Transferring money internationally is a common problem for expats as many still have bills back home that they need to stay on top of.
When we moved to Sydney in 2008 we had no idea what the best way was to transfer money from the States to our new Australian bank account.
Taking our life’s savings with us on the plane was not an option that we were comfortable with nor feasible as there is a $10,000AUD limit one can take into the country upon arrival.
The other option was transferring money bank to bank but this meant paying high fees plus a percentage on top.
But we needed funds straight away to pay for the bond and first month’s rent on our new apartment in Sydney plus we needed things like food, a bed to sleep on and, oh yeah, a fridge since our new flat didn’t have one.
(Most rental apartments in Sydney do not have a fridge or washer/dryer. You will need to purchase your own. Yet another item to add to your moving budget.)
So what did we do?
Well, we chose to transfer money from our US bank to our Australian bank account.
Not only did it hurt financially but it was also upsetting having to pay so much in fees and not just from one bank but BOTH banks! Highway robbery.
There had to be a better way.
Lucky for us Peter Lavelle, a currency dealer at foreign currency specialist Pure FX, is here to help. Peter has graciously offered to answer a few of the most frequently ask questions he gets from expats living abroad.
Transferring Money Internationally FAQs
1. What’s the best way to transfer my money to Sydney?
The best way to transfer your money to Sydney is with a foreign currency specialist, rather than a bank.
This is because a foreign currency specialist will give you an exchange rate up to 4.0% better than a bank, which ultimately means you’ll receive a higher Australian dollar total.
If you’re transferring a large sum, +4.0% can add hundreds or thousands of Australian dollars to your total.
2. What are the advantages of using a foreign currency specialist, rather than a bank, to transfer my money to Sydney?
First, you’ll get a better foreign exchange rate. This can be up to 4.0% better, which on a large transfer adds up to hundreds or thousands of Australian dollars to your total.
Second, transfers are often free with a foreign currency specialist. By comparison, a bank may charge you between £20-40.
Third, you’ll receive expert service with a foreign currency specialist. They’ll tell you how the exchange rate is doing, and guide you through the transfer process. By comparison, a bank may be less helpful.
3. How do I find the best Australian dollar exchange rate?
To find the best Australian dollar exchange rate, you can use Google.
Go to Google, and enter the 2 currencies you’re planning to exchange. For example, if you want to exchange pounds for Australian dollars, enter “Pound to Australian dollar”.
Google will then return the latest exchange rate, as well as a graph of the exchange rate going back to 2009.
Using this, you can see when the best foreign exchange rate is available.
4. How do I make sure my money transfer is safe?
To make sure your money transfer is safe, check if your foreign exchange specialist is directly authorised by the Financial Conduct Authority in the UK.
If they’re directly authorised, it means they’ll hold your money in what are called designated client accounts.
These are separate from the business accounts, and are ring-fenced and protected. It means your money is completely safe.
To find out if a company is directly authorised, check the FCA register.
5. How can I protect myself against sudden changes in the foreign exchange rate?
To protect yourself against sudden changes in the foreign exchange rate, you can use what’s called a forward contract.
A forward contract lets you fix the exchange rate at a certain time, so that even if the rate changes later on, the fixed rate is the exchange rate you get.
For instance, if the pound rises to 1.55 against the Australian dollar, and you set up a forward contract, you’ll get 1.55, even if the pound later falls to 1.50.
6. Will fluctuating exchange rates really make a difference to me?
A small change in the foreign exchange rate can make a big difference to your foreign currency total.
For instance, let’s say you’re transferring £250,000 to Sydney.
If the exchange rate is 1.50, you’ll get AU $375,00.
However, if the exchange rate rises to 1.55, you’ll get AU $387,500.
Hence, just a 5 cent movement can leave you AU $12,500 better off.
One again, OFX forex exchange specialist have a special promotion offer for SMG readers: Free Money Transfers for life.
Disclosure of Material Connection: This is a “sponsored post.” The company who sponsored it compensated me via a cash payment, gift, or something else of value. Regardless, I only recommend products or services I use personally and believe will be good for my readers. I am disclosing this in accordance with the Federal Trade Commission’s 16 CFR, Part 255: “Guides Concerning the Use of Endorsements and Testimonials in Advertising.”