Technology today has made it easy and quick to transfer your money overseas – you can do it from your laptop or even your phone. You can make the process even simpler by avoiding these five common mistakes people make when sending money abroad.
1. Settling for the first deal.
Moving money around might not be the most exciting highlight of your weekend, but that doesn’t mean you should just grab the first deal you can find.
Using your bank might seem like the obvious thing to do, but it’s no secret that transferring money abroad with your bank is a rather slow and expensive ordeal. You don’t really know when it’s going or when it will arrive.
The reality is that you could save up to 8 times using alternative money services.
2. Not using the real exchange rate.
The rates charged by your bank aren’t the official rates. The real exchange rate is called the mid-market rate. It’s the official, fairest rate - the one you see on Reuters, Google, XE and Yahoo. Use this rate: it’s a lot less than your bank charges.
Look up the exchange rate in Google. Then look up the exchange rate that your bank gives you when you send money back to Ireland. That’s quite a difference; that’s a lot of extra money your bank is pocketing.
3. Missing the hidden fees.
Some services charge hidden fees when you send money abroad. Most people don’t even realize they are getting stung. These fees are added onto the mid-market rate so the final rate you pay is very high.
This means that when you send a specific amount, you get less money on the other side than you should.
4. Not being rate-savvy
Rates aren’t static – they change all the time.
Pay attention to whether the currency you want to transfer your money to is strengthening or weakening in relation to the currency you currently hold.
You can check online at reuters.com, or alternatively, download an app so you can check rate on the go; XE.com has a great smart phone app that works on Android and iOS.
5. Not using a regulated service.
When making any money transfer, you should be thinking about safety and security. You don’t want to find yourself in a situation where your money is lost and you can’t get it back. You should make sure you use a service that is officially regulated.
Official regulators change depending on your location. For services based in the US, you should look for those regulated by FinCEN, or using licensed banking partners.
Thankfully, companies like TransferWise exist to make sending money abroad a lot easier, and stop you making these common mistakes. TransferWise uses the mid-market rate and has no hidden fees – it’s up to 8 times cheaper than using a bank.
See how much you can save using the calculator below.