Transfer Money To South Africa: A Detailed Guide

Money transfer is important for many reasons. South African nationals residing in USA may often need to transfer money back home for investment purposes or to support loved ones.  Regardless of your reason or need to transfer money to South Africa, getting the rate during money exchange is necessary. An interesting point is that there are ways to avoid paying excessive banks charges and transfer fees.

 

Most times, online research is necessary to get the best rates available. You will be able to discover different alternatives and find a money transfer provider that best suit your needs.

 

In this guide, we picked out a few payment methods based on different situations. In a hurry? Our quick comparison table of exchange rates and fees will give you an overview of the best exchange rates and fees.

 

Transfer money to south africa

So What Are The Best Ways to Transfer Money to South Africa?

If You Are Moving from South Africa to USA 

All US banks allow money transfers to and from South Africa. However, not all of them accept South African Rands (ZAR). Also, many banks charge a high international money transfer fee and the best possible exchange rate is not always offered. 

 

An online money transfer service is one way to avoid these hefty fees and the choices are varied.

 

Providers that allow you to transfer money from USA to South Africa include OFX, HiFX, TorFX, Worldfirst, and Venstar.

 

Our Verdict:  OFX for great exchange rates on USD and ZAR transfers to South Africa. Particularly for payments under $10,000

To find out more about OFX, click here

 

Business Currency Transfers

If you constantly have to transfer money between USA and South Africa, 2 things are important for getting the best available options:

  1. The exchange rate margin – this is the difference between the wholesale exchange rate you can see on xe.com and the rate you get
  2. The business products they offer – like forward exchange contracts, foreign currency accounts and limit orders

 

Our Verdict: HIFX. Why? Their exchange rates and $0 fee structure will allow you to maximise your overseas receipts or payments. They also offer Foreign Currency Accounts which allow you to keep the funds in foreign currency and convert them when you feel the time is right.

To find out more about HiFX, click here

Also related: Foreign Currency Accounts: Explained & Compared — VIDEO

 

Buying a Property

If you are considering on getting a property in South Africa, search for an agent with a reputation and establishment both in the US and South Africa. This will give ease, support, and tractability you’ll be requiring before finally settling down.

 

Our Verdict: TorFX is an ideal choice for property settlement transfers. A local account manager will be appointed to guide you through each step. They are fully licensed in USA and also offer a global support network.

To find out more about TorFX, click here

 

Sending Money Home

Some transfer services, such as Western Union, are perfect for transferring small amounts. For example, sending a birthday present to a family member. While other providers will offer to waive transfer fees only if the amount is a large one.

 

That’s why it is critical to shop around and discuss your individual needs with a currency exchange and money transfer specialist.

 

Our Verdict: With the right foreign exchange specialist, such as OFX or TorFX it is possible to receive a spread of 1% – or even lower. And with fees reduced or removed.

 

Studying Overseas

With tuition fees continually escalating, it can all add up well over $50 000 a year, depending on the course and other expenses. For large payments, make sure you hunt down the best exchange rate. For smaller payments, look out for the transfer fee that is being charged. 

 

Our Verdict: Worldfirst. This is perfect for students and their parents paying the bills to save on large transfer costs.

 

Ways to Transfer Money to South Africa

The Costs of Sending Money between USA and South Africa

Computing the cost of your transfer can be complex. Depending on how you send the money, the fees, charges and margins aren’t always obvious. Here are the most common charges to transfer money from one bank account to another:

  1. A Transfer Fee – Also known as a TT, Telegraphic Transfer, Wire or Remittance fee
  2. Exchange Rate Margin – this is the difference between the wholesale exchange rate you find on xe.com and the rate you are offered.
  3. Correspondent Bank Fees – The fee your banks bank will take out for getting the money to the right account. It’s deducted from the amount that finally arrives in the account and is almost impossible to estimate or reverse
  4. Receiving Bank Fee– If you are paying foreign currency into an account, the receiving bank will charge you for it. For instance, if you send South African Rand to your US bank account, your US bank will charge you to convert it.

 

What are your options?

A Bank

Banks in USA have higher fees and uncompetitive exchange rates but it is not a reason to shun them. South African banks tend to have more competitive exchange rates. Using a bank is the quickest way to transfer between bank accounts. 

Paypal

This is a great option for anyone sending smaller amounts under $1000. The exchange rate you’ll get are comparable to a bank but the fees are significantly lower. It is particularly handy when the person you are paying has a PayPal account.

 

A Money Transfer Company

Money transfer companies like OFX and HiFX are often the cheapest option when you are sending between $1000 and $1,000,000 at a time. This is because they offer better exchange rates and lower (and sometimes no) fees. The downside to using a transfer company outside of a bank is that you’ll have to set up an account with them first. This can take between 10 minutes and 2 days depending on how much information they need from you. Also, the transfer itself will usually take 1 day longer than using a bank.

 

How to use a money transfer company (instead of a bank)

Sending money using a money transfer company is similar to using a bank but there are some important differences. Here are the main steps to do it online

 

Setting things up (only has to be done once)

  • Log on to their website and register your details. You’ll need to have some I.D handy
  • Once your account has been approved, you’ll get a login and password
  • Enter the banking details of where you are sending the money. They are usually called the “Beneficiary” or “Recipient”

 

Transferring Money

  • Get a quote for the amount you want to send
  • Confirm the details including the rate and how much it is in US dollars 
  • You’ll get a deal confirmation. Finally you’ll need to pay them the US dollars before the money is sent to South Africa.

 

Information you’ll need before you make your transfer

To transfer money overseas, you’ll be needing the following information of the bank account you are transferring the money too. These are commonly known as Beneficiary or Recipient Details

  1. The Account Name of your Recipient (person/business you are paying)
  2. Their address
  3. The SWIFT Code of their bank

 

A note about sending money to South Africa

It is particularly important to make sure ALL the bank details you use are correct. Banks can be strict and will reject a payment even if a single digit is wrong or a single letter is misplaced.

 

SWIFT Codes

Here is a list of SWIFT codes for the biggest banks in South Africa:

Standard Bank of South Africa : SBZAZAJJATG

First Rand : FIRNZAJJXXX

Barclays Africa Group : BARCGB91XXX

ABSA Bank : ABSAZAJJ

 

How long does it take to send money to South Africa?

PayPal, HSBC and Western Union (cash pick-up) are the fastest options. The transfer can be done in minutes. If you are sending the money to a bank account, it will take 1-2 days if you are using a bank or 2-3 days if you are using a money transfer company.

 

Related: How Long Does An International Money Transfer Take? 

 

Is there a minimum transfer amount?

The banks and PayPal don’t have a minimum transfer amount but most money transfer companies do. If you are sending less than $500 to South Africa and intend to use a money transfer company, make sure you check their minimum transfer amount.

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