There are many ways of sending your money from one country to another without ending up in a mess. As in many things, expats can save themselves a LOT of trouble and cost if they do a little research and shop around.
Standard International Bank Transfers
Let’s consider the basic sort of expat money transfer requirement, and make the assumption you want something a little safer than using brown envelopes full of cash in the post!
For most expats, currency transfer consists of getting small to medium sized amounts transferred regularly from your UK bank account into your new overseas bank account in the local currency. These may be pensions payments, benefits, or any other form of income.This is rarely a problem. Your UK bank will be glad to oblige. You can set up facilities with them ‘on demand’ whereby you fax or call them, provide a secret code or two, tell them how much you want, and they’ll transfer it to your new bank. As part of that, they’ll automatically convert it into the local currency of your choice. It normally takes between 3-7 days to arrive and you’ll suddenly see it pop up in your new account. You can get 1-2 day transfers but be prepared to pay more for these.
You can also set up standing regular transactions like this that happen automatically on a fixed day of each month. Many state pensions and benefits can be paid directly without into your new bank without going through your UK bank at all. Some private pension organisations may also do the same. In both cases you’ll have to do nothing after asking them to set it up the first time – it’ll be automatic.
When you first set this type of facility up, your ‘sending bank’ or institution will ask you for various codes that tell them who your new bank is and where they are. You may hear these called ‘IBAN’ ‘BIC’ or ‘SWIFT’ codes but don’t panic – your ‘new bank’ will give these to you readily enough and they may be listed already in your new chequebook. It is all pretty routine and easy.
Costs – yes, as only breathing is free these days then expect to pay! You will probably pay a transfer charge per transaction to the sending bank. Additionally they’ll take a percentage on the conversion of your money as it leaves your old currency and changes to the new. More surprisingly, you may find that your receiving bank ALSO gets in on the act and makes a charge for receiving the transfer. All these charges vary by bank and can be percentage based, fixed fee, or a mixture of the two.
It is worth making enquiries and shopping around a bit. It may seem like the ultimate nightmare, having to deal with two banks at either end of a chain, but be prepared to do so. You’d be amazed at how negotiation could in some cases reduce your bank charges at both ends and by significant amounts.
As a general rule though, you’ll save yourself a lot of money if you transfer larger sums and less frequently. In other words let your money accumulate back home before you transfer it. It can often cost the same to send 1000 as 5000 so do be patient! Remember exactly the same system works in reverse – you can easily send money back home in the same way but you may find your overseas bank charges are higher when sending.
Credit Cards/Maestro/Cirrus/Cash ATMs
Thanks to the wonderful world of global technology we now live in, it is perfectly possible for expats to go to their local ATM and withdraw local currency funds directly from their UK bank account. This is great and a real alternative, but be a little careful.
Many banks make hefty charges for using this type of facility. You may also find that your weekly withdrawal limits are limited even if you have a lot of money in your account back home, as this is a security measure to counter card theft etc.
You can also use VISA or Mastercard to get cash locally out of ATMs and if you pay it off quickly and avoid interest charges then fine – but once again credit card charges for cash withdrawals can be high. Check the rates carefully.
Specialised Needs & Larger Sums
If you are regularly transferring larger amounts, or have a one-off big transfer to make, then it may pay you to look at specialist currency brokers and agents. You can find lots of them in yellow pages or via the web.
You can monitor on-line the exchange rates and call your own broker and ‘buy’ an amount of the currency at a time you feel the exchange rates are good for you. Once purchased and paid for, they will transfer the money into your overseas account.
These services offer significant advantages over traditional banks. Firstly you may well be able to talk your broker into offering you a better exchange rate than they’re even publishing on the net! Secondly, everything is clearly visible. The deal is ‘struck’ and you know immediately what rate you’ll get. Sadly in many banks you just have to wait until they transfer the money to see what exchange rate they have graciously decided to give you! Finally most people find that overall the exchange rate and transfer charges are cheaper than banks and that really can save you a lot of money.
There are always things to keep in mind. Although these organisations are happy to set up monthly transfers etc and almost always beat the banks on exchange rates and efficiency, they are really mostly geared up to handle larger amounts. If you’re only transferring a tiny pension each month then they may not be too interested in your business. Even so, give them a call to find out or access their web site – it costs nothing and you may be surprised.
The only thing worth noting about these agency type services is that of course, they are frequently smaller companies than the major banks. Before deciding to hand them a vast chunk of your money you may wish to check their histories and guarantees. Check their references and ask around – existing expats are a great source for recommendations in this area.