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There is a perceived lack of information available for those wanting to send money abroad. Whether sending a 500 wire transfer or purchasing your dream villa in the South of France for 500,000, key savings can be made. Independent price comparison site www.sendmoneyhome.org  is here to help.

Lower End Transfers

Expensive advertising campaigns can often lead to understandably naive and costly consumer choices when selected a preferred Money Transfer Operator (MTO).

Western Union as a brand has dominated the market for a long time, providing a fast yet arguably costly method of transferring money back home. Given the world’s largest money transfer operator (MTO) can charge around 15 a time to send just 100 to the states and make strong profits when converting the cash, questions must be raised as to what the alternative options are. Often, a sense of disappointment is felt by the end amount that is received when transferring funds overseas. Customers do not feel they have enough information about money transfer products, providers, or ID requirements, and do not know where to look. They often rely on word of mouth.

The rule of thumb when transferring smaller amounts overseas is to send as much as you can as infrequently as possible; reducing the number of times you get hit with fees. There are several companies that operate globally, such as MoneyBookers, MoneyGram or iKobo, who also offer better rates than the big banks. These are anywhere between 50p and 8, again depending on the method of transfer and the country the money is being sent to.

When an expat wishes to transfer money abroad, the advice is simple: have a look around at the different options to drive down the price on both fees and exchange rates. Whether the transfer is for personal reasons or business reasons it certainly pays to shop around.

Comparison Sites.

It can prove to be difficult and time-consuming to explore the range of options and costs involved prior to transferring money. www.sendmoneyhome.org  and its sister site www.sendfundsoverseas.com  (for higher end comparisons) offers an independent and comprehensive money transfer comparison site that allows consumers access to a range of alternative products available when transferring money worldwide. The site was originally government backed and funded by the Department for International Development (DIFD), aimed at promoting transparency in the remittance industry. Visitors can compare services by speed, method of transfer, fees charged and exchange rates offered.

High End Transfers.

Getting into contact with a reputable FX broker rather than a high street bank will invariably lead to significant savings on higher end currency transfers. These firms are knowledgeable in the currency markets, take on a hand-held and personalised approach with the client, and can assist when transferring funds overseas through the range of services they offer. For example, they will let you fix the exchange rate (forward contract) to protect against any currency fluctuations or volatility. The buy now and pay later approach certainly has its advantages. According to Marc Bodega at HIFX, "The high-risk strategy would be to buy your currency when you needed it, but this means that you don't know what the property is going to cost. If you have strong views about future exchange rates, you could wait and buy your currency when you think the rate looks good. But there is no guarantee that the currency will move in the direction you want it to. If you want a risk-free option, fix the exchange rate. We always remind people that they would never agree to buy a property in Britain if they did not know the final cost."

For example, take the case of Mary Peacock who retired and is transferring her pension regularly into Euros while living in the Costa Del Sol. Mary was able to fix her exchange rate for up to 2 years and is guaranteed a fixed amount of income per month in Euros at the pre-determined rate. She comments, ‘‘this is a wonderful facility that lets me budget effectively and takes away all the aggravation of calling the bank manager in the UK.’’

Brokers also offer better currency exchange rates than high street banks as they purchase currency in bulk. These savings are then passed on customers. Foreign exchange brokers will offer rates within around 1 per cent of the Interbank rate, though those rates constantly change, and a good deal from a specific broker often depends on the destination country. However, it should be mentioned that most of the currency specialists often have a minimum transfer amount and by and large do not deal in smaller transactions. It is important to check their credentials with HM Revenue & Customs, and try to get quotes from several brokers.

www.sendmoneyhome.org and www.sendfundsoverseas.com will take all the hassle out of the equation and source the most cost-effective deal, whatever the amount.

See also
International Money Transfer Comparison Site SendMoneyhome.org

Posted 24Oct09