How to Make an International Money Transfer

Discover the Best Ways to Send Money Abroad

People who live international lives have many reasons to transfer currency across country borders. You may want to forward your paycheck or pension. You may be buying a property in a new country, or supporting a family member. If any of these situations describe you, you can save by understanding the best ways to make an international money transfer.

What Is an International Money Transfer?

Simply put, it’s the process of sending money internationally, from one country to another. It can also include exchanging one currency for another.

This type of transaction is often called an international wire transfer. In the past, important information about bank transfers was sent by telegraph – a system of wires.

That’s why international money transfers are still called wire transfers today, especially by banks. If you work with a bank to transfer funds internationally, or with Western Union, which started as a telegraph service, expect to use both terms.

The best ways to transfer money internationally are bank transfers and international money transfer services. Here’s an example of both types of international payments. In this example, and in this article, our default currency is U.S. dollars, or USD.

Isabella:

Isabella has two nieces, both studying overseas for a semester. Isabella wants to send each niece $100. One niece, Maria, is in London, in the United Kingdom. Maria asks to receive money via the transfer service Wise. Maria receives $100 via Wise and converts it to (about) GBP £80.

Christiana:

The other niece, Christiana, is in Sydney, Australia. Christiana asks her aunt to send the money via a bank transfer. After the bank transfer fee of $15, and conversion fees, Christiana receives $84, converted to AUD $133.06.

About International Bank Transfers

It seems natural to ask your bank to help you when you need to send money internationally. After all, banks help people save, send, and manage money through a variety of services.

As one of these services, traditional banks can help with transferring money internationally between banks. Today, this process is called an international bank transfer. Most international bank transfers are international wire transfers, also known as telegraphic transfers.

International bank transfers benefit from a bank’s support. An international wire transfer managed by a bank is relatively slow, taking one to five working days. It is also highly secure, because banks comply with national and international banking laws, including deposit insurance.

As part of this security, you provide a destination bank account for sending money abroad. You may also need to provide a SWIFT code. Many banks and brokers have, or ask for, a SWIFT code (Society for Worldwide Interbank Financial Telecommunication).

This is part of wire transfer security. For example, the Bank of America SWIFT code is BOFAUS3N for international transfers in USD and BOFAUS6S for international transfers in foreign currency.

You can expect to provide SWIFT codes for either or both parties in an international bank transfer. Bank customer service can help you find your SWIFT codes.

Finance

Financial Advice for Expats

Read More

How Much Do Banks Charge for International Transfers?

Traditional banks always charge a fee for overseas money transfers, from $20 to $50 per transaction, possibly more for sums over $10,000.

In addition, to exchange the money for the transfer into a different currency, you must use the bank’s currency exchange rates. Bank exchange rates are not the best exchange rates for you.

That’s because banks profit on the difference, or spread, between what they pay to get foreign currency and the rate at which they sell the currency back to you.

If you are transferring a large sum internationally and you want security and accountability, a bank transfer may still be worth it. People moving internationally often use a bank transfer to send money overseas for purchasing a property.

If you will need to send money abroad regularly, especially smaller amounts like a pension or remittance, you’ll want to look at money transfer services.

Finance

The Best Apps To Manage Your Money Abroad

Read More

About International Money Transfers

Money transfer services differ from bank transfers. Money transfers are handled by dedicated transfer agencies that specialize in sending money electronically via online accounts or wallets.

Because the transfer agencies focus on this one service, they can provide lower fees. They can send money quickly, often within minutes.

Some of these services are less secure than having money in a bank account. That may not matter, though, if the person receiving the money uses it or moves it quickly.

National Versus International Money Transfer Services

People love money transfer services because they are faster than bank transfers. They make it easy to send small sums to friends and businesses. But not all money transfer services work, or work well, for overseas money transfers.

Can You Venmo Internationally?

Venmo is a very popular fund transfer service in the U.S. However, it is only for fund transfers within the U.S. You can’t Venmo money from a U.S. account to an account in another country.

Can You Send Zelle Internationally?

Zelle is another U.S.-based fund transfer service. Again, it only works within the U.S., not internationally.

Can You PayPal Internationally?

You can send money internationally with PayPal to more than 200 countries, using 25 currencies. PayPal does have some international restrictions based on banking laws and to avoid high-risk countries.

And PayPal’s fees and exchange rates are higher than those of specialized money transfer companies.

If you like PayPal, consider PayPal’s special international money transfer app, Xoom. Xoom offers a familiar user interface and better international rates than PayPal itself.

How Do I Transfer Money to Someone Internationally?

The best way to send money internationally to someone is to use a service dedicated to global money transfers.

These are focused on sending money overseas, including currency exchange options. You and the person you are sending money to both need to have accounts or wallets with the same service.

International money transfer companies often focus on different benefits. Some work to send large sums of money quickly.

Others, like Western Union, are great for sending small sums or remittances frequently, or for sending money internationally quickly. Several have tools to help you get excellent exchange rates and make the most of your money.

For information on the best international money transfer apps, including an international money transfer comparison, see our detailed article on the best money transfer companies.

The Fastest Way to Transfer Money

International money transfers are the fastest way to send money between countries. They are not instant, but they are faster than bank transfers and wire transfers.

You may be used to services like Venmo, where local money transfers feel nearly instant. Compared to local transfers, international transfers include exchange and confirmation steps.

As a result, there is no instant international money transfer. Instead, there may be a delay in funds arriving in destination accounts, ranging from a few hours to one or two days.

Transfer Speed and Money Transfer Apps

You can choose a money transfer service that focuses on quick transfers, like Remitly, which promises international transfers in minutes.

If you prefer a service that offers the best exchange rate or the easiest experience for your entire family, you may need to be a little patient.

Here’s how long it takes to send money internationally with two popular transfer services, PayPal and Wise (formerly known as TransferWise).

• Paypal – When you send money overseas using PayPal, the money reaches a PayPal account very quickly, within minutes to hours. However, converting and exporting PayPal funds to a bank account takes 1 to 2 days. Using Xoom, the international PayPal tool, will speed up your overseas money transfer.
• Wise – Sending to a Wise account happens fast. For conversion and payment to a bank account after Wise, it can go through the same day or take up to 2 days. Moving your own money around within your Wise account and wallets can go more quickly. You can have converted funds available in your Wise account after a few hours, convert them into one of your five currency wallets, then use them via a Wise debit card.

The Cheapest Way to Transfer Money

Transferring and exchanging money always comes with a cost. For the cheapest international money transfer, try a reputable service.

Your goal should be to find a service that matches your needs and provides a good exchange rate. You may find that you use one or more transfer services for different countries or types of transfer to get the best rates.

Some transfer services have a maximum or minimum amount you can transfer. Others, like OFX, focus on sharing the best rates for larger transactions, over $10,000.

How Can I Send Money Internationally For Free Or For Less?

To start, choose the right international transfer service to find the cheapest way to send money abroad. Three of the best international money transfer services for smaller transactions are Wise, Ria, and Revolut.

These have modest costs from 0% to 2.5% for withdrawals, transfers, and exchange rates. Revolut has a very low allowance for personal transactions, less than $1,500 per month — still useful for students overseas.

To keep your money transfer fees small, keep your transactions big. Large transactions have lower fees per dollar than more frequent, small transactions.

For example, to send USD $1000 converted to Euros using Wise, the fee would be about $9, or 1%. To send USD $10,000, the fee would be about $52, or 0.5%.

Another way to get the most money on the other side of a transfer is to wait for, or seek out, the best exchange rate.

A difference as small as one cent in an exchange rate can have a big impact on the transfer amount for a large sum. The table below shows this impact for a transfer of USD $100,000 to Euros.

Some services let you track exchange rates and send notifications when rates are favorable. You can then log in and do your exchanges at the best possible rate.

Do I Have To Pay Taxes On International Wire Transfers?

Under some circumstances, you may need to pay tax on international transfers. When you send money overseas from the United States, and the transfer is USD $10,000 or more, the IRS is notified.

This applies to all kinds of international wire transfers, from a bank or from a transfer service. And you’ll need to pay tax on transfers over a certain amount, which varies depending on your purpose.

If it’s for your business or to a foreign bank account, the IRS will expect some tax to be paid. If it’s to an overseas account in your own name, you may not need to pay tax.

Planning several large fund transfers? Keep track of where your funds are and how much is in each location. U.S. citizens and businesses with funds overseas are governed by the Foreign Tax Account Compliance Act (FACTA).

That means you need to tell the IRS about funds you have in foreign accounts over $50,000, including filing U.S. taxes annually.

This gets complicated quickly. To comply with FACTA, many expats from the U.S. work with professional tax services such as H&R Block.

Simplify International Money Transfers

Thanks to today’s money transfer tools, it’s easier than ever to find the best way to transfer money internationally.

Take the time to research international transfer services. You’ll find how to send money abroad at the best speed, fees, and exchange rates for you.

Here is one last tip to get started with international money transfers. If you’re planning travel or a move, get set up with your preferred services today, including their apps and cards.

Setting up an account with an international transfer service takes about half an hour, including connecting to your bank accounts. You may need 1 to 3 weeks to receive cards linked to your transfer service.

These cards function like debit cards, giving you immediate access to your money at ATMs and for purchases.

Give yourself enough time to get and test your cards before your departure. Then you can be confident that you’re fully equipped to access your funds any time, anywhere.