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How To Avoid Big Fees When Transfering Money To a Foreign Bank Account

By Edited Feb 23, 2014 0 0

Sending Money Abroad

At some point you may come across the need to exchange money from your account to a foreign bank account in a different currency. This may be due to booking a hotel for a holiday, sending money to loved ones, or paying for something you have purchased online. Many banks will provide this service for you - however it can come with a rediculous charge for the service and at a very poor exchange rate, meaning that you are losing out. Wherever possible they will charge you as much as they can for the unusual services you require.

There are other companies which allow you to transfer or send money to other countries such as Western Union, Moneygram, or Travelex, but again these can come with quite expensive fees and sometimes with not the best exchange rates. Another good alternative is through Paypal. You simply need the other persons email address and it does the rest for you.

But this wasn't going to help me with the situation I was faced with.

My Dilema

I came across this issue when I needed to transfer some money from my UK based bank account to an account which I had recently set up to use for a business venture I am in the early stages of planning out in Madrid. The fee charged from my UK account was roughly 50% of the total amount I wished to transfer and I found that Western Union, although they were recommended quite highly, were charging a fee which was not much better.

I couldn't use my Paypal account to do this as I was effectively sending the money to myself and with being in no rush for the money to arrive in Madrid, I refused to pay extortionate fees for this service.

I decided to turn to social networks for help and put a plea on my facebook page for any friends' recommendations, and the usual companies kept coming up (along with the suggestion of flying over myself with a suitcase stuffed with cash), until a good friend in London recommended I take a look at a website called Transferwise. They said they have used it many times to send money over to the US and had not come across any issues with them. Now this works on a principle that you send them the money you want converting, they convert it into the other currency and then they simply pay it into the bank account you nominate. However the difference is in they way they keep their costs down. This is by combining your money with that of others who wish to carryout the same currency exchange and so due to the larger amounts, manage to keep their trading costs down and so the fee's they charge can be as little as £1, depending on the amount you wish to transfer.

My Experience with Transferwise

As I had been recommended by an existing customer, I was allowed to make one transaction with Transferwise free of any fees or charges. So to test this out I decided to send just €5 out to my Spanish account. A small amount yes, but an amount I could afford to lose if something happened or went wrong with the transaction. I was kept updated by email of what stage my transaction was at and in around 3 or 4 working days, I received confirmation from my Spanish bank that the money had arrived.

This, so far, is my one and only experience with this webste and, although I intend to use them again for transfering more money I will require in Spain, I would not dream to try to put my reputation on the line after only one good piece of service from a company. I simply wish to share with others that this could be a really good way in which you can save yourself some money, alot of money in the case of regular of depositors,  in bank charges when you need to exchange your money to a foreign bank account. If you follow the link in my signature above, it will actually allow you one transaction fee free like I was able to make use of, otherwise for further info just go directly to Transferwise's website. If you do try the service out for yourself then please leave a comment and let me know how you have got on, or if you know of other ways to save money when sending money abroad then please share it below.

Don't forget though that other services are available and you can still use your regular bank to transfer your money abroad safely and securely, and established companies like Western Union, Travelex, Moneygram and Paypal all do offer their own assurances so your money is not at risk. Before attempting anything that will involve money and charges then it always pays to shop around for the best deal for your requirements.



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