How to find the best deal for money transfers

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There are many reasons people may want to send money from the UK to another destination so we explain how to find the best deal for money transfers. This can all be taken care of by your bank of course, but there are also many specialist money transfer companies that can make things easier and save you money in the process.

Some of the reasons people may want to transfer funds include:

  • Sending money to friends or family living abroad
  • Buying a property in another country
  • Paying for a mortgage or bills on an overseas property
  • Paying tuition fees for your child
  • Helping a family member or friend who is travelling abroad
  • Paying for a wedding abroad
  • Making investments in another country

How much does it cost?

There are two costs associated with money transfers:

  • Transfer fees
  • Exchange rates

Transfer fees are levied by the bank or money transfer broker for using their service. Some companies don’t charge a transfer fee, waive it for special promotions or charge different fees depending on how you pay. High street banks for example do not charge a transfer fee if you make the transfer using online banking via their app, but if you make the transfer in a branch or by phone there is a fee (usually around £25).

However, transfer fees are only part of the story. The exchange rate that’s used to convert your pounds sterling to the destination currency also needs to be factored in, and this can have a much bigger impact on the final amount being received at the other end.

There is no such thing as a standard exchange rate. The closest you’ll see is the interbank or mid-market rates advertised online, but you won’t get these rates as a customer. Whoever you use to make the transfer will take the interbank rate, subtract a percentage from it and use this lower rate to convert your currency. Banks are known for taking 5% or more off the rate they offer you, but you won’t realise this until the last minute because they don’t give you a rate until you enter all the details.

Specialist money transfer brokers can save you money by cutting down on the transfer fees and / or offering better exchange rates. In fact, some money transfer brokers are now offering the actual interbank exchange rate on money transfers and just charging a small transfer fee instead. If you take a look at our comparison table we’ll show you the current live rates offered by a number of banks and brokers after all fees have been included. You can see in seconds exactly how much will be received from your transfer.

How it works

  1. Use our comparison tool to find the best deal and click through to the brokers website to start the process.
  2. You will need to register initially to create a free account.
  3. Follow the instructions to make the transfer. You’ll be given an instant breakdown of costs.
  4. Pay for the transfer in your local currency and the broker will convert the currency and send it to the recipients bank account.
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Receiving funds

Once you’ve created an account you’ll be given bank details for the country you want to receive money from. For euros for example, you’ll be given a European IBAN number. For US dollars you’ll be given a US account and routing number. You can give these bank details to the person you want to receive money from so they can make a payment to you as though you were both in the same country. The currency they send will be converted into pounds sterling using the broker’s exchange rate and sent directly to your UK bank account. The person sending you money from overseas doesn’t have to have an account with your broker and neither of you will pay any extra fees.

How long does it take?

Simple transfers to or from European countries for example, are normally done within a few hours and the vast majority are completed within 1 working day. Some currencies may take slightly longer to fully clear depending on the destination country, the amount being sent and the recipient’s bank. The broker will let you know how long it will take for your transfer to arrive before you confirm the transaction.

Transfer limits

If you’re paying by bank transfer there are no limits to the amount you can send. Money transfers are especially suited for large transfers such as money to purchase a property overseas. The savings on exchange rates for these amounts can be massive compared to using a high street bank. Sometimes, banks will only allow you to transfer out a certain amount of money each day. If this happens you can just make multiple transfers spread over a number of days.

If you’re making a transfer from your credit or debit card, your card provider may impose a limit on the amount you can spend. This limit is usually from £2,500 – to £10,000 but you should check with your card provider to be sure. Some money transfer brokers may also impose a limit on transfers made by card, particularly for new customers making a large transfer for the first time.

Providing ID

Opening a money transfer account is no different to opening a bank account. You need to provide some ID to verify your identity. The brokers we compare are all licenced and regulated financial institutions so they need to know who is using their service to help combat money laundering and scams to keep everyone’s money safe.

Sometimes your identity can be automatically verified when you pay. If you are paying by bank transfer and the name on your bank account matches the name you used to set up the money transfer account, you may not need to provide any further identification.

Other times, depending on how much money you’re sending and where you’re sending it from, you may be asked to verify your identity. In most cases you’ll be asked to scan or send a photo of either your passport, driver’s licence or national ID card. If you’re sending a large amount, usually £50,000 or more, you might need to provide some additional documents that show how you acquired the money.

Conclusion

It’s now easier than ever to transfer money to all parts of the world and for many different reasons. We’ve made it even easier for you to compare the costs of your transfer and find the best money transfer deals. If you want to keep up to date with the latest money transfer promotions then you can sign up to our monthly newsletter.

Posted by Graham Morley

Graham Morley

Graham is the Business Development Manager for Compare Holiday Money.

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