January 22, 2016
By Jeff Matheson, Managing Director, HiFX North America
Each year, an estimated 6 million households in the U.S. send billions of dollars to family, friends, and others abroad. Some are supporting children studying in another country, some are planning destination weddings or long-term vacations, and others are buying property -- a booming business of late. According to recent data, the growth of U.S. home buyer interest in Europe is up 180 percent over last year.
Whether you’re sending Swissies, calculating Kiwis or lending Loonies, if you’re one of these 6 million Americans, what is the best way to move money internationally and how can you find the best deal?
For most people regardless of whether they're based in the US or overseas, their bank or credit union is the first port of call assuming that it’s their best option. However, most banks offer poor exchange rates and charge a variety of additional fees.
Banks bank on the hunch that very few of their customers check the exchange rates and how much they’re paying. As a result they take advantage of a captive market and continue to cash in on customer lethargy.
It therefore pays to compare the fees and exchange rates offered by banks with those of an international money transfer specialist.
When making international wire transfers, the costs fall into two main areas: fees and the exchange rate. When shopping around and comparing your bank to a currency transfer specialist, make sure to look at both.
A multitude of fees, charges or commission can apply, both for the sender and the recipient. Many providers levy lots of small charges to disguise exactly how much it costs.
Many banks and credit unions claim to offer commission-free transfers then simply provide poor exchange rates instead. As a result it’s often difficult to compare one provider with another as some publish charges and others don’t.
But this minefield of complications actually boils down to a very simple question…
How much foreign currency will I get for my money, after all the charges have been applied?
Exchange rates often change by the minute, so to compare one option to another, experts advise comparing exchange rates in quick succession and jumping on the best offer provided. An international money transfer specialist can help here.
For years the idea of retaining such a specialist was considered both exotic and only for the uber-wealthy, but companies like HiFX and others are democratizing overseas money exchange, making it easy, quick and affordable. The concierge-like service is also a lure to anyone feeling less love from their banks these days ...