How to Send Cash Overseas and Avoid Fees and Exchange Rates

We live in a global world where our income or expenses are not always limited to our country. In fact, most people do more international transactions than they spend money in their country.

However, international transactions or sending money overseas come with a lot of fees and unfavorable exchange rates.

So, you eventually end up losing a lot of money in order to pay banks to process your transaction. Your fees which could be fixed or a certain percentage (depending on the bank) can take away a significant portion of the money sent.

That’s why it doesn’t make sense to send a small amount of money overseas, since the fees will go as high or even higher than the amount you want to send.

But can you away these fees and expensive exchange rates? – Sadly, no. Fees have to be paid in order for banks or any other financial institution to process your payment.

However, you can definitely lower your fees, or get favorable exchange rates, which will help you save money on each international transaction. 

How? – Let’s find out.

Things to Consider When Sending Money Abroad

Your fees depend on many different factors, which is why we cannot highlight how high they will be. Therefore, there are a few things to consider before sending money internationally, such as:

• Are you transferring to another currency?
• What are the exchange rates between those currencies?
• Are you sending a small or large sum of money?
• Is it a recurring payment or a once-off payment?

Why Banks Are Not a Great Option?

Most people choose wire transfers when making payments overseas that need to be processed by banks. Banks are reliable institutions and they will usually charge you more money for processing your fee in exchange for some safety.

In other words, people prefer to pay a little extra just so they know that their money is safe.

However, banks often have poor exchange rates and many hidden fees that you cannot even understand. These depend on where you send the money, the currency you are exchanging, and a couple of more things.

But if you still want to send money through a bank, here are some things you should ask the bank before sending the money:

• What fees do you have to pay for an (X) amount of money sent to (X) country?
• Will the recipient bank also require the person to pay additional fees?
• What is their current exchange rate (and it doesn’t hurt to as to get a favorable exchange rate)

Multi-Currency Account

One way to avoid such large fees is by using a multi-currency account. This account can be opened in your local bank, or through online financial platforms like Genome. 

This is a platform that allows you to store multiple currencies on the same account, which usually means lower fees for international transactions and favorable currency exchange rates. So, if you are someone making multiple overseas transactions every month, it is probably a good idea to learn about Genome here.

Plus, if you are making recurring payments, having a multi-currency account is a real life saver, just because you’ll be able to access your portfolio, exchange between currencies, and send money with lower fees.

Additionally, muti-currency accounts are perfect for businesses that want to expand globally. It makes payments much easier, and they can save a lot of money on currency exchanges.

Alternative Methods for Sending Money Overseas

But what if you don’t want to go through banks in order to make an international payment? Well, there are a couple of other options that allow you to send money without even having an account.

TransferWise

Two Estonians, Taavet Hinrikus and Kristo Käärmann, who work and reside in London, were so frustrated with the hassle of monthly currency transfers that they came up with TransferWise.

The tale of TransferWise Taavet resided in London but worked for Skype in Estonia, where she was paid in euros. Kristo had a mortgage in euros back in Estonia, but he worked in London. They came up with a basic plan. To determine a fair exchange rate, the couple looked up the current day’s mid-market rate on Reuters once a month. 

When it comes to their fees – we already established that nothing is free. You do have to pay a fee for processing the payment, but TransferWise has been proven to be 8 times cheaper than traditional banks.

Final Words

So, there is no way to avoid fees when sending money overseas, but you can definitely save a lot of money by managing the process carefully. There are different methods that work best for different scenarios.

One that works for me, might not be a good option for you since you are sending different amounts of money and to a different country.

So, do some research on which is the best option for you, but if you are frequently making international payments, having a multi-currency account is the best way to start.