The best way to send money overseas will always depend on your individual circumstances. But, depending on the amount, some things remain constant… fees. In fact, fees may be more important than the currency conversion for lesser amounts.
So in the case of sending small amounts, avoid the fees! The currency conversion makes almost no tangible difference in the amount your recipient will receive. The fees will certainly make a big difference in the total cost to you as the sender.
A low fee is more important than getting a great exchange rate
Ultimately, this means finding the lowest cost provider of international money transfers. A great choice for this is Western Union, whether in-store through an Australia Post outlet or other trusted agent within the Western Union network, or online at www.westernunion.com. Alternatively, you could consider another non-bank currency company. Just know that many non-bank international payment providers have a minimum transfer amount.
Comparing the best fee vs best exchange rate
David and Sue both need to send less than $100 to relatives in New York.
David sends his money through Western Union. He has to pay a $10 fee and receives a rate of 0.7940. So his nephew receives US $79.40 and it’s cost David $10 to do it.
Sue uses her bank to pay through online banking. She pays $24 and receives a rate of 0.7851. Her nephew receives US $78.51 but it’s cost her $24 (or 24% of the transaction) in fees.
The exchange rate has made little difference to how much US dollars is sent overseas but the $14 difference in fees is much more important.
The cheapest way for small international money transfers
To send less than $100, the banks will cost you the most, while Western Union, Moneygram and Paypal may be your best options. They have low fixed fees and, since the conversion makes little difference on this amount, that cost is negligible.
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