transfer money abroad

Best Way to Transfer Money Abroad

There are many reasons why you may need to transfer money internationally. Here are some tips on how to do this cost effectively and easily!

Investing is never simple. Good investment opportunities can be hard to find. It can take a heck of a lot of research to narrow them down. You should always conduct serious due diligence to properly assess investment risks of anything you plan to put your money in. Even the safest investment can still carry some r. For this reason, many simply lack the nerve to get into investing in the first place. Investing abroad though, carries a whole additional set of challenges. Some of these challenges are easier to navigate than others.

For instance, the simple logistics behind the process of moving investment money abroad can be difficult. Large money transfers can prove expensive especially if you don’t know how to find the best exchange rate for international payments.

In this post we will look at how you can save some valuable time and money when you transfer money abroad. This is especially handy for those looking to transfer money aboard to make investments

We will try to identify the best way to transfer money abroad for a reasonable price, as well as a cost effective way for large transfers internationally to a bank account.

Investing Abroad

Making an investment in a foreign currency can be both exciting and lucrative. The world is full of under-developed markets that somebody, somewhere, someday, is going to make a lot of money from. Whether you are looking towards investing in Singapore’s property market or renewable energy in Saudi Arabia, there are some big opportunities out there.

But it can be scary and full of risk.  This is especially true when you have to worry about the process to transfer money abroad. As well as the usual risks of investment, you also need to factor potential political instability and economic corruption. You may also want to consider cultural differences that may mean your surefire idea utterly flops. Further, sometimes foreign investors are treated as second class compared to domestic investors. In the worse case scenario, you should also be aware that foreigners’ assets may be “re-appropriated” if a governmental regime changes.

The Costs of Large Money Transfers

There is a lot of factors to consider when making large money transfers internationally. There are many potentially devastating costs involved transferring money to make your investment which you cannot overlook.  Whenever a bank handles an international transfer or a foreign currency transaction, they apply a handling fee. These financial institutions may also use their own forex rate which will not reflect the market. Instead, it will be a rate that benefits them at your expense.

Furthermore, both the senders and the recipients banks will be levying a fee. The fees they apply can sometimes effectively mean the bank is charging you a 3-5% markup on the transaction. This is certainly the case with most US and Western banks.

Transfer Money Abroad For Cheap

If you are looking to invest $100k, having to pay an additional $5k in fees can seriously affect your ROI. Thankfully, there are much more cost effective ways to send money abroad than by relying on the banks.

Ditch The Banks

To get the best deal on international payments, the best strategy is to avoid the banks altogether. Or, try as much as you possibly can to not use these traditional financial institutions. Thankfully, there are a number of options out there to facilitate the transfer of money abroad. A money transfer specialist or a currency broker can help you accomplish your goal.

Let’s look at each of these in a little more depth.

Wise – the Best Way to Transfer Money Abroad to a Bank Account

Initially founded as Transferwise, Wise is a rising star of London’s booming fin-tech sector. Their primary function is to facilitate low fee international money transfers. To this day, with a Wise account, an account holder can instantaneously send money almost anywhere in the world for minimal fees that are often 50-80% less than the ones the banks apply. 

The most seamless transaction occurs when you send money from one Wise account to another. But sending from your Wise account to the recipient’s regular bank account can still work out and be cost effective and easy. 

A Wise account also allows users to open multi-currency sub-accounts. Plus, the Wise bank card can be used for overseas card purchases and ATM withdrawals.

For this reason Wise is a great option for expats or foreign investors who need to pay living expenses when abroad such as mortgage payments.  In short, if you do business abroad then you should open a Wise account – especially as it is so easy to do.

Currency Brokers – to Get the Best Exchange Rate for International Payments

Currency brokers are another great way to transfer money abroad. Any investor preparing to make a large scale, foreign currency payment should think very carefully about the exchange rate being used for the transaction. When making a foreign investment, an investor needs to convert those dollars, pounds or euros into rupees or yuan before it can be paid to the recipient. As such, a third party is needed for the conversion. The default middle man here is of course the banks. But as we already mentioned, the rate banks use favors them over you. You should avoid using banks to transfer money aboard at all costs. 

Currency brokers on the other hand, specialize in high volume and large dollar value currency transactions. A currency broker can use its network and sheer scale to help an investor find the best possible exchange rate. As well as handling the currency exchange itself, most brokers also facilitate the payment to the recipients account too. You simply pay them the agreed amount in dollars or pounds and they do the rest. This creates a seamless, one touch service.

The added advantage of currency brokers is that they can also provide an advisory function and offer guidance on how and when to make the payment. This is helpful as they can help you time the market to realize the optimal value. This is a great benefit considering exchange rates are always on the move. Banks on the other hand, are not able to provide this kind of advice.

Best Ways to Transfer Money Aboard – Summary

There is no denying that investing abroad takes a lot of energy and effort. But at least you don’t need to worry too much about exchange rates, large money transfers, or how to send money abroad to a bank account. Now that you know how to transfer money abroad for cheap, you can spend more time searching for the perfect investment.

When you need to transfer money aboard, before you use a bank think about utilizing the services of a money transfer specialist like Wise or a currency broker. We wish you the very best of luck with your exciting international investment!

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