Author, Andy Brown
Finding a low-cost way to transfer your money from one currency to another can be tough. In this article, I will explain how you can find the cheapest way to make an international money transfer.
What’s the cheapest way to transfer money internationally?
The cheapest way to make an international money transfer is to find a company with the best exchange rates and lowest fees.
Comparing exchange rates can help you carry out an international money transfer as cheaply as possible.
Exchange rates are usually the most costly part of international money transfers and can differ significantly between companies.
You can save money by comparing multiple quotes.
The currency exchange market also changes every few seconds.
Therefore, the timing of your transfer can help make a transfer cheaper.
It can pay to use a money transfer specialist who can talk you through your transfer and discuss exchange rates and currency market trends.
Which money transfer company gives the best rates?
Generally speaking, the cheapest way to make a large international transfer is by using a currency broker.
Key Currency offers some of the best exchange rates on the market and specialise in large international money transfers.
However, many people instinctively look first to high street banks for their large money transfers.
I would advise against this because they’re unlikely to be cost-effective.
Banks typically have large margins of around 3%-4% on their exchange rates.
For example, if you were to transfer £100,000, a 4% margin means the banks take £4,000 from your transfer.
As a rule of thumb, the costs from a currency broker are likely to be far lower.
Currency brokers don’t have the high costs of banks, which allows them to exchange money without hefty charges.
What are the costs of an international transfer?
Understanding the breakdown of international transfer costs will put you in a better position to find the cheapest international money transfer company.
There are two types of costs to your international money transfer:
- Exchange rates
- Transfer fees
The biggest cost from international transfers tends to be the exchange rate, particularly for larger sums.
When you research the rate on Google, this will show you the interbank rate.
Banks only use the interbank rate to trade between themselves.
While, unfortunately, this is unachievable for business and personal customers, it does give you a benchmark for your comparisons.
The closer you can get to the interbank rate, the better you’re doing!
All money transfer companies will have a margin on international transfers.
Without it, they wouldn’t be able to operate.
This is why the exchange rate you get will always differ ever so slightly from the rate you’ll find on Google.
Ultimately though, some charge much more than others.
Those that charge large margins, like the banks, rely on customers that don’t fully understand how exchange rates work.
Savvy customers who compare quotes against the interbank rate are often shocked by the large margins they change.
Once you understand the interbank exchange rate and exchange rate margins, you’ll be best placed to tell a good exchange rate from a bad one.
This is the key to saving money on your international transfers.
The banks, as well as some other international money transfer providers, also charge transfer fees.
Transfer fees are usually charged per transaction.
If you’re making transfers regularly, these can soon add up.
And bear in mind, these are on top of the exchange rate costs!
Why should you have to pay any fees?
If your bank or provider charges transfer fees, it’s usually a good sign that they will be expensive.
The good news is some currency brokers don’t charge transfer fees.
It’s another reason they’re often the cheapest option for international money transfers.
How to compare money transfer companies
It’s all well and good having the intention to compare exchange rates, but what is the best way to do it?
Some people might think comparison sites are a good option, but they add another layer of cost.
Comparison sites make money from the companies they suggest to you.
Because of this, they don’t always compare the entire market.
Most comparison sites will only compare quotes from companies they make money from, disregarding those that don’t pay them – even if they’re cheaper!
Although the additional costs are hidden, they have a knock-on effect on your transfer.
Why add the extra cost?
It only reduces your chances of getting the best exchange rate.
I suggest cutting out the comparison site middleman and going direct to a currency broker.
When you first get in touch, you’ll likely need to give a bit of context to your transfer.
It might just be the rough amount of money involved and how regularly you’ll need to transfer money. Both these factors could affect the exchange rate you receive.
Once you get a quote, make a note of the exchange rate offered.
If you get other quotes, it’s best to get them around the same time so that they’re directly comparable.
An initial comparison of quotes will give you an idea of which company is the cheapest.
You could also get a feel of how different money transfer companies operate and which will be best to help you.
If one company is significantly cheaper, you could create an account to save time when you’re ready to make the transfer.
About Key Currency
Key Currency is a UK-based currency broker that believes in giving you great exchange rates and helpful service.
Our head office is deliberately based out of the city to keep costs down and get you better exchange rates.
We also specialise in providing our clients with high-quality, one-to-one customer service.
You get your own personal currency representative to guide you through the process.
They can take the pressure off you and watch the rates all day long – so you don’t have to!
By taking the time to understand all the details of your transfer, they can discuss the best time for you to make the transfer.
You can even ask for rate alerts, so you’re notified when it moves in your favour.
You could save thousands by avoiding making the transfer at the wrong time.
There are no hidden transfer fees, unlike banks and many other brokers.
The rate you’re given is the rate you’ll get.
Key Currency is an FCA regulated Authorised Payment Institution (No. 753989), and all transfers are conducted through safeguarded client accounts.
We also have over 1,100 reviews on Trustpilot – with a 5-star rating.
Click below to get a quote and compare our exchange rates.