Money Transfer Advice
For many of us, transferring money across national borders may not be an every-day experience. It may be related to a once-off activity, such as emigration or overseas investment. Or perhaps you are trying to purchase a property in a new country before moving there. Whatever the case, it can be bewildering if you are new to the process, and that is why you should research the options properly before committing yourself to anything.
When transferring money to another country, you have four options:
- Cash/Traveller’s cheques/Movable assets
- Banks
- Money transfer services
- Forex companies
Cash/Traveller’s cheques/Movable assets
This option involves converting all your funds into cash, traveller’s cheques or valuable items such as jewellery and travelling with them in your luggage or on your person. The most logical advice on this option is – don’t do it. Besides the enormous risk of theft and/or loss that it involves, you may also be breaking the law in some countries if the value of what your are carrying exceeds a certain amount. It might look sexy in the movies to walk around with a suitcase full of wads of bank notes, but it is probably one of the most stupid things you can do.
DO NOT try to carry large sums of money in your luggage or on your person.
Banks
Banks offer a money transfer and foreign exchange service. But there are things about banks that make their service unattractive. To begin with, banks love to charge transaction fees, and money transfer is no different. You may actually be surprised at how much a bank will try to charge you for making the transfer. Then there is also the fact that a bank won’t fight for the best exchange rate on your deal. They handle your deal in isolation, so they can’t really bargain about the rate. Added to that is the fact that the bank official you deal with probably doesn’t handle forex transfers very often, so there is no guarantee on the level of service that you will receive.
Money transfer companies
These companies specialise in moving funds across national borders. It is important to note that such companies are like banks in that they may charge you commissions and other administrative charges.
Banking generally means queueing…
Forex companies
These are international foreign exchange companies, also known as “currency companies”. Basically, they buy and sell currency, and assist their clients with money transfers, if that is required. There are advantages to making use of this type of company. Firstly, because these companies spend so much time changing currencies, they tend to exchange large amounts of currency (which is called “bulking”), and this means that they can negotiate better exchange rates than banks. Secondly, because the core business of a currency company is currency exchange, they do not need to charge administrative fees on the transaction, since they make their cut on the transaction itself, thereby saving you as the client a significant sum of money on each transaction. Also, they tend to be experts in the field of currency exchange, because it is basically all that they do. They can therefore give personalised, in-depth advice and service, unlike a bank teller, who does many other things as well.
If you are considering making a money transfer, you should seriously research the possibility of using a currency company. You may find that the advantages far outweigh those offered by the other options listed above.
