Sending Money Abroad – 5 Things To Check Before You Hit ‘Send’
There are all sorts of reasons to send money overseas, but whether it’s for business reasons; paying the wages of an overseas employee, for example; personal, buying a property or sending money to a new country before relocating there; or family, paying for a son’s or daughter’s education perhaps; the same rules apply when searching for the right service.
Let’s take a look at the 5 things to look out for before making a transfer. It pays, literally, to plan in advance, take your time, and consider all the options available to you. You might be surprised how many there are.
1. Am I using the right Money Transfer Service?
In today’s world you will have no shortage of options when it comes to sending money overseas, and most of them will present you with convincing reasons why they represent the best option for you.
It is worth taking your time to review more than one service however. A high-street bank, for example, can charge up to 80% more than an equivalent service, either from a broker, who deals in large volumes and can offer you a better spread, or a peer-to-peer transfer agency such as Transferwise, which allows you to “swap” your currency with somebody looking to change into the currency you hold.
A great way to compare rates is to take advantage of our simple widget – simply key in the amount, and the currency you want to transfer into, and we will show you the rates quoted by a range of different agencies and brokers, so you can make a more informed decision.
2. Should I hold off until exchange rates improve?
This is always a difficult decision to make. Many factors go into deciding how much a currency is worth at any given moment; the strength of a country or region’s economy, the strength of the destination country or region’s economy; the political stability of a country; recent global events; stock market trading.
The prices of currencies can fluctuate significantly from one day to the next, so the best advice is to take both a long-term and short-term view. Are there any significant events on the horizon (something like Brexit, for example), that could have an obvious influence on a currency, in this case the pound?
This can affect currency prices in both the short term and long term – it’s always worth looking up on online to see what currency traders are talking about, or buying a newspaper and reading up on the destination you are travelling to, as well as domestic news.
You can always speak to your broker too, it’s what they are there for after all!
If the coast looks clear, and you have followed all the advice above, it’s time to be decisive. Inevitably there will be times when you lose out, so if it’s a large amount you are transferring, the more information you take in, the better.
3. Is it better to send the whole amount at once?
Generally, it should be, due to the fact that brokers will tend give you a better rate, or “spread”, the larger the amount you are sending.
In some circumstances, however, such as when the price of the currency you are sending to or from is especially volatile, parcelling up your money and sending it in batches may be more advisable.
Again, it’s worth checking with a broker as well as trying to keep abreast of the situation yourself. If in doubt, and you are planning well in advace, don’t rush into a decision, but try to reason out, using a spreadsheet if necessary, what your best options may be.
4. Is the transfer agency I am using authorised
This is important. You should always check that the broker you are dealing with is authorised, because this means they are policed, in the UK for example, by the Financial Conduct Authority, which exists to fight your corner.
Also, only regulated firms are signed up to the Financial Services Compensation Scheme (FSCS), which will refund you up to £50,000 of your money in the event that the financial firm you are using goes bust and is unable to return your money to you, or turns out to be less than reputable.
5. How can I be sure I am getting the best rates
This is certainly an area where The Money Cloud can help. As mentioned above, you can check the rates of more than 20 authorised brokers and overseas transfer agencies simply by typing in the amount you wish to transfer, and entering the currency.
Our widget will show you the rates offered by all the different firms, and you will also be able to “drill down” and find out more information about each firm and learn how they work.
Then, all you have to do is decide which factors are the most important to you, whether it’s finding the best rate, the flexibility of the service offered, or the smallest fees charged and make a decision based on real time, transparent data.