Money Transfer Operators such as Western Union or Moneygram operate cash desks all over the world providing immediate point to point money transfer. These services are convenient as they also operate in remote parts of the world and allow the sending of small amounts of cash to recipients even if they do not have a bank account. There is a price to pay however and for small amounts of money you can expect to be charged anywhere between 4% and 8% for the transaction.
Banks are the usual choice for most consumers, but a combination of fees and opaque exchange rates hide the true cost of making a foreign currency transfer. Fees of up to £25 are common and even if these transaction fees are discounted then banks will still add a margin of 5% to 7% hidden within the exchange rates that they offer. Transferring money abroad within the same banking group may allow you to avoid some of the charges, but it is unlikely that the exchange rate will be any more favourable. Payments between different banks may take several days to clear.
Foreign Exchange Brokers - If you are sending more than £1000 then the best option of making an international money transfer is to use a foreign exchange (FX) broker. Specialists in exchanges rates, FX brokers can be unto 5% cheaper than high street banks. As exchange rates fluctuate throughout the year, brokers can also offer fixed rate forward contracts offering you a fixed exchange rate no matter how it moves over a period of time. Finally, FX brokers can usually make same day transfers anywhere in the world. Foreign exchange brokers are the ideal choice for businesses wishing to pay suppliers or expats living abroad wishing to repatriate their money.
mymoneyspy.com is a free comparison site that monitors the exchange rates between specialist foreign currency brokers.
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