1 in 3 Aussies send money overseas, despite not quite understanding the cost involved
Recent research from international money transfer specialist Transferwise has shown that although Australia is a multicultural society with many residents who were born or have relatives overseas, we only have a hazy understanding of sending money to our loved ones across borders.
The research, released in time for the UN’s International Migrants Day, showed that 75% of Aussies think immigrants have made Australia stronger economically, culturally and socially.
Almost 30% of Australia’s population were born overseas, and a further 20% have at least one parent born overseas, according to Transferwise. Since 1945, 7.5 million people have settled in the land down under and more than half of Aussies have close friends or family overseas.
Considering that, it’s no surprise that one in three Australians have sent money overseas at one point, the majority (57%) of them transferring to friends and family.
But according to Transferwise, our understanding of the international money transfer process is less than perfect and only 20% of Aussies understand the true cost of making a transfer. This cost includes an upfront fee plus a markup on the exchange rate, but 18% of people think there is only an upfront fee, and 47% don’t know how the exchange rate markup is carved out.
In fact, one million Aussies think transferring money overseas is a service your bank provides for free - which is far from the truth.
So if you’re planning to send cash pressies to loved ones living overseas this Christmas, make sure you brush up on your international money transfer knowledge first. To help, here are some of the key features you should consider when planning to send money overseas.
- Exchange rate - The exchange rate is a big factor in determining how much cash your recipient will receive. For example, at the time of writing, Mozo’s IMT comparison tool showed the exchange rate from Aussie dollars to NZ dollars ranged from $1.0927 with some specialist providers to $1.0451 with a big bank - a $116 difference on a $2,000 transfer.
- Transfer fee - Upfront transfer fees can also cut into the value of your pressie. Some IMT specialists and banks charge no upfront fees at all, while others charge a fee depending on your transfer method. Transfers made over the phone and in-person can attract a higher fee, while online transfers often have lower fees.
- Transfer time - If you want your cash gift to arrive in your recipient's account before December 25th, then heed the transfer time laid out by your IMT provider! A transfer will often only take 1-3 days to be completed, but this is not a present you should be planning on Christmas Eve if you want to have everything go smoothly - and to get the best deal.
- Maximum and minimum transfer limits - Although not all do, some IMT providers have a minimum or maximum amount you can transfer in one go. Minimums often start around $200 - so if you’re sending multiple small cash gifts to family overseas, it might be a good idea to bundle them together to meet the minimum.
Ready to make your overseas money transfer in time for Christmas? Head over to check out some of your international money transfer options in our handy table.