Skip the big banks to save when sending money overseas
If you are one of the many Australians who regularly send money to family overseas or conducts business internationally with the big four banks, it might surprise you to learn that you are being hit with some of the highest money transfer rates in the world.
Although many of us like the convenience of banking with the big four because we have an existing relationship through a bank account, mortgage or credit card, when it comes to international money transfers staying loyal to the top end of town can really burn a hole in your pocket.
Mozo's latest research has found that moving your money with one of the specialist online money transfer providers such as XE, WorldFirst and OFX can save you 4.7% on average.
When we looked at someone transferring $10,000 into US dollars, pounds or euros, we found savings of up to $400 on offer through the more competitive online providers.
The message is clear: as with any financial product it really pays to do your research when looking for an international money transfer provider.
Our findings come as the latest data from the World Bank reveals Australia remains one of the most expensive G20 countries for international money transfers. We pay an average of 7.77% on a $US200 transfer, well above the global average of 6.94%.
The World Bank's date for the third quarter of 2018 also shows Australia is among the top four most expensive G20 countries to send money from, behind only Canada, Japan and South Africa.
With all the research pointing to the big four banks failing to deliver for their customers when it comes to international money transfers, it's welcome news that the ACCC has launched an inquiry into foreign currency conversion.
The inquiry will examine price competition as well as the way prices are presented to customers and is expected to report back in May next year.
Tips for transferring money overseas
- Compare exchange rates - a more competitive rate means you'll get more foreign currency for your dollar.
- Transfer speed - specialists can process transfers in as little as one or two days while the big banks could leave you waiting up to five days. It's important to check the processing time, whether it can be reduced if necessary, and whether that will cost you extra.
- Transfer limits - find out if any limits apply, such as minimum or maximum amounts you can transfer either in one go or over a month.