Every idiot in the world but for us Brits seems to be able to do cheap money transfers. The world is getting smaller and more Fools are having financial dealings abroad, but it can still easily cost £30 for us to make small transfers. Yet it doesn't cost banks anything like this to complete the transfer. (Sound familiar?) Plus, banks often charge you for receiving money transfers, as well as sending them. Grotesque!
There are all sorts of ways to transfer money abroad. Here are five of them.
1. TIPANET
Banks offer a few different ways to transfer money, just to confuse you. For about £8 (according to my bank Smile) plus foreign exchange commission, you can transfer money to six countries. It usually takes five working days. There are limits to the amounts you can transfer using this method:
TIPANET transfers:
Country | Limit |
|---|
Belgium | ¬50,000 |
France | ¬50,000 |
Germany | No limit |
Italy | €12,499.99 |
Spain | €50,000 |
USA | No limit |
The receiving bank may charge you for receiving funds.
2. SWIFT
This is how banks usually transfer money. Smile again told me that it costs £13-£35, plus commission on the foreign currency exchange. It usually takes five to seven working days to go through. You can ask for an urgent SWIFT transfer, which costs a minimum £17 and takes three to five working days. The receiving bank may charge you for receiving your money.
3. Euro CHAPS
You can transfer money to select European countries for £25 plus foreign exchange commission. (Smile's figures again, so this fee may vary.) It normally takes just two to three working days for the money to reach the receiving account. However - again - the receiving bank may charge you. There is also a possibility of other agents being involved who could apply a charge. D'oh!
Euro CHAPS transfers:
Eligible countries |
|---|
Austria |
Belgium |
Denmark |
Finland |
France |
Germany |
Greece |
Italy |
Luxembourg |
Netherlands |
Portugal |
Southern Ireland (Eire) |
Spain |
Sweden |
United Kingdom |
4. Online Payment Services
There are various services for online payments. One of these, called Moneybookers.com, claims that you just need the email address of the recipient in order to make a no-commission transfer, which will cost no more than ¬0.50. But, as one emailing Fool mentioned recently, these services can be viewed with suspicion by recipients.
Paypal and Neteller are better known services. If you open an account with them, you can send money within minutes to other account holders. You may pay no fees for the transfer, but you pay a fee on the exchange rate. Paypal, for example, charges 2.5%. Also, the recipient often has to pay a fee as well.
5. Foreign exchange specialists
These are designed for regular money transfers. Some, such as Interchange FX, offer a commission-free service and free transfers. Also, you can fix the exchange rate for up to two years in advance, which is useful if you're paying for a property that's being built overseas.
Although many foreign exchange specialists seem to have no charges, they will offer exchange rates which favour them.
It should be easier than this! But perhaps a table will help:
Comparison of five methods of international money transfer:
Method | Transfer fee | Exchange commission | Receiving
bank fee | Other info | Transfer speed (working days) |
|---|
Urgent SWIFT | 0.25%. Min £17; max £35 | Yes | Yes | | 3-5 |
SWIFT | 0.25%. Min £13; max £35 | Yes | Yes | | 5-7 |
TIPANET | £8 | Yes | Yes | | 5 |
Euro CHAPS | £25 | Yes | Yes | Other agents
may charge fees | 2-3 |
Online payment services | £0 - 0.35 | Sometimes | Yes | Often viewed
suspiciously by recipients | Same day |
Foreign exchange specialists | £0 | No | No | | Same day the direct
debit clears |
This is example data. Actual costs and transfer speeds will vary by provider.
Don't forget to consider the exchange rate you're offered. Particularly for larger transactions, it may be worth paying more in fees in order to secure a better exchange rate.
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