Are you looking to send money overseas and want to find the cheapest way to do so? You can compare a range of different international money transfer providers right here with Savvy. Choose a company which offers the highest exchange rates and lowest fees from our panel of trusted exchange partners and start your transfer today.
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Using an international money transfer company will nearly always be the cheapest way of sending money overseas. They will almost certainly be cheaper than using a traditional bank, as they can charge anywhere from $6 up to $30 to transfer money overseas. Paying by credit card can also attract hefty fees (often around $30) plus a percentage fee on the cash amount you wish to exchange. This fee can be as high as 5% of the total transfer amount.
On the other hand, companies that specialise in international transfers will, on average, charge around $10 or less for a transfer. The fee for smaller transfers can sometimes be as little as a dollar or two, which makes them a very economic method of getting money overseas safely.
However, there isn’t one international money transfer provider which will suit all customers, because the cheapest provider for one transfer (such as under $1,000) may not be the cheapest for another transfer (such as over $10,000). That’s why it’s important to compare providers with Savvy until you find one offering the cheapest exchange rates and lowest fees for exactly the sort of transfer you wish to complete.
There are two parts to the cost of transferring money overseas:
International currencies are traded 24/7 around the world at several major foreign exchange (FX) centres. The value of one Australian dollar constantly changes compared to other currencies. How much you get for your one dollar is known as the exchange rate. Even small differences in the exchange rate can mean the difference of hundreds or even thousands of dollars for your money transfer (depending on its size) which is why it’s important to compare providers with Savvy.
As there are buy and sell prices for currencies, the rate you should concentrate on is known as the mid-market rate, which is halfway between the buy and sell price. The closer the exchange rate you’re offered is to the mid-market rate, the better the deal is for you.
Some international money transfer services (and banks too) make their money by adding a margin to the exchange rate they offer. This is known as a mark-up. The bigger the mark-up charged, the more the transfer will cost you, so you should keep a clear eye on this when comparing your options.
Fees to transfer money internationally are either charged as a flat fee (for example, $15 per transfer) or as a percentage of the transfer you wish to make (from 0.4% to 0.5% of the transfer value). If a flat fee is charged, the exchange rate you’ll be offered will often be close to, or right on, the mid-market exchange rate; in other words, there may not be much of a mark-up on the exchange rate you’re offered. A percentage transfer fee will vary according to the provider you choose, the amount you wish to transfer and the destination you wish to send money to.
Some companies also offer fee-free transfers, either for a transfer over a set amount (such as $10,000), as an incentive to attract new customers or simply because they make their money on exchange rate mark-ups. Knowing which method of charging a company uses can be useful when comparing transfer providers. It’s always worth checking the exchange rate offered with fee-free deals to make sure you’re being offered the cheapest possible international transfer deal.
Which is best: a flat fee or a percentage fee?
This will depend on how much you’re wanting to transfer to another country. In general terms, flat fees are better for larger transfers over $5,000, as charging a percentage of this amount is likely to be much more expensive. However, percentage fees work best for small transfers. For instance, a $100 transfer with a 0.5% fee would only cost $0.50 compared to a flat fee of $10 or more.
Other factors which impact the cost of transferring money overseas include:
Savvy is partnered with a range of providers who can offer cheap, affordable transfers. Some of our top picks include:
If you’re using a flat-fee transfer provider, sending money less often will save you in transfer fees. However, if you’re using a company which charges a percentage of the transfer amount as a fee, be aware that minimum transfer limits may apply.
A forward contract is an agreement to set the exchange rate and fix it for a certain length of time. You can get a forward contract for anywhere between one day and 12 months. Think of it like a fixed interest rate on your mortgage: it’ll offer protection against falling rates, but won’t be so good if they increase.
A limit order is an instruction to carry out your international transfer when the exchange rate hits a set level. This way, you’ll know exactly how much you’ll receive. You may have to wait minutes or even days to achieve your transfer, but at least you’ll have certainty and will be able to budget in advance.
Since exchange rates move so quickly, it’s vital to constantly compare rates to make sure you achieve the cheapest possible international money transfer. Keep checking back in with Savvy to make sure you get the best deal possible.