Guides & FAQs

The world of foreign exchange can be a confusing place.
iCompareFX is here to help. Here is a list of guides and FAQs to help you make an informed decision when sending your hard earned money around the world.

Country Guides

Are you looking for information on how to send money to specific countries? Then these are the guides for you!

Currency Pairs

These guides will help you understand the intricacies of foreign currency pairs. Including historical information, what affects their movements, and how you can make the most out of your currency transfers.

General Guides

FAQs

What is Local Settlement?

When you carry out an overseas money transfer you need to pay for it in one way or another. When your payment reaches a bank account operated in the same currency, it is referred to as a local settlement.

Consider this – you need to send money from Australia to the UK. If you pay for your transfer in Australian dollars and the payment gets to a local bank account, it is settled locally. In this case, you do not have to pay an additional fee.

On the other hand, if you select a European money transfer company for the same transfer, there is a good chance that your payment will get to a European bank account. This, in turn, might attract additional conversion or transfer costs.

Some of the leading money transfer companies offer local settlement in various currencies such as USD, CAD, GBP, EUR, and AUD, giving you means to save some money when carrying out your transfer.

Can I transfer money if the recipient does not have a bank account?

If the person you wish to send money to does not have a bank account, you may use the services of money transfer companies that operate out of physical locations or ones that have agent networks. Some of your options include WorldRemit, Azimo, Ria, Western Union, and MoneyGram. Transfers carried out to cash pickup centers tend to process on the same day, and in some cases they go through almost immediately.

Depending on where the recipient lives, you may get the transferred money sent to the recipient’s home. For instance, Azimo offers home delivery of money in the Philippines.

You may top off mobile wallets and mobile airtime of different countries through companies such as WorldRemit and Azimo. These transfers usually go through straight away.

Is it cheaper to go with a bank or an international money exchange agency?

Specialist overseas money transfer companies are usually more cost effective than banks. This is because of the highly competitive exchange rates they offer as well as the little to no fees they charge.

Using the services of a bank may be more beneficial if you and the recipient have accounts with the same bank, and the bank does not charge fees for cross-border transfers carried out between accounts held in different countries. You may, for instance, transfer money through your U.S.-based Citibank account to a Citibank account in India without having to pay any transfer fees.

What is a spot deal?

A spot deal refers to a money transfer that is carried out as soon as requested. Spot deals are the most common kind of cross-border money transfers and are best suited for individuals and businesses that need to carry out transfers quickly. If your payment for a spot transfer is received on the day you initiate the transfer, the money can get to the recipient on the same day or by the next working day.

Spot deals attract spot rates, which basically refer to prevailing rates offered by different companies. Spot transfers are the least complicated way to send money overseas, where you do not have to worry about fluctuations in the currency exchange market. Spot transfers are also referred to as market orders.

What is a limit order?

A limit order gives you the ability to buy or sell currency upon the fulfillment of particular conditions mentioned in the original trade instructions. You may place a limit order to buy below or sell above the market price when it reaches a specific point. Until this happens, the trade does not take place.

Consider this – USD/EUR is currently trading at 0.8601. However, you want to trade only if it gets to 0.87. One option is to continually track the exchange rate on your own and the other is to setup up a limit order at 0.87. Once the exchange rate reaches the predetermined mark, your trade is executed automatically.

What is a SWIFT/BIC code?

The International Organization for Standardization (ISO) has defined a standard format of Bank Identifier Codes (BICs) to be used as unique identification codes by financial and non-financial institutions globally. The ISO has designated the Society for Worldwide Interbank Financial Telecommunication (SWIFT) as the registration authority for BICs.

These codes are typically used to transfer money between banks, especially when it comes to carrying out cross-border wire transfers. They are also used for exchanging messages between banks.

A BIC is alphanumeric, and comes in the format AAAA BB CC DDD. “AAAA” denotes the bank, “BB” is the country code, “CC” refers to the location of the institution’s head office, and “DD” is an optional branch code.

One way to find a SWIFT code is to look for it on the bank’s account statement. Several online platforms also give you easy means to find SWIFT codes of banks from different parts of the world.

What is IBAN?

IBAN stands for International Bank Account Number. You would typically end up using one when making or receiving an international money transfer. An IBAN does not replace an account number. Instead, it works as an additional number that carries information used by international banks to correctly identify bank accounts.

This globally adapted system of identifying bank accounts was first adopted by the (ECBS), and then, as an international standard under ISO 13616:1997. The existing standard is ISO 13616:2007, which makes SWIFT the formal registrar. By February 2019, around 70 countries, mainly in Europe, the Caribbean, and the Middle East, were using the IBAN system.

An IBAN may consist of up to 34 alphanumeric characters. These include the country code, check digits, a bank account number, routing information, as well as a branch identifier.

What information do I need to do to set up a transfer with an overseas money transfer company?

The information you need depends on the payment and transfer methods you choose. To pay for your transfer you will need to provide your bank account, debit card, or credit card details, unless you plan to pay using another method.

To send money to an overseas bank account, you will need the recipient’s complete name, an account number or IBAN, the receiving bank’s name, and the receiving bank’s SWIFT code.

If you plan to send money to a cash pickup location, you will need the recipient’s complete name along with the location of a suitable cash pickup center.

What are interbank rates?

Interbank rates refer to the rates at which banks exchange currencies with each other. They may do this directly or through electronic brokering platforms such as The Electronic Broking Services (EBS) and Thomson Reuters. The interbank rate changes continually, depending on various factors.

Interbank rates are viewed as wholesale rates that banks use between themselves, and are typically unavailable to the general public at large. Banks and money transfer companies tend to add a “spread” to prevailing interbank rates when carrying out cross-border transfers, which is one way they make money.

Can I set up scheduled transfers that go out each month without me needing to do anything?

Several leading overseas money transfer companies give you the ability to set up scheduled transfers according to your needs. Some of your options include Currencies Direct, OFX, HiFX, and TorFX. Once you set up a scheduled transfer, the transfer will take place at the predetermined date, using prevailing exchange rates. Some companies even give you the option of locking in exchange rates for up to six months.