Instead of using an online money transfer service, they meet with a banking representative and agree to exorbitant commissions and fees. Most of the time they do this because it’s familiar: They’ve always trusted their bank and have used them for years — why should they change?
Actually, the banks aren’t specialists in currency exchange, and are often charging customers more than they can afford. Keep reading to learn why you should skip the bank and use online money transfers when living abroad.
You get the best exchange rate for your money
If you’re exchanging money through your bank, you’re probably not getting the best deal on exchange rates as you would through specific money transfer services. Your bank offers many products and services, and might not be as focused on international exchange rates as you would like.
Further, your bank’s currency exchange might be outdated, or they could set their own buy and sell offers around them. Most institutions follow the Interbank rate, and then base their own exchanges around it.
You may see a difference of up to five percent that the bank is pocketing. Instead, money transfer companies work to find the best exchange rates possible.
You pay a flat fee instead of a percent of total
Most banks charge customers a small percentage of the international money transfer as a fee for the services. They can charge as much as three to five percent and label it a “processing fee” for exchanging and transferring money.
These small fees might not seem like much, but they add up. If you have to pull an extra five percent out of your pay cheque every month, you could be losing thousands annually. This is especially important for those travelling and living off their retirement or student loans.
You already have to stretch your funds, so why are you giving so much away to your bank?
Instead, look for international money transfers that only charge flat fees on your transaction. Not only will this help you budget your expenses for the month (and year), but it will also save you money.
For example, CurrencyFair only charges a 3 EUR fee on any transfer. If you transfer 3,000 EUR per month for a year, you will only pay 36 EUR in fees.
If you went through a bank that charged four percent per transaction, you would spend 1,440 EUR in fees over the course of a year.
If you’re balancing a life between your home country and your current adventure, don’t let your money get lost in between. There are plenty of organisations looking to skim fees and commissions off the top, so opt for a reliable money transfer service instead.