Using a bank is one of the easiest ways of transferring money overseas, but can also be the most costly.

At the end of the article you will find a video discussing the 3 safest and cheapest ways to transfer money overseas.

But first, here are 5 cheaper alternatives:

1. A Bank Transfer Minus the Bank

A bank transfer allows you to send money from your account in Australia to another bank account overseas. There are Australian and international companies that specialise in doing exactly the same thing, except with much lower fees and better exchange rates.

Some alternatives in Australia include XE Money Transfers and OFX

When and why it’s cheaper:

If you are sending more than $1000, ‘non-bank’ money transfer companies are cheaper because their fees are lower and their exchange rates are more competitive. Transfer fees vary between $0-$15 for small amounts. Most companies offer fee free transfers for amounts over $10,000.

2. Peer to Peer Transfer (P2P)

TransferWise and CurrencyFair are the 2 biggest companies that offer P2P transfers. Instead of going through a bank, they match people buying currency in one country with people in other countries who are selling currency.
Often a P2P transfer can be quicker because there are less banks involved. It can also reduce or eliminate a common hidden fee called a correspondent bank fee.

When and why it’s cheaper:

If you are sending more than $1000, ‘non-bank’ money transfer companies are cheaper because their fees are lower and their exchange rates are more competitive. Transfer fees vary between $0-$15 for small amounts. Most companies offer fee free transfers for amounts over $10,000.

3. Money Remitters (for smaller amounts under $2000)

 According to the World Bank, international remittances totalled 585 billion dollars in 2017. The cost of these transfers is coming down, largely thanks to increased competition from money remitters.

The more popular remitters include WorldRemit, Orbit Remit and InstaRem

https://www.thecurrencyshop.com.au/wp-content/uploads/2018/03/5a17929f9ee0f.png

When and why it’s cheaper:

Money remitters specialise in smaller payments. They can be a much cheaper option for transfers under $2000, because their fee structure and exchange rates, particularly to less common destinations in Asia, Africa and South America. Unlike companies like TorFX or OFX, these companies rarely have a minimum transfer amount.

See: WorldRemit Review

4. Paypal

Yes – Paypal. When you use Paypal to send money overseas, the currency conversion rates aren’t great, but the fees are almost non-existent. It’s also super quick when the person you are paying already has a Paypal account.

When and why it’s cheaper:

If you are paying someone under $1000, like an overseas freelancer, Paypal is cheaper than using a bank. This is because they don’t charge a bank transfer fee, which can range between $18 and $32

5. Bitcoin

You can use Bitcoin to send money overseas, but be aware that it can be quite complicated, particularly if you are not familiar with using a digital currency. You’ll have to set up a wallet with a Bitcoin company, like Coinjar, then fund your online wallet with Australian dollars, convert it to Bitcoin and send it to the person you are paying overseas. They also need to have a Bitcoin wallet and will then convert it to their local currency.

When and why it’s cheaper:

If you are paying someone under $1000, like an overseas freelancer, Paypal is cheaper than using a bank. This is because they don’t charge a bank transfer fee, which can range between $18 and $32

Find the Cheapest Way to Transfer Money Overseas

Compare The Total Cost

The total cost of the transfer comes down to 2 things:

Money transfer fees

1. Transfer Fees

Every Australian bank and money transfer company will charge you a different fee to send money overseas. Usually it’s between $10 and $32.

Exchange rate margin fees

2. Exchange Rate Margin

There is no “standard” exchange rate. Each bank will offer you a different exchange rate based on the currency you want to send overseas and the amount you need to send.

Provider Exchange
Rate
Transfer
Fee
Transfer
Time
Total (AUD) Rates last updated August 15 2018
XERead Review 0.7209 $0.00 2-3 Days $13,871.28Lowest Cost Option Go to site Read Review
So, sending USD 10,000 to United States at an exchange rate of 0.7209 will cost you $13,871.28 with no fees.

About XE

XE is a well known and trusted name in the money transfer industry. With over twenty years experience, they now help 33,000 people and 2,000 businesses make transfers each year. Over 60 currencies can be transferred with XE and they pride themselves on the free tools and transparent rates they offer. Click here to read the full review

Pros

  • Well known and trusted brand.
  • Very informative website. Extensive information on currency and money transfers.
  • XE App is available on both iOS and Android. It allows you to see the interbank rate for over 100 currencies.
  • XE themselves charge no fees for international money transfers.
  • Offers support for both individuals and businesses when it comes to international money transfers.

Cons

  • Cannot pay via cash or cheque. Must pay via bank transfer, BPay is also accepted in Australia.
  • Maximum transfer amount is $500,000USD.
  • While XE compares more than 100 currencies, there are only 60 that are available for money transfers.

TransferwiseRead Review 0.7241 $63.65 1-2 Days $13,873.90$2.62 more expensive Go to site Read Review
So, sending USD 10,000 to United States at an exchange rate of 0.7241 will cost you $13,873.90 which includes a fee of $63.65

About TransferWise

Transparency and an easy online experience are the 2 things that set TransferWise apart from the banks and other money transfer companies. If you prefer to bank online, you'll like TransferWise. Setting up an account and making a transfer is very easy. They are also very clear on the exchange rate and fees you'll pay before you make a transfer. Click here for the full review

Pros

  • Clear and transparent exchange rates fees
  • The online experience is first class
  • Like the banks, they are regulated by ASIC and registered with AFSL
  • Constantly bringing out new innovative products

Cons

  • There are currently a number of global currencies they do not currently support
  • Limited support based in Australia
  • Percentage based fee can add up on very large transfers

WorldFirstRead Review 0.7198 $0.00 2-3 Days $13,893.61$22.33 more expensive Go to site Read Review
So, sending USD 10,000 to United States at an exchange rate of 0.7198 will cost you $13,893.61 with no fees.

About World First

World First was founded in 2004 in the UK and has grown rapidly with offices now in the U.S., Canada and throughout Asia. They consistently receive strong customer reviews and in a recent study, 98% of their clients said they would use them again.World First have a strong online offering, particular for businesses selling online. They do provide local support as well with offices in Sydney. Click here to read the full review

Pros

  • Low fees and great exchange rates
  • Safe and secure transfers
  • Regulated by ASIC and registered with AFSL
  • Great for personal and business payments

Cons

  • Does not accept BPAY, credit card, cheque or cash
  • Limited currencies available

TorFXRead Review 0.7198 $0.00 2-3 Days $13,893.61$22.33 more expensive Go to site Read Review
So, sending USD 10,000 to United States at an exchange rate of 0.7198 will cost you $13,893.61 with no fees.

About TorFX

TorFX are particularly good taking care of customers over the phone but using their website isn't the easiest to use. They don't charge a flat fee which is great but it's important to consider their exchange rates. While, they don't offer fantastic rates for small amounts under $2000 , TorFX offer exceptionally good exchange rates for larger transfers to the UK, New Zealand, South Africa and Europe.

Pros

  • No transfer fees
  • Highly competitive exchange rates
  • Secure transfers with authorised
  • Assigned account manager
  • 24 / 7 Assistance
  • Available range of transfer options

Cons

  • Limited exotic currencies available
  • Exchange rates on small transfers aren't great
  • Website experience could be better

HIFXRead Review 0.7198 $0.00 2-3 Days $13,893.61$22.33 more expensive Go to site Read Review
So, sending USD 10,000 to United States at an exchange rate of 0.7198 will cost you $13,893.61 with no fees.

About HiFX

HiFX are one of the biggest money transfer companies in the world. Their parent company Euronet is listed on the NASDAQ and recently acquired Xe.com. They are particularly useful for individuals doing regular transfers overseas. HiFX provide competitive exchange rates no matter how much is being transacted. Their $50 minimum transaction size and flat fee makes them a great option for any international payment. Locally, HiFX have Australian offices in Sydney, Melbourne and are expanding to the remaining capital cities. Click here to read the full review

Pros

  • Fantastic bank - beating exchange rates
  • Low fees for transactions less than $10, 000
  • No fees for transactions of $10, 000 or more
  • High security transfers regulated by ASIC and FMA
  • Fast and easy for personal or business accounts

Cons

  • Only electronic bank transfers accepted
  • Limited exotic currencies
OFXRead Review 0.7145 $0.00 1-3 Days $13,995.80$124.52 more expensive Go to site Read Review
So, sending USD 10,000 to United States at an exchange rate of 0.7145 will cost you $13,995.80 with no fees.

About OFX

OFX (formally known as Ozforex) is the largest Australian owned money transfer company. It launched in 1998 and grew rapidly until finally listing on the Australian Stock Exchange in 2013. OFX excels in 2 areas – Online experience and customer service. The company was born online and continues to develop easy, intuitive products. While OFX customers do most of their transactions online, they are backed up with exceptional customer service.

Pros

  • Better exchange rates compared to banks
  • Highly safe and secure transfers
  • 1 - 2 days delivery times for most countries
  • Quick response time
  • Fantastic customer service

Cons

  • Credit cards, cheques and cash are not accepted
  • Transfers to Thailand can take up to 4 days
  • Fees for transfers smaller transfers

ANZRead Review 0.7108 $0.00 1-2 Days $14,068.66$197.38 more expensive Go to site Read Review
So, sending USD 10,000 to United States at an exchange rate of 0.7108 will cost you $14,068.66 with no fees.
ANZ International Money Transfer is a secure and fast way to transfer money overseas.

Pros:

  • Fast transfers
  • Safe and secure
  • No fee for transfers under $10 000 via Internet banking

Cons

  • $12 fee for transfers under $10 000 via Internet banking
  • Poor exchange rates
  • 24 hour hotline not available

Commonwealth BankRead Review 0.6977 $12.00 1-2 Days $14,344.81$473.53 more expensive Go to site Read Review
So, sending USD 10,000 to United States at an exchange rate of 0.6977 will cost you $14,344.81 which includes a fee of $12.00
Commonwealth Bank provides secure and easy transfers to over 200 countries and more than 30 currencies.

Pros:

  • Fast transfers+ Easy transfers
  • Security guarantee covers any losses from unauthorised transactions

Cons

  • $6 fee for transfers under $1000 via Internet banking
  • $12 fee for transfers under $1000 via Internet banking
  • Poor exchange rates

WestpacRead Review 0.6972 $10.00 1-2 Days $14,353.09$481.81 more expensive Go to site Read Review
So, sending USD 10,000 to United States at an exchange rate of 0.6972 will cost you $14,353.09 which includes a fee of $10.00
Westpac is one of the big four banks in Australia offers speedy and secure transfers.

Pros:

  • Fast payment processing times
  • Secure transfers

Cons

  • Must be Westpac account holder
  • $20 fee for transfers via Internet or phone banking
  • $32 fee for transfers at an ANZ branch
  • Poor exchange rates

VIDEO: Cheaper Ways to Transfer Money Overseas

 

In this video we discuss three of the safest ways to transfer money overseas, that can also help you save some money. We look at when you should use them and how they work so that you can make the best decision about the cheapest ways to send money overseas.

Helping You Save Money on Currency

Buying travel money or transferring money overseas can be expensive and confusing. So how do you make the best choice and get the most out of your money?

An easy way is to use a comparison table for either international money transfers or currency exchange. These tables list and compare the banks with other large foreign exchange companies.

We’ve also put together tons of helpful videosguides and reviews that will help you make the right decision. You can work out a cheaper way of converting currency while still keeping your money safe.