International Money Transfers

Sending funds overseas? Check out these money transfer options

What is an international money transfer?

An international money transfer is a safe and secure way to make international payments that may be better value and faster than using your bank.

The exchange rates offered by money transfer companies (brokers) can be better than the exchange rates offered by banks. The transfer fees they charge can often be cheaper than banks too – with some money transfer companies offering free transfers.

You can use an international money transfer company to make one-off or regular international payments. This might include sending money abroad as a gift or as a purchase, or regularly sending a salary or pension if you’re moving abroad. You might also need to send a larger amount to cover a deposit for a foreign property.

How does an international money transfer work?

There are normally three ways to transfer money internationally:

  • Transfer at the current exchange rate: sometimes called a spot deal, a transfer at the current exchange rate is the quickest and most straightforward option as you simply send the funds immediately at today’s rate of exchange
  • Forward contract: lets you lock-in today’s exchange rate, but allows you to transfer money at a chosen date in the future. This can often be any time up to 12 months in the future.
  • Limit Order: this is when you nominate your ideal exchange rate, and as soon as the rate is reached, the funds are transferred. There will be a minimum transaction for a limit order, which can be around £30,000 (or the currency equivalent). You can set an expiry date for your Limit Order, and this can often be any time up to 12 months in the future

You’ll need to sign-up with an international money transfer company and create an account.

You’ll then be able to book a rate online or over the phone, pay by debit card or bank transfer into the account you’ve created. Once they’ve received the money, the broker will then transfer the sum to your recipient on the best day for you.

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International money transfer comparison

The cost of international money transfers varies from broker to broker. MoneySuperMarket has teamed up with FXcompared.com to show you money transfer quotes from currency brokers. This will help you compare transfer costs quickly and easily, so you can make the most of your money.

If you want to send money as an individual, simply select the country you want to send the money from, the country you want to send the money to, and the amount you want to transfer. We’ll then calculate the cost of your international money transfer by provider to help you compare deals on FXcompared.com.

You can sort the results you see on FXcompared.com by ‘FXcompared ranking’, ‘Price’ and ‘User rating’ to help you find the right deal for your money.

You’ll need to visit the site or call the company’s broker to then arrange your money transfer.

If you want to send money as a business, you’ll need to answer a few questions about your business on FXcompared.com to then compare providers.

Exchange rates

Foreign exchange brokers typically do not charge a fee for transfers of more than £3,000. They also generally offer better exchange rates than the high-street banks.

It’s common for banks to charge a fee on top of an international bank transfer, which could be as high as £40.

If you tally up how much you can save by avoiding fees, plus any money you save thanks to a better exchange rate, you might find that a currency broker is the more affordable option.

Forward contracts

A forward contract can seem appealing if you don’t want to have to worry about exchange rate movements, or if you expect the rate to get worse. Remember, however, that currencies can be volatile and there is the risk that the rate could move against you.

The exchange rate on a forward contract is calculated by adjusting the current rate for so-called “forward points”, so it’s not the same as the current exchange rate. Your broker should explain the terms and conditions of the contract, but it’s worth making sure you understand the cost before you go ahead.

You do not have to pay the full price of a forward contract up front, though you will normally have to put down a deposit, with the rest due on the transfer date.

Regular payments

Foreign currency brokers can usually arrange regular payments to whoever is receiving money from abroad, perhaps to cover a foreign mortgage or school fees, for example. The minimum payment tends to be about £500.

Consumer protection

You should always check that your broker is authorised or regulated by the Financial Conduct Authority (FCA) for peace of mind that your money transfer will be secure. The firm must then operate within certain guidelines to safeguard consumers and keep your money separate from the money transfer company’s own money.

Ideally, the firm should offer the protection of the Financial Services Compensation Scheme (FSCS), so you are guaranteed to get your money back if something should go wrong. The FSCS covers deposits of up to £85,000. Some money transfer companies won’t offer FSCS protection.

Currency pairs

It can be a good idea to keep an eye on fluctuations in currency pair exchange rates, and secure a favourable rate for your future transfer when you see it – this can help you save money on larger transfers.

Popular (major currency pairs) typically include:

  • EUR/USD (euro/US dollar)
  • USD/JPY (US dollar/Japanese yen)
  • GBP/USD (Great British Pound)
  • USD/CHF (US dollar/Swiss franc)

Other major currencies that are often included against the USD include AUD, CAD and NZD.

Minor currency pairs (cross pairs) do not include the US dollar but can still be frequently traded, and against major currencies (excluding US dollars) and other minor currencies. Exotic currency pairs are made up of a currency from an emerging market.

In a currency pair the first currency (shown left) is the base currency and the second (right) is the quote currency. The figures indicates the amount of the quote (second) currency is required to buy one unit of the first currency (base).

How can you send money to someone in another country?

You can either send money to someone in another country using an international money transfer company (an online broker), or you can set up an international money transfer through your bank or building society.

Can you send money anywhere in the world?

International money transfer companies support payments to almost any country in the world, but there may be limitations.

With some countries, a provider may be able to send money to the country but not from the country.

A provider may also process personal payments to and from a country, but it may not be able to offer this service for business payments.

There may be limits to the amount of money you can deposit as a debit payment. Any larger payments may need to be sent via domestic wire.

There may also be limits to the currency they can send.

You will need to read the provider’s list of supported countries and restrictions to know if your international money transfer is possible.

Are international money transfers taxed?

When it comes to transferring money international and paying tax, it’s a good idea to seek the advice of an independent financial adviser (for instance an accountant).

Different countries have different rules on how much tax you should pay on any money received, and this will depend on the nature of the money – for example, whether the money is a financial gift, a pension or a regular salary.

How do you receive an international money transfer?

An international money transfer can be paid directly into your bank account, just like with a regular bank transfer. The international sender will need to provide the international money transfer company with your:

  • Name (the account holder’s name)
  • IBAN
  • SWIFT/BIC code

Depending on the location of the receiving country, you may also need to provide details relevant to your country’s banking system, including:

  • Your bank’s name and address
  • Your routing code (Australia/ New Zealand/ South Africa)
  • ABA number (USA)

IFSC code (India)

How do you track an international money transfer?

Your international money transfer company should give you a confirmation number for your transaction, which you’ll then be able to use to track your money transfer online or over the phone. 

Is there a limit to how much money you can send overseas?

The international money transfer limit will depend on where you’re sending the money from and to, and the provider’s security limits.

It’s a good idea to read the provider’s terms and conditions so you know if it’s possible to send that sum of money abroad through them, or whether you need to approach a different provider.

International money transfer companies might have a minimum limit for how much you can send per overseas transaction – if the amount you need to send doesn’t reach the minimum then an international transfer through your bank might be more suited.

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We work with our home, money and insurance partners to find you deals that you can compare.

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