Australians send billions of dollars overseas annually, either to family or friends or to buy goods and services. If you need to transfer money across international borders, you may be wondering what the best way to do so is. Savvy is partnered with a range of international money transfer providers to help you find the best exchange rates and lowest fees. Compare providers all in one place and start your transfer today.
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Sending money overseas electronically can either be done through your bank or an international money transfer service. In most cases, international money transfer services are your best option compared to banks. Specialist money transfer services will often offer the best exchange rates and cheapest fees, since they’re specialists at international exchanges. Banks tend to charge from $6 up to $30 to make an international transfer, whereas international money transfer services charge less than $10 per transfer on average (up to $15).
However, it’s most important to look at the exchange rate hand-in-hand with the fees charged. There’s no point saving money on transfer fees if you pay more to exchange your money. Savvy has partnered with some of the best international money transfer companies so you have a wide range of choices to begin your transfer.
In what ways can I send money overseas?
Broadly speaking, you can send money overseas in three ways:
Most people these days choose to send money overseas using one of the first two options, as relying on postal services is a rather slow and largely outdated method. Sending money electronically is the cheapest option of the three, as while cash transfers can be completed instantly, you’ll likely have to pay a premium to do so.
The exact fees will depend on how much you wish to send and the country you wish to send it to. Rates and fees to less popular destinations tend to be more expensive, so transfers from Australia to New Zealand, the UK, the USA and India are typically the cheapest.
The process to send money overseas is quick and simple. Basically, you’ll need to set up an account with a transfer provider first before making your transfer. Once your account is set up, you can use it to send money overseas multiple times. The basic steps for sending money overseas are:
Some online transfer services can have your transfer sent, processed and received in another country in seconds. This makes them a highly useful option if you need your money to arrive at its destination quickly, as it often doesn’t cost much to complete. If your transfer is urgent, you may also consider a cash transfer. You can pay for your transfer in cash or use EFTPOS or a debit card to make the payment. Once you send it off, your recipient will be able to access the cash immediately.
However, instant transfers may not be the best way to send money overseas, as they can be more expensive than standard transfers. If you don’t need your funds to be received urgently, you’re likely to be better off transferring with a provider that offers higher exchange rates and lower fees. Additionally, not all international money transfer services permit the use of cash, limiting your potential options.
Naturally, the exchange rate you’re offered is the most important consideration, followed by the fees you’ll be charged to make the transfer. Always look for exchange rates as close to the mid-market rate as possible (which is midway between the buy and sell rate for the two currencies) as this represents the best deal for you and will maximise the amount your recipient will receive in their currency.
Some international money transfer providers charge a flat fee (averaging around $10) and others work on a percentage of the transfer amount as a fee. For example, SingX charges around 0.45% of the transfer amount depending on your money destination. Other areas to look at include:
Another benefit of using an international money transfer provider in preference to a bank is that many providers supply very useful currency exchange tools via their online or mobile apps. These tools include the ability to track your transfer, fix your exchange rate for a set period or set a limit order on your transfer, which are all highly useful tools if you don’t wish to send money immediately.
Limit orders work by setting an exchange rate at which you’re comfortable for the transfer to take place. Because international exchange rates move so quickly, it’s not always possible to exchange currency at a rate you’d be happy with. Therefore, with an app that offers limit orders, you can decide on an exchange rate and set it to make the transfer take place when the rate reaches a certain level. From there, the system will make your transfer when the specified transfer limit is reached. This means your transfer may even go ahead whilst you’re asleep in bed!
Forward contracts are like setting your home loan interest rate for a set period. The longer you wish to set your rate, the more expensive it may become. Most international money transfer companies can give you a quote that will be valid for up to 24 or even 36 hours. This is known as a spot price. However, some transfer companies allow you to fix your exchange rate into the future even up to a year or more so you know exactly how much your transfer will cost in the future.
This can be very useful if you’re doing business overseas. For example, if you order your football team’s shirts to be screen printed in China, you may have to pay for them when you’re notified they’re ready to send. You can lock in your exchange rate of the Australian dollar for 30 days so that when you do want to send your money to China, you’ll know exactly how much your team’s shirts will cost to print.
If your transfer isn’t time-sensitive or urgent, take the time to monitor the exchange rate between the Australian dollar and your destination currency. This way, when you come to complete the transfer, you’ll know what a good exchange rate looks like and be able to grab a bargain when you see one with Savvy.
Make sure you compare spot quotes before committing to the transfer. Be suspicious of any company which doesn’t quote you the exact exchange rate you’ll receive before you complete the transfer. Savvy has teamed up with a panel of reputable international money transfer companies who can tell you the exact cost of your transfer in advance.
If you intend to send money home to family regularly, it may be worthwhile sending a larger amount less often rather than a small amount more frequently. This is especially true if you’re using a provider who charges a set amount per transfer. With less frequent transfers, you stand a better chance of getting the best exchange rate for your transfer, as you’ll have time to monitor the market and do your transfer when the exchange rate is the best.
If the exchange rate between the Australian dollar and your destination currency is travelling in the wrong direction and you know you’ll need to send money overseas in the future, it could be worth opening an international account, transferring the money into your destination currency and storing it in your international account until you need to send it overseas.