Money transfer traps: the rookie mistakes to avoid this Christmas
If there’s one thing everyone knows, it’s that Christmas is the most joyful and generous time of the year. But for many Aussies with family overseas, Christmas morning often involves a laptop and a Skype call that lasts for hours.
If you’ve decided to ditch the hassle of excessive postage fees and send your loved ones cash instead this year, there are a few things to remember to order avoid any rookie mistakes.
Mistake #1 - Missing the transfer deadline
Similar to sending a parcel overseas, international money transfers (IMT) also come with cut off dates. Between setting up an account and the actual time it takes for the transfer to happen, it can take up to three business days for the transfer to reach its destination.
But it’s also important remember other factors that could delay the transfer time, like the provider you choose and the country you’re sending the money to. So play it safe by sending out your cash before the 19th of December.
Mistake #2 - Not shopping around
When it comes to managing our finances, we all love taking the easiest and most comfortable option which can often mean sticking with the big banks. But before you head down to your local branch to set up the transfer, you might want to consider other options, like using an IMT specialist.
With an IMT specialist you’ll likely have access to a more competitive exchange rate and lower transfer fees, which could help you save some extra cash and ensure your family member gets as much of the transfer as possible.
Mistake #3 - Forgetting to bundle transactions
If you’ve got more than one relative living in the same country overseas, you could be forgiven for thinking that you need to send out multiple transfers. However, with some providers charging up to $20 per transfer you could end up forking out hundreds of dollars just in transfer fees!
Bundling your IMT transfers is a much more cost effective solution, as it allows you to send multiple transfers to the same country at the same time.
Mistake #4 - Not understanding the difference between a spot deal and a forward contract
It’s safe to say that international money transfers are a little different than transferring your mate cash for dinner on Saturday night. There’s a bit more jargon to pick up and a few different ways to get your cash to where it needs to be. And it’s important to understand the difference as it could mean missing out on serious savings.
A forward contract allows you to lock in an exchange rate for a transfer you’ll make later on, helping you get the most bang for your buck. On the other hand, a spot rate or spot deal is the quote you receive from a foreign exchange provider. However, these are only temporary and apply then and there, meaning you’ll need to apply for the transfer on that day.
Mistake #5 - Forgetting minimum transfer amounts
With all the hubbub around Christmas time, it’s easy to forget a few things. Many IMT providers have minimum transfer amounts, which can sometimes start at around $1,000. So if you’re not planning on sending that much, you’ll need to shop around to find another provider that permits smaller transfers.
Need to make a transfer before Santa rolls around? Then make your next stop our IMT comparison tool to check out today’s rates.