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What is the cheapest way to send money abroad?

The cheapest way to send money abroad will depend on how much you are sending, where to, and in which currency. International payment charges can be broken down into the following components:

  1. UK transfer charges
  2. Exchange rate
  3. Overseas bank charges

1. UK transfer charges

These are most important for small transfers, say under £1,000. For these values, the exchange rate makes less of a difference, and so the charge made by your currency broker or bank, is key. Banks charge anything up to £40 to make an international payment, but a currency broker may do it with no charge at all.

 

2. Exchange rate

Exchange rates vary between the worst "tourist" rate available, and the "mid-market" rate published on websites and in the papers. There is around 5% difference between these rates, and anything in between is called a "commercial" exchange rate.

 

Banks will usually give you a commercial exchange rate for an international payment above a certain amount, but it might be only slightly better than the tourist rate. By using a currency broker, you should be able to get a better commercial rate, much nearer to the mid-market rate itself. This could save you thousands of pounds in one transaction!

 

Unfortunately, it is never possible to actually buy currency at the mid-market rate, since it is an average of all the buying and selling prices in the world currency exchange system at any one time. Even banks dealing in hundreds of millions of pounds, do not actually use the mid-market rate as an executable price. To be within 1-2% of the mid-market rate is a good competitve rate, depending on the amount and the currency.

 

If you would like a quote on your own transaction, you can fill in your details at the top of the page and we will put you in touch with an FSA-regulated UK currency company who will provide you with a competitive exchange rate cost with no obligation.

 

3. Overseas bank charges

When sending money to some countries, a local bank charge of around £20 equivalent will be levied to process and credit your transaction to the local bank. In some cases the charge will be made by a third "routing" bank which routes the money from the UK to the final recipient bank. There is not much you can to to predict or avoid these charges, although in the Eurozone you can use a SEPA payment to guarantee no charges at the receiving end.