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If you’re needing to send money back home or do an international money transfer, it can be difficult to decide on where to go and what is the best option. Who will give you the best rate? How can I save money on fees? So whether you’re wanting to transfer money online or exchange cash. I’ll give you all the details on how to get the best rate and how to avoid paying excessive fees!
Also, we’ve seen recently in the news, sadly some residents in Dubai and the UAE have been scammed by people offering money exchange services. So it’s now more important than ever to make sure you use trusted companies when sending money back home.
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Using your bank to send money
This is cardinal sin number one! While it may be easier, banks often charge you to make a transfer AND give you a bad transfer rate. This is a big no-no when sending money back home! Often banks will not show what exchange rate they are offering, so there’s no way to know if you are getting a fair rate or even worse if you’re being given a below-market rate! So don’t just go for the easy option by using your bank.
On top of this, they usually charge an expensive fee just for transferring the money. The cheek!
Not getting the best exchange rate
Ok so we know not to use a bank, but what about the main chains that offer foreign remittances or to send money abroad? Perhaps you use the same place and they give you a good rate. So you always go to them. Surely this is okay?
Just because one place gave you the best exchange rate before, doesn’t necessarily mean they will give you the best exchange rate today. Lots of exchange houses compete with each other but their rates change every day. Before you make an international money transfer make sure to check the rate they have advertised with others. It may have changed and others might be more competitive!
Not negotiating when exchanging cash
If you’re visiting a physical branch, especially if they are a money exchange. For instance, if you’re planning to take cash with you to another country or they’ll do the remittance on your behalf. Ask the salesperson, “Is this the best rate you are able to offer?”
Often they’ll give you a better rate than the one advertised, especially if you transferring a large amount. It might seem like only a small difference but these small amounts can add up for each transaction and will add up over time. Especially if you’re transferring money home on a regular basis!
Sticking to using traditional ways to do a money transfer
Most of the traditional ways to transfer money abroad like Western Union often set their own rates and charge a fee. I don’t recommend using them, as similar to the banks, they often end up expensive due to the fees and the exchange rate.
These days they are outdated and expensive! Back in the day, these used to be the few ways for you to transfer money abroad. Competing only with money exchanges and banks! So they could charge high fees while giving a below-market rate!
Now with modern technology, there are lots of options to choose from! So many that it can be daunting to decide and we end up sticking with those we already know. So don’t let fear get the better of you!
Not waiting for the right day to transfer money
If you really want to be a pro, you must keep an eye on the exchange rates and wait until it’s a good rate. Once you see that you’re getting a good rate that day compared with the rest of the month or even months. You can do your transfer on that day.
For example: You look back through the history of the exchange rate between GBP to AED. You see that the past month it’s mostly been 4.4 AED to £1. You wait and keep an eye on the exchange rate. It goes up to 4.6 AED to £1. So you do your transfer on that day. That means if you exchanged £1000 you would get an extra 200 AED due to waiting.
Obviously this can be quite risky as it may go up or down but even sometimes in a short period of a week, you’ll see small fluctuations and you can transfer on the day with the highest rate! Especially if you’re sending larger amounts.
Not shopping around online
With some of the more modern options such as PayPal, the fee to make a transfer is very small compared to the bank. They incorporate the fees into your transfer amount and show you the total the person will get. They also show you the exchange rate you’ll get so while it may look better than some high street options. You still aren’t getting the best rate!
This is why it’s important to shop around! Paypal can be good for smaller amounts such as sending £50 to a friend but it definitely not the best for larger amounts due to the exchange rate you get! So while they may be easier since you won’t need to go to a branch. They can end up being more expensive due to their rate than the traditional options! So this is why I do not recommend to transfer money via Paypal.
So where should you do an international remittance instead?
The best way to send money home is by using Transferwise! They always pay the market rate and show you clearly what you’ll pay. So no need to negotiate!
I’ve used them myself to send money home from Dubai to the UK. Even if I’d have got cash from an exchange and flew home, they actually worked out better due to the rate they offer. I really like how easy their website is to use and how quick it is to set up. Plus no stress of carrying cash on me!
So now we’ve finished the 6 mistakes people often make when transferring money internationally! I hope this helps you save some money when transferring internationally and if not today, I hope it does so in the future!
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