The best ways to send money abroad

There are a number of different ways to send money abroad. If you want to know the safest and most cost effective methods, read this article.

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

Young woman holding credit card for online shopping at home

Image source: Getty Images.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

Whether you are sending money to relatives or buying a property overseas, there are a number of different methods to send money abroad. We take a look at the safest and most cost-effective options.

Things to consider

Your choice of method to send money abroad will depend on a number of factors.

Fees and charges

Companies that organise foreign exchange money transfers can charge you in three different ways:

  1. The person sending the money has to pay a fee.
  2. The person receiving the money has to pay a fee.
  3. Many companies offering their services ‘free of commission’ will modify the exchange rate in their favour.

Amount

Fees and charges can vary depending on the amount you are sending and the method you use. Many companies charge lower fees and better exchange rates for larger amounts.

Type of currency

As a rule of thumb, transferring ‘well-known’ currencies such as euros or US dollars tends to be cheaper and easier.

You may have problems finding a company that will transfer lesser-known currencies, and if you do, they may charge a higher rate.

Speed

Some methods are faster than others, so if you need a quick transfer you will need to choose accordingly.

Frequency

If you want to send money regularly to the same location, a more permanent solution might be best, such as a foreign bank account.

Best methods for sending money abroad

There are three main methods to send money abroad.

1. Using your bank or building society

This is a safe, secure and convenient method. If you contact your bank or building society they will talk you through the process.

You will need an International Bank Account Number (IBAN) and the Bank Identifier Code (BIC) for both your bank and the bank that will receive the funds.

The main disadvantage of using this method is that you may not get the best deal on larger amounts. Also, this type of transfer takes four to six business days, so it’s not the fastest option.

2. Using a specialist money transfer company

Examples of this type of company include Western Union, XE Money Transfer and CurrencyFair.

No account is necessary, and the transaction can be completed the same day.

Once the fee is paid and the money to be transferred is submitted, the sender is given a reference number. This number is given to the receiver who can use it to collect the money at an overseas office.

Before committing to this method, make sure you are aware of the fees and charges. They can be high depending on the company. Bear in mind that this type of company is not covered by the Financial Services Compensation Scheme (FSCS) so your funds are not protected if they go bust.

3. Using a foreign exchange broker

This method is useful for sending larger sums of money abroad. These brokers tend to charge lower fees and competitive exchange rates when transferring larger sums. This type of transaction can be completed the same day.

You may need to open an account to use this type of service, so you may need to plan ahead. Foreign exchange brokers are not covered by the FSCS.

Take home

If you are planning to send money abroad, think about your requirements first. This will have a big influence on the method you choose. Further information on sending money overseas is available from the Money Advice Service.

If you want to buy foreign currency for a holiday, check out our articles on how to buy travel money online and how to use an online currency exchange.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

More on Your money

Serious mid adult Asian woman listening on phone, sitting in office chair in dark room, holding paperwork
Personal Finance

I ended up worse off after my pay rise – here’s why

After a pay rise, I actually felt worse off than I did previously. It seems I'm not alone in feeling…

Read more »

Serious mid adult Asian woman listening on phone, sitting in office chair in dark room, holding paperwork
Personal Finance

Unemployment falls: who’s still hiring?

The latest ONS data shows unemployment has fallen once again. Katie Royals takes a look at what the new figures…

Read more »

A young woman sitting on a couch looking at a book in a quiet library space.
Personal Finance

Time to rethink retirement? Over HALF of millennials plan to delay it

A new report suggests that 52% of millennials plan to delay their retirement because of Covid-19. So is it time…

Read more »

Personal Finance

Energy price cap to increase by 33%? Here’s how you can soften the blow

Energy prices are already soaring, and there are growing fears that the energy price cap will be hiked in April.…

Read more »

Young woman holding credit card for online shopping at home
Personal Finance

Autumn Budget to introduce online sales tax? Here’s how it could affect you

The Autumn Budget will be announced next week, and rumours are circulating that an online sales tax will be introduced.…

Read more »

Your money

Friday’s Euromillions jackpot is UK’s biggest ever: here are your chances of winning

Friday's Euromillions jackpot stands at an eye-watering £184m! If won by a Brit, they'll become the biggest ever winner. Here's…

Read more »

A person holding onto a fan of twenty pound notes
Personal Finance

What do the latest GDP figures mean for you?

You may have seen reports that the UK’s economy has grown. But what do these GDP figures mean for you…

Read more »

woman sitting in wheelchair at the table and looking at computer monitor while talking on mobile phone and drinking coffee at home
Personal Finance

How to avoid energy price hikes

Energy bills are set to increase once more in October. Katie Royals takes a look at how you can avoid…

Read more »