Avoiding Nasty Fees When Sending Money to Australia

12 ApostlesWhatever reason you have for sending money to Australia, there are many things to consider. It’s always best to compare rates and services and ensure you shop around to get the best deal for you, and for the people receiving the money.

 

When you are sending money to and from Australia, bear in mind that all companies have different exchange rates and charge different fees for different services.

 

To go through every method of transfer in detail would take a lot of time, so we’ve selected some of the best methods that you should use, depending on the situation.

 

The best ways to transfer Australian dollars

 

Moving to or from the UK

British banks allow you to send money to and from Australia and it’s relatively easy to do, even for the first time. Remember however, banks will charge a high fee for international money transfers and they will not normally offer you the best exchange rate available.

 

To avoid the large fees charged by banks it is worth considering a money transfer service, this gives you a wider choice of options to think about.

 

Providers that offer a service for transferring money from the UK to Australia are Currency Online, HSBC, OFX, TorFX, Travelex, World First, CurrencyFair, HiFX and Citibank.

 

Our Verdict: TorFX has head offices in both the UK and Australia so has the ability to provide local support at either end of the transaction. If you have moved to the UK or Australia then TorFX are the ideal choice as their GBP/AUD exchange rates are always excellent.

 

Honourable mention: OFX have an easy to use online platform and a global network.

 

Business Currency Transfers

If you have a business that is regularly transferring money from the UK to Australia then there are two very important considerations.

  1. The exchange rate margin. The difference between the rate you are paying and the wholesale exchange rate.
  2. The specific business products on offer. These could be forward exchange contracts, limit orders and foreign currency accounts.

 

Our Verdict: Think about HiFX.  They have a £0 fee structure in place and competitive exchange rates.  This allows you to maximize overseas receipts or payments. They can also provide Foreign Currency Accounts which will allow you to keep your funds in a foreign currency, only converting them as and when you need to.

 

Buying or Selling a Property

If you are in the process of buying a property in Australia or have recently sold a property and want to get the money back to the UK, 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.

 

Our Verdict: TorFX is the obvious choice for international property transactions due to its local account managers in each country. They are licensed and regulated in both the UK and Australia.

 

Sending Money Home

Transferring money can sometimes be an unnecessarily difficult experience.  All you need to do to make it easier is having the right information in front of you and an expert in currency conversion at your beck and call. Benefits can be boosted and risks can be minimized. Find a company that uses an online payment platform and a customer support present in the country required.

 

Our Verdict: You can achieve a spread of 1% or perhaps lower if you use the right exchange specialist such as OFX or TorFX. You can also ensure you get the lowest fees and create an ongoing strategy. Hedging tools may also be available.

 

Honourable mention: Western Union need to be mentioned simply for the use of use of their cash pick-up service and their worldwide reach.

 

Studying Overseas

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 smaller transfers, make sure you keep a careful eye on the fee you are being charged.

 

Our Verdict: Transferwise. This is a fairly new but up and coming company based in the UK. It is perfect for students and the parents of students who need to pay study bills.

 

Honourable mention: Nexpay are a good option in Australia for student expenses.

 

Tools to Help You Send Money to Australia

 

The Costs of Sending Money to or from Australia

Trying to understand the complete cost of a money transfer can be difficult. It all depends on the method of transfer and the fees involved. Hence, the margins aren’t always clear. To help you, we’ve compiled a list of the most common charges you will face when sending money from one account to another.

 

  1. The Transfer Fee – This is also called a Telegraphic Transfer (TT), a Wire Transfer or a Remittance Fee.
  2. Exchange Rate Margin – The difference between the rate you are getting and the wholesale rate you see on xe.com.
  3. 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 recipients account, it’s always very difficult to estimate it and impossible to reverse.
  4. 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 an Australian bank then the Australian bank will charge you.

 

What are the options?

 

Bank

Banks in the UK have 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.

 

PayPal

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 low or no fees and the exchange rates are better. It can take a little longer to make the transfer which is a disadvantage. You’ll initially have to set up an account with them. This process can be as short 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 Australia.

 

Information You’ll Need Before Sending Money to Australia

When sending funds overseas you will need the following information about the account you are sending to.

  1. Name of the recipient/beneficiary and full address.
  2. The bank name
  3. The bank SWIFT code.
  4. BSB (bank, state, branch) and account number.

 

Note:

British banks are also identified by sort codes which are similar to a BSB. If transferring money TO a British bank then you may also be asked for an IBAN. This is a 22 digit number beginning with GB.

 

How Long Does it Take to Send Money to Australia?

If you’re looking for speed then 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 take up to 2-3 days.

Related link: How Long Does It Take To Transfer Money Overseas?

 

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.

 

Case Study

Aaron has a daughter, Chloe, who is studying in Australia. Every year he has to pay tuition fees of £5,000. He transfers this money to the bank account of the university in Australia using a money transfer specialist such as OFX.

 

Aaron also helps Chloe with contributions towards food, books and other study equipment. As these expenses are small and ad-hoc, and they both already have PayPal accounts set up, he uses this option to make these transfers.

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