfers together into one transaction if you’re sending them to the same country could save you having to fork out multiple fees for each individual transfer.

The fees you pay tend to vary between providers, and the option you use to transfer (online, phone or in-person). Some providers won’t charge you fees at all, while others can charge anything from $4 to $20 or even $30 per transfer.        

Mistake #5 - Using a more expensive transfer option

It’s doesn’t have to be Christmas time to want to minimise the fees you’re paying and maximise the money you’re overseas loved ones get to receive. That’s why opting for an online transfer could be the cheapest way to send your money says Mozo Director Kirsty Lamont.

“While you might like the idea of having someone to talk you through the transfer process, bear in mind that face to face and phone services tend to incur steeper fees, so you could save by opting to go for an online transfer option” she said. 

“Many providers will also wipe certain fees for ongoing customers which could be handy if you’re planning to make more transfers in the future.”

So if you’re ready to send your own loved ones some money this Christmas, make sure you stop by the Mozo international money transfer comparison hub first to compare rates in over 20 different currencies.