Your 5 Best Options For Sending Money Abroad
If you need to send money to someone abroad but have never had to before, it can be difficult to determine what your best options are. In fact, you may not even know what your options are.
Fortunately, you’ll be glad to hear that there are a number of choices available before you, and each of those options work well even if some are faster or cheaper than others.
This article will dive into five best options for sending money abroad and the advantages and disadvantages that you can expect to encounter with each of them.
Here are your five best options for sending money abroad:
Your Bank
Your bank is probably what came to mind first when you thought about how you could send money overseas. But does this make it the best option?
Specifically, banks will send money internationally by using wire transfer. Wire transfers are usually slow and can take several business days to complete, but most banks will also offer an ‘express service’ option for speedier transactions, even though you’ll have to pay much higher fees as well.
One of the biggest hindrances to using a bank wire transfer is the cost. Banks usually charge flat fees, which can commonly be $50 or more for a single transaction. If you’re not sending a lot of money, that’s quite expensive.
FX Broker
The next option will be to use an FX, or foreign exchange, broker. An FX broker is a broker that specializes in foreign currency.
One of the biggest benefits to using an FX broker is that they can lock in an exchange rate, which can otherwise often fluctuate greatly. They also tend to offer superior exchange rates over banks.
On the other hand, FX brokers can also be expensive due to having high fees, and they can also sometimes have a minimum transfer amount to use, which means that they usually only a suitable choice for large transactions.
Remittance Services
Remittance services such as Remitly operate very simply: you create an account, deposit money, insert the name and financial information of your recipient, convert the deposit into your currency of choice, and then send it to the recipient.
Remittance services represent some of the cheapest and fastest ways for sending money overseas in this day and age, and you’ll definitely save money with them in contrast to using a bank.
Unlike banks, remittance services usually charge a small fee of 1% to 5% rather than a large flat fee. You can also quote remittance services to find out what kind of an exchange rate you’ll have to pay, and as long as you can get a low guaranteed exchange rate (which is more than possible), you’ll save money that way too.
P2P Money Transfer Operators
Another very cheap and fast way to send money to people overseas will be to use an online MTO (money transfer operator). MTO’s typically offer a wide variety of payment and delivery methods, and will have a lower exchange rates than most banks have.
In fact, several P2P MTO companies were founded after the Great Recession of 2008-2009 because of a large distrust that existed with banks at the time, and people turned to them as a cheaper alternatives.
At the same time, MTO’s are also usually a good choice for smaller transactions only. Some will have a maximum transfer amount, so if you need to send a lot of money at once they are rarely the best choice. If you do need to send a larger amount, banks or remittance services should be a better bet.
Blockchain
Last but certainly not least, you can also use blockchain technology to send money overseas as well. Even though blockchain may still be in its infancy right now, in the future, many experts that it will be the cheapest and fastest method for sending and receiving payments abroad.
Right now, however. Blockchain networks have limited market liquidity and are not yet fully developed in contrast to the other above options. Still, it’s definitely something that you’ll want to keep your eye on.
Sending Money Abroad
Overall, these five options represent the best choices you have available before you for sending money to people you know overseas. The method you choose should largely be dependent on whichever one will save you the most money and on the timeframe you need to send the money by.
