Sending money to friends and family overseas this Christmas? Currency specialists such as HiFX can help you avoid getting hit financially by hidden charges and poor exchange rates
Christmas is a time when thoughts turn to friends and family, including those living overseas. But when it comes to gifts, things get a little tricky when the recipients live on the other side of the world.
Sending money abroad may sound like the simplest option, but if you don’t plan carefully you could end up throwing money away. You won’t spread as much seasonal cheer if a large chunk of the money you send is swallowed by hidden charges and poor exchange rates.
Think twice before sending money through your bank, because it might be all too happy to play Scrooge this Christmas. Some will hit you with one-off transaction charges of up to £30 on overseas transfers, but the real damage is far harder to see.
What many people don’t realise when sending money overseas is that banks are free to set their own exchange rates. These may be a long way from the ‘interbank’ rate (the rate at which banks buy and sell currency to each other). And while the currency markets can move very quickly – particularly during the current economic uncertainty – the banks may choose not to update their rates to reflect this. This allows banks to make juicy profit margins on their rates, and is the hidden cost of sending money overseas.
One increasingly popular option is to use an international money transfer service, such as HiFX.
The best foreign currency services should be far cheaper than your bank because they offer much more competitive exchange rates. Better still, depending on the amount you’re sending, you’ll also benefit from lower fees.
Still not convinced? Ask your bank how much local currency your recipient will receive after the bank’s exchange rate has been applied. Then get a quote from an international money transfer service to see if it can offer a more generous deal. Check both rates as close together as possible, as exchange rates are constantly fluctuating. You may be surprised by how much you save – especially when transferring larger sums. Hefty charges are bad enough when sending small amounts of money overseas, but on larger sums they can cost you even more. For example, somebody transferring £10,000 into euros could have received an extra €261 from HiFX compared to making the same transaction via a high street bank, as shown in the chart below.
Sending money through an international foreign exchange service is quick and convenient. The best international money transfer services allow you to send money from your personal current account easily and securely at competitive exchange rates. They also allow you to transfer money quickly; either online or over the phone, 24 hours a day, seven days a week. Some, like HiFX, provide additional tools such as recipient notifications and customisable rate alerts to help you make your money go further.