People need to make regular overseas money transfers for different reasons. While someone might want to send money to a family that resides in another country, someone else might need to make payments towards an overseas mortgage. There are numerous instances of people setting up regular transfers for business reasons as well. No matter what the reason, selecting a company to set up scheduled overseas transfer requires that you address different aspects.
Banks Vs. Overseas Money Transfer Companies
Several leading banks give their customers the ability to open accounts in foreign currencies, and you may use their services to schedule overseas fund transfers. However, most banks tend to fall behind specialist money transfer companies when it comes to exchange rates, fees, and speed. While using a bank for a one-off transfer might seem alright, the money you can save by using a specialist company can add up to a tidy sum over a period of time.
The main costs associated with setting up scheduled transfers include the fees you need to pay and the exchange rate that applies on your transfers. Some companies might charge additional fees for setting up scheduled transfers. If you wish to make an amendment to a transfer that you have already scheduled, you might need to pay an added fee. The receiving bank may also charge a fee, although this is beyond the control on the money transfer company you select.
Some of the top companies let you lock in exchange rates for up to two years in advance. This gives you the ability to make the most of favorable exchange rates, and can also help you tide over negative fluctuations in the market.
The transfer fee requires your attention because it varies from one service provider to the next. While the fee a company charges might not seem like much for a single transfer, make sure you calculate how much it will cost in the long run.
Consider this – Jim needs to pay an international supplier around $4,000 every month. He narrows down on two companies that provide equally competitive exchange rates and then looks at their fee structures. While company A charges a flat fee of $15 per transfer, company B charges 2% of the transfer amount. This means Jim will end up paying around $80 as transfer fees if he uses company B. In a year, using company A instead of company B results in savings of close to $800.
Benefits of Scheduling Overseas Money Transfers
People set up regular overseas money transfers for different reasons, and you may benefit by scheduling your transfers in more ways than one.
- Save time. If you set up scheduled transfers, you do not have to go through the entire process each time there is a need to carry out a transfer. All you need to do is make sure there are adequate funds in the account from which money for the transfers is to be debited.
- Fix exchange rates. A smart way to manage currency-related risks is to lock in exchange rates when they seem favorable. Most companies that let you set up regular transfers offer this feature.
- Little to no transfer fees. There are companies that let you circumvent paying transfer fees by setting up regular transfers. However, some have minimum transfer amount limits in place.
- Flexibility. There are companies that let you set up scheduled transfers according to your requirements. This means you can set up weekly, fortnightly, monthly, or even bi-monthly transfers.