5 Cheaper Ways to Transfer Money Overseas

Using a bank is one of the easiest ways of transferring money overseas, but can also be the most costly. While it is convenient to send money overseas this way, there are alternatives that can make the whole process cheaper.

Sending money to an overseas bank account is full of hidden fees which can be confusing and hard to spot. At the end of this article you'll find some practical steps on how to transfer money overseas without paying too much.

But first, let's look at 5 cheaper alternatives to using a bank to make an international money transfer.

1. A Bank Transfer Minus the Bank

A bank transfer allows you to send foreign currency to another bank account overseas. But like we said, doing this directly from your bank can be expensive. There are Australian and international companies that specialise in doing exactly the same thing, except they do it with much lower fees and better exchange rates.

Some fee free alternatives in Australia include OFX and TorFX.

When and why it’s cheaper:

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

2. Peer to Peer Transfer (P2P)

P2P transfers work a little bit differently. Instead of wiring money overseas through a bank, companies that make these types of transfers match people buying currency in one country with people who are selling it in another.  TransferWise and CurrencyFair are two of the biggest companies that offer P2P transfers and send your money this way.

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. Which again makes the transfer cheaper. Win-win!

When and why it’s cheaper:

P2P transfers are often a good option when you're transferring up to $10,000. They are usually very transparent which makes it easier to calculate the cost of your transfer. Sometimes, companies like this charge a percentage based fee. So you need to be careful of this if you're making large transfers because the cost can add up.

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

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

The more popular remitters include WorldRemit, Orbit Remit and InstaRem.

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 are usually much better. This is particularly true 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. Send Money Overseas Online

It doesn't matter which bank or company you use - it's almost always cheaper to send money overseas online when compared to doing it over the phone or in person.

Many companies like TransferWise only offer online ways to transfer your money overseas. It might seem inconvenient but it does mean that they can lower the overall cost of each transfer because they don't have to pay the costs of running a store.

When and why it’s cheaper:

In Australia, all four major banks charge a lot less for using internet banking to transfer money overseas. This is compared to going into one of their branches. This is largely because it costs a lot less for the banks to transfer money online than in person. You should still compare your options for transferring money online, before deciding to use your bank.

5. Bitcoin

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

When and why it’s cheaper:

Bitcoin can be cheap and fast for most transfer sizes. You just need to make sure you and your recipient are comfortable using digital currency. Also remember, that there can be more risk using a cryptocurrency than the other options we have discussed.

How to transfer money overseas without paying too much

  1. Comparing your options - it's the first and most important thing to do if you want to avoid massive hidden fees. Make sure you know what exchange rate you'll get and what fees are involved.
  2. Next, make sure you have some ID and the bank account details of where you want the money to be transferred to.
  3. Depending on which bank or company you use, either call them or log in to their website to make the transfer. At this point, they will confirm the total cost of the transfer.
  4. If you aren't using your bank, you'll need to pay for your transfer by credit card or bank transfer.
  5. You might want to consider sending an email to the person you are paying to let them know the money is on the way. It should take 1-3 business days depending on how you've done it. But this can vary from company to company.
Money transfers shouldn't cost the earth. Find the Best Deal here.

The best deal for you

TransferwiseRead ReviewTotal (AUD)$13,690.51Exchange Rate0.7338Transfer Fees$62.82Transfer Time1-2 DaysLearn MoreTotal (AUD)$13,690.51Rate Updated 05:14PM 18/11/2018GO TO SITE
So, sending USD 10,000 to United States at an exchange rate of 0.7338 will cost you $13,690.51 which includes a fee of $62.82

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

More trusted money transfer options

Provider Exchange Rate Transfer Fees Transfer TimeTotal (AUD) Rate Updated 05:14PM 18/11/2018
TorFXRead ReviewTotal (AUD)$13,696.17$5.66 more expensive Exchange Rate0.7301 Transfer Fees$0.00 Transfer Time2-3 DaysGet discounted rate $13,696.17$5.66 more expensive GO TO SITE
So, sending USD 10,000 to United States at an exchange rate of 0.7301 will cost you $13,696.17 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
XERead ReviewTotal (AUD)$13,707.19$16.68 more expensive Exchange Rate0.7295 Transfer Fees$0.00 Transfer Time2-3 DaysGet discounted rate $13,707.19$16.68 more expensive GO TO SITE
So, sending USD 10,000 to United States at an exchange rate of 0.7295 will cost you $13,707.19 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.
WorldFirstRead ReviewTotal (AUD)$13,709.95$19.44 more expensive Exchange Rate0.7294 Transfer Fees$0.00 Transfer Time2-3 DaysGet discounted rate $13,709.95$19.44 more expensive GO TO SITE
So, sending USD 10,000 to United States at an exchange rate of 0.7294 will cost you $13,709.95 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
HIFXRead ReviewTotal (AUD)$13,709.95$19.44 more expensive Exchange Rate0.7294 Transfer Fees$0.00 Transfer Time2-3 DaysGet discounted rate $13,709.95$19.44 more expensive GO TO SITE
So, sending USD 10,000 to United States at an exchange rate of 0.7294 will cost you $13,709.95 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
WorldRemitRead ReviewTotal (AUD)$13,779.61$89.10 more expensive Exchange Rate0.7259 Transfer Fees$3.99 Transfer Time1-2 DaysGet discounted rate $13,779.61$89.10 more expensive GO TO SITE
So, sending USD 10,000 to United States at an exchange rate of 0.7259 will cost you $13,779.61 which includes a fee of $3.99

About WorldRemit

WorldRemit are particularly good for transfers under $10,000 to destinations across Asia, Africa and South America. Sending money online is significantly easier than using companies like Western Union or Moneygram and their exchange rates and fees are clear and transparent. With 2 million users, WorldRemit has a focus on improving access to remittances for the billions people worldwide who don’t have access to banking. Because of this, WorldRemit has a number of ways to both make and receive transfers. They concentrate on servicing individual needs as opposed to businesses. Click here for the full review

Pros

  • They have a great network in Asia and Africa and number of receiving options like cash-pick up or bank transfer.
  • They are clear about their exchange rates and fees
  • No minimum amount

Cons

  • Maximum transfer sizes for every transfer
  • No support for business customers
  • They are not licensed to provide financial advice.
OFXRead ReviewTotal (AUD)$13,892.75$202.24 more expensive Exchange Rate0.7198 Transfer Fees$0.00 Transfer Time1-3 DaysGet discounted rate $13,892.75$202.24 more expensive GO TO SITE
So, sending USD 10,000 to United States at an exchange rate of 0.7198 will cost you $13,892.75 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 ReviewTotal (AUD)$14,226.77$536.26 more expensive Exchange Rate0.7029 Transfer Fees$0.00 Transfer Time1-2 DaysGet discounted rate $14,226.77$536.26 more expensive GO TO SITE
So, sending USD 10,000 to United States at an exchange rate of 0.7029 will cost you $14,226.77 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 ReviewTotal (AUD)$14,448.26$757.75 more expensive Exchange Rate0.6927 Transfer Fees$12.00 Transfer Time1-2 DaysGet discounted rate $14,448.26$757.75 more expensive GO TO SITE
So, sending USD 10,000 to United States at an exchange rate of 0.6927 will cost you $14,448.26 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