Sending Money Overseas

There are several different ways to send money overseas, each with different features and costs.

The best method of sending money overseas will depend on how much you need to send, how often you need to send it, and how soon you need it to get there.

You should always check with whoever is receiving the money (the recipient), as some of the options available may not be suitable for them.

When sending money overseas both you (the sender) and the recipient will usually be charged various fees. The amount of money left for the recipient will depend on these fees as well as the exchange rate.

Exchange rates change every day so it is not always easy to compare providers, but if you do, make sure you do it on the day that you plan to send money. Always check both the fees and the exchange rate, as some places will charge lower fees but offer a worse exchange rate.

MAINSTREAM OPERATORS:

1. Credit or debit cards
For many people, this is the easiest and cheapest way to pay for things overseas, but check the fees you will have to pay. You pay off the balance each month (with credit cards) or it comes straight out of your account (with debit cards).

2. Prepaid cards
With a prepaid card you load up the card with money and can only spend what you have loaded up. To load a card you can usually transfer funds from a bank account, either at a bank branch or online, or put cash on to the card at post offices and through bill-payment facilities available in stores and newsagents.

Prepaid cards are available in selected shops in the UK or can be ordered online. They are usually accepted at cash machines all over the world for withdrawing money or for spending in shops in the same way as a credit or debit card. You can give or send the card to the person overseas to use, and you can top up the card whenever necessary.

3. Bank and building society services
Most banks and building societies offer money transfer services, but in most cases you must either: apply for; or already have an account with them. Banks and building societies will normally offer a standard transfer or an express transfer service. The express transfer will usually be slightly more expensive but the money should reach the recipient more quickly.

To make these transfers you will need the details of the bank overseas and the account name and number of the person you are sending it to. In most cases this will be the IBAN (International Bank Account Number). Your bank or building society will be able to tell you what your IBAN is and the person you are sending money to overseas will be able to confirm their IBAN details with you. An IBAN includes a BIC (Bank Identified Code).

You can send UK cheques overseas, but this is likely to be both slow and very expensive because you will have to pay foreign bank charges (and possibly UK bank handling charges). A number of banks allow you to transfer money to linked banks overseas without a fee. If both you and the recepient open accounts with linked banks, you can move money between your accounts with little or no charges. This is best for regular payments of money to people who stay in one country.

A number of banks and building societies have arrangements that allow you to send money without a fee at reasonable exchange rates. However, both the UK account and the one in the country you are sending to need to be in your name, so this may only be useful if you have a second home abroad and need to pay bills.

OTHER OPERATORS:

1. Money transfer operators
These are companies that only offer money transfer services, usually through agents, and you do not generally have to open an account with them. You can either go into an agent (often located in newsagents, post offices and banks) or pay the money online.

The recipient will need an ID or reference number (which you would tell them) to enable them to pick up the money at the other end. You should never give the ID or reference details required to anyone but the recipient.

These services are fast but can be expensive, and you will also need to check that the recipient is able to get to a branch or agency to collect the money.

2. Online money transfer services / internet money transfers
You can send money over the internet through secure online services, often for a very small fee. You will need to have a bank account or credit card and either have access to the internet or have an email address in order to transfer money. You will also have to register your details online.

The recipient may also need a bank account and access to the internet or an email address. These are generally suitable for non-urgent transfers of smaller amounts of money.

3. Foreign exchange (FX) brokers
When transferring larger amounts of money, for example if buying a property, it may often be cheaper to use a reputable currency broker. In most cases, you will have to open an account with the company you intend to use and you will need to fund the account using a bank account.

They may offer good exchange rates for large sums of money (in the thousands) and most do not charge fees. You can make specific arrangements for your individual needs such as fixed exchange rates for a set period.
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