How to Avoid Hidden Fees When Sending Money Internationally
There are numerous fees to keep in mind when sending money internationally. That includes fees with banks, charges and service fees, and fees associated with the currency exchange. For Australians who send money internationally, whether it be for business, travel, or to send money to family, understanding where the extra fees are and how to avoid them can help them save money and relieve some frustration. The good news is, there are ways to avoid unnecessary costs.
What are the consequences of hidden fees?
There are many ways to be affected by hidden fees, some of which include routing fees, service fees, and the selling exchange rates. Even though certain banks and/or money transferring services may state, low service fees, they may sell losing exchange rates. That could be hundreds of dollars lost in the end. These costs add up; with larger transactions, they can lead to losing money from the hidden costs.
Tip: Look for service providers who offer the best combination of pricing and rates when transferring. Danesh Exchange is an example of a service provider where you can see rates in real-time, along with other services.
Most Frequent Hidden Fees in Money Transfers
1. Poor Exchange Rates
One of the most common culprits, poor exchange rates, can pocket a significant chunk of your money. Banks and some providers mark up their rates above the interbank rate (the rate financial institutions use). This small percentage may seem negligible, but it’s impactful on thousands of dollars.
How to Spot It
Check the interbank exchange rate via trusted online tools. Compare it with what your chosen provider is offering. If the difference seems unusually large, that’s a hidden fee in disguise.
2. Transfer Fees
Some banks and services charge transfer fees as a fixed amount or a percentage of your total. While a $20 fee might not sound substantial on a $1,000 transfer, on smaller amounts, these fees can erode the value sent significantly.
Tip for Australians
Consider online-first or specialist services that cater to Australians sending money overseas. Some providers waive transfer fees altogether for certain transactions or amounts.
3. Receiving Charges
Many people forget that international transfers often come with costs for the recipient. If you’re supporting family overseas, these charges can decrease the exact amount they get, creating an awkward surprise.
Always check if the receiving bank charges fees and explore your options for a delivery method that avoids these costs.
Answering Your Questions Regarding Money Transfers
Q1. What is the cost of a money transfer at the bank?
The charge at the bank is not standard and varies. Going to an Australian bank, you can be charged anywhere from 6 to 30 Aussie dollars. Money can also be lost due to the additional charge when the money is exchanged.
Q2. What is the best method of comparing multiple money transfer services?
Using a comparison site that provides real-time exchange rates will allow you to determine how much money transfer services will cost you, comparing all of them.
Q3. How fast can I expect an online money transfer to be?
This can vary a lot. Some online services can process the transfer in a matter of minutes, and some can take a few business days. Usually, services that are online services can be expected to transfer money faster than banking services.
Q4. How can I avoid the exchange markups?
This is more about choosing the right money transfer services than anything, and some services will have little to no online markups.
Q5. Are there money transfer services that are specifically designed for Australian residents?
Danesh Exchange is an example of an Australian-centric money transferring service, which is designed specifically for Australians.
Finding the Right Provider
The first thing to look out for when considering a money transfer service should be the level of transparency a provider offers regarding exchange rates, potential fees, and delivery time. Customer reviews, and especially reviews tailored to the Australian market, can help with decision-making.
Flexibility is another critical factor. For regular senders, a provider with loyalty perks, and/or fee-free sending thresholds is beneficial.
Final Tips for Avoiding Hidden Fees
- Make sure to use an independent tool to verify the exchange rates.
- Use a direct bank deposit or an online wallet with no or low fees.
- Before sending money, check at least three different providers and focus on the total expense.
Final Thoughts
Excellent providers, like Danesh Exchange, help you take charge of your money transfers and avoid losing your hard-earned money on hidden fees. Doing your own research helps you to ensure that the maximum amount of your money is sent to the recipient, and with excellent providers like Danesh Exchange, you can avoid the stress and high costs usually associated with international money transfers.
