For South Africans who live in the UK, there are a number of reasons for wanting or needing to be transferring money to South Africa. Whether it be for business or for pleasure, you need to make sure that you get the best rates for your transfer.
The positive news is that there are plenty of ways to lower the fees and charges which you face. The beauty of all of the options being online makes comparing methods easy and quick.
The intention of this guide is to consider some payment methods based on different situations.
What is the Best Way to Send Money to South Africa?
If you are moving from South Africa to the UK
All of the UK banks let you transfer money to South Africa and back and it’s a very easy process to do so. However not all UK banks will accept South African Rands (ZAR). It’s also worth remembering that the fees charged by banks for international transfers are high. Hence, you will not be getting the most competitive exchange rate.
To avoid large fees, consider using an online money transfer service.
Our Verdict: OFX give you competitive exchange rates for transfers of ZAR. A good choice for payments that are under £10,000.
Business Currency Transfers
If the business is sending currency between the UK and South Africa, consider these two important things.
- The Exchange Rate Margin is the difference between the rate you are offered and the wholesale exchange rate published by xe.com.
- The specific business products on offer. These could be forward exchange contracts, limit orders and foreign currency accounts.
Our Verdict: HiFX have great exchange rates and a £0 fee structure which maximizes your overseas payments. You can also set up foreign currency accounts. This lets you keep the funds in your account in a foreign currency, only converting them when the time is right.
Buying a Property
If you are in the process of buying a property in South Africa then you need to find a provider who has a strong presence in both countries. This will give you peace of mind and flexibility in what is usually a stressful time.
Sending Money Home
Western Union, for example, is the ideal choice for sending small amounts internationally. For example, gift money for friends or relatives. Other companies may waive transfer fees if you are sending a large amount. Discussing your specific needs with a money transfer specialist is critical to getting the right deal for you.
Payment for tuition can be a big expense. You need to pay tuition fees regularly but there are also multiple other expenses associated with studying. For the tuition fees and other larger payments you need to ensure that you shop around for the best exchange rates. For those smaller transfers make sure you keep a careful eye on the fee you are being charged.
Our Verdict: Worldfirst. A perfect company for students and their parents to use which will save on unnecessary transfer costs.
Ways to Send Money to South Africa
The Costs of Sending Money between the UK and South Africa
Trying to figure out the complete cost of a money transfer can be difficult. It all depends on the transfer method and the fees involved, the margins aren’t always clear. To help you, we’ve compiled a list of the most common charges you’ll face when sending money from one account to another.
- The Transfer Fee – This is also called a Telegraphic Transfer (TT), a Wire Transfer or a Remittance Fee.
- Exchange Rate Margin – The difference between the rate you are getting and the wholesale rate you see on xe.com.
- Correspondent Bank Fees – The fees that your bank charges for guaranteeing your transfer gets to the right account. It is taken out when the funds arrive in the recipient’s account, it’s always very difficult to estimate it and impossible to reverse.
- Receiving Bank Fee – If you’re transferring foreign currency into an overseas bank then that bank will charge you a fee for doing so. In this instance, if you send British pounds to a South African bank then the South African bank will charge you.
What are the options?
Banks in the UK offer more competitive fees and better exchange rates than most other banks around the world as there is much more competition for this kind of service in the UK. Using a bank is the fastest way to get money between accounts.
If you’re sending less than £1,000 then this is a great option. The fees will be similar to those you’ll find at a bank but the exchange rate will be better. If the person you are sending money to also has a PayPal account then the process is even more convenient.
Money Transfer Company
Money transfer companies such as HiFX and OFX are definitely the cheapest option if you are sending anything over £1,000. They offer little or no fees and the exchange rates are better. The only disadvantage would be that it may take a little longer to make the transfer. You’ll initially have to set up an account with them. This process can be as little as ten minutes or as long as two days depending on the company and what they need to know. When you eventually make the transfer it can also take one day longer than a bank.
How to use a Money Transfer Company (instead of a Bank)
Transferring money in this way is similar to using a bank but with a few distinct differences. Here are the basic online steps.
Setting things up (one off)
- Log in to their website and enter the details required. Make sure you have your ID available.
- Wait for account approval, you’ll then receive a login and a password.
- Ensure you have the banking details of where you are sending the money and enter them. The receiver is usually known as the ‘Recipient’ or ‘Beneficiary’.
Transferring the Money
- Advise the amount you want to send and get a quote.
- Reconfirm the details, accept the exchange rate offered to you and confirm the amount in sterling.
- You will receive a confirmation of the deal. You will pay them in sterling before the amount is sent to South Africa.
Information You’ll Need Before Making Your Transfer
When sending funds overseas you will need the following information about the account you are sending to.
- Account name of the recipient
- Their address
- The SWIFT code of the bank
A single digit or mistake in address can cost a lot of time and effort. Banks can be picky and could delay proceedings if any mistakes are made.
Here is a list of SWIFT codes for the larger South African banks.
- 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?
If you’re looking for speed then HSBC, Western Union and PayPal are your best options. Transfers take a matter of minutes. If you’re sending money to a bank account using a bank then the process will take 1-2 days. If you’re using a money transfer specialist that could increase to 2-3 days.
Is There a Minimum Transfer Amount?
Banks and PayPal do not have a minimum limit but some money transfer specialists do. Before using them make sure you check their minimum transfer amount.
Sarah and Emershan have recently moved to London from Johannesburg. They have both got jobs in the city and are living there with a view to making the move permanent if they like it.
They are both from large families and birthdays, anniversaries and other celebrations are frequent and they often need to send money home for presents.
They primarily use PayPal to send money but some of Emershan’s family live in remote villages and do not have access to the internet. For these instances they use Western Union whose cash pick up services make them the ideal choice.