When We Moved to Sydney, We Transferred Money the WORST POSSIBLE Way.
WITH A BANK! ⛔️ 🤦♀️
I lost $2,400 on our first transfer. Each bank charged us a fee, the exchange rate was complete crap, and we had to wait for over a week until the money showed up in our bank account in Australia. We needed that money asap. No money meant no apartment. No money also meant living on credit cards. Not a good long-term plan.
On our $50,000 transfer, a good forex company would’ve saved us that $2,400. Instead, we paid bank fees on both ends plus a terrible exchange rate that was 4% worse than what we could’ve gotten.
You know that feeling when you realize you’ve been doing something the hard way for months? That’s exactly what happened here.
This is a bit embarrassing to admit, but we transferred money several times until one of our expat friends told us about OFX, an international forex company that started in Australia.
I now use OFX for most of my transfers and WISE when I need money transferred same day. I’ll explain exactly when to use each one in a moment.
But first, let me explain why transferring money with a bank is financial self-sabotage.
Why Use a Forex Company and Not a Bank
When I say forex company, I don’t mean the TravelEx booth at the airport.
I’m talking about forex trading companies that buy and sell large sums of currencies to make a profit from changes in exchange rates. I’ve got a few forex companies I recommend listed on my resources page, but I first want to cover why you should use a forex company.
Reality check: Why do banks suck so much at this?
The Australian Dollar’s a floating commodity currency and highly volatile compared to USD, GBP, or EURO.
Banks DON’T consider the volatile nature of the Australian Dollar when setting their daily exchange rates.
Forex brokers specialize in one thing only, foreign currency exchanges. It’s all they do, every day of the week.
A forex broker can often beat the banks’ exchange rate by over 3% because they’ve got lower operating costs than a bank.
Banks charge transfer fees, often from both banks, plus a percentage per exchange.
Banks limit the amount of money you can transfer either daily or monthly.
When you transfer money with a bank, you’ve got no control over when the exchange will happen. Thus, you’ve got no control over the exact rate of exchange.
With a forex broker, you can lock in an exchange rate and it’s FAST! For more frequently traded currencies like USD, EURO, and GBP to AUD, it can be as fast as the next day.
Real example: On a $50,000 transfer, you’re looking at saving $1,500 to $2,500 by using a forex company instead of your bank. That’s not pocket change.
Forex Exchange Rates vs. Bank Exchange Rates
You want the best exchange rate when transferring money, right?
Well, you won’t get it with a bank. You can get the best exchange rate, at the time you’re transferring money, with a forex exchange broker.
So how much could this currency volatility actually cost you? Remember the first point about the Australian Dollar being a free-floating, volatile commodity currency? Let me explain what that means and how it impacts your exchange rate.
The Australian Dollar: Two Key Facts
Pegged Currency vs. Free-Floating
A pegged currency is when the “government sets a specific fixed exchange rate for its currency with a foreign currency or basket of currencies.”
The Australian Dollar used to be a pegged currency. It was pegged to the USD, and before that to the British Pound.
In 1983, the Australian Dollar became a free-floating currency. As a free-floating currency, it fluctuates based on market conditions.
Commodity Currency
The Australian Dollar is a commodity currency.
This means the market value for the country’s natural resources such as iron ore, gold, coal, and agricultural exports will affect the exchange rate. So the price of iron ore will affect the exchange rate. Or weather conditions that damage crops.
The interest rate set by the Reserve Bank of Australia (RBA) will also affect the exchange rate.
What Does This Mean to You?
Well, for one, it means the Australian Dollar jumps around a hell of a lot more than the US Dollar, British Pound, or Euro.
Two, you’ll need to start paying attention to things like when the RBA announces a change in interest rates. For example, in 2020, the RBA cut interest rates three times to record lows. (Yeah, I know, 2020 was a record low for me too.)
But here’s the real kicker. Banks DON’T consider the volatile nature of the Australian Dollar when setting their daily exchange rates.
Banks set daily exchange rates. Some banks fix their exchange rate in the morning, with no chance of adjustment no matter what happens to the currency markets during the day. So the market drops and the Australian Dollar takes a hit, banks don’t care. You get whatever exchange rate they set for that day, at that time.
No Control Over When Your Transfer Actually Happens
Sure, a bank has an oh-so-easy-to-use form for you to fill out with a confirmation button at the bottom, but your transfer does not happen the instant you click confirm.
The only thing the confirmation button does is start the process.
Since you don’t know when the exchange will happen, you won’t know what the exchange rate will be until the transfer has gone through and it’s too late.
In addition to better exchange rates, using a forex company gives you more transfer options.
Transfer Options and Locking In a Rate of Exchange
Disclaimer: I am not a currency broker. The information provided is not financial advice. Consult your forex broker for detailed guidance. Brokers may use different terms and offer various options. Be sure to ask about restrictions, including time limits and minimum or maximum transfer amounts.
Forward Contract
A Forward Contract locks in an exchange rate for future transfers. Once locked in, you cannot change the rate even if a better one comes along.
This type of contract is beneficial for protecting against unfavorable exchange rate drops. This is also why you want to start watching the currency market sooner rather than later and get your forex accounts set up.
All forex brokers set their terms for Forward Contract transfers. OFX offers up to 12 months, while some brokers may allow up to two years.
Limit Order
A Limit Order allows you to set a target exchange rate. When this rate is reached, the transfer is triggered automatically, regardless of the time of day.
Limit Orders are not open-ended. For example, with OFX, a Limit Order is valid for up to six months. Check with other brokers for their specific terms.
Typically, there is a minimum transfer amount for Limit Orders. For OFX, the minimum is $1,000 USD. Verify this amount, especially for different currencies.
Spot Contract
A Spot Contract is most frequently used for transferring money overseas, but you can’t lock-in your exchange rate and transfer later.
Think of it as an on-the-spot exchange. You’ll still get a more competitive exchange rate with a forex broker than a bank-to-bank transfer with a Spot Contract, even though you can’t lock-in a rate.
Combo Platter: Limit Order and Stop Loss
Combining a Limit Order with a Stop Loss Order can protect against exchange rate drops. The Stop Loss Order activates if the exchange rate falls to a specified level set by you.
This combination allows you to set your transfer within a specific exchange rate range. Exercise caution when setting these orders together, as the Australian Dollar is highly volatile. Ensure the Stop Loss Order does not trigger before the Limit Order target rate is reached.
My Primary Recommendation: OFX for Most Transfers
After transferring money to Australia more times than I care to count, I primarily use OFX for most of my transfers. I’ve also got Wise for specific situations, but let me explain why OFX’s my go-to recommendation.
So which service should you actually choose? Here’s my decision framework: If you’re transferring over $5,000 and can wait 1-2 business days, go with OFX. If you need it transferred today or you’re sending less than $5,000, use Wise.
Partnership benefit breakdown:
I’ve negotiated a partnership that gets Sydney Moving Guide readers free transfers for LIFE. No transfer fees, ever. I’ve referred over 1,300 expats who’ve transferred money more than 7,000 times using this benefit.
The numbers speak for themselves. On a $25,000 transfer, you’ll typically save $500-$750 compared to banks. On $50,000, you’re looking at $1,000-$1,500 in savings. That’s real money that stays in your pocket.
When I use Wise instead: Small amounts under $5,000, emergency transfers that need to happen same day, or when I’m sending money to weird currencies that OFX doesn’t handle as well.
But honestly? For most families moving to Sydney who need to transfer significant amounts, OFX’s the clear winner. It’s like choosing between your main kitchen and the break room microwave. Both heat food, but you wouldn’t cook Thanksgiving dinner in the break room. The free transfer benefit alone saves most people $50-$100 per transfer.
OFX vs Wise: The Complete Comparison
Disclaimer: I’ve mentioned this before, but to be absolutely clear. I’m not a currency broker. The information provided isn’t financial advice. While I’m a partner of both OFX and Wise, you can either use my links or search for them directly.
OFX: Pros & Cons
Free Transfers for LIFE for SMG Readers. I’ve referred over 1,244 expats that have transferred money over 7,236 times.
Most major currency transfers, such as USD to AUD, EUR to AUD, and GBP to AUD, typically arrive within 1–2 days.
Minimum transfer amount of $250 AUD and $150 USD.
No maximum transfer limit. Banks can have daily limits. Transfer partial amounts to OFX, convert to AUD, then transfer the lump sum from OFX to your bank in Australia.
Manage transfers online or with the OFX app, and by phone. Yes, you can talk to a real person about your transfer if you want.
24/7 broker phone service plus a broker will email you when you sign up to ask about your plans.
WISE: Pros & Cons
Fees typically range from 0.33% to 2.35% of your transaction, sometimes slightly higher, plus a fixed fee depending on the destination currency.
No matter the currency you’re sending, converting your money can take up to 2 working days.
Very low minimum transfer limits, though specific minimums vary by currency pair.
$1,000,000 maximum transfer limit. Check with your bank for daily transfer limits from your bank to Wise.
Manage transfers online or with mobile app.
Multi-currency account with a linked international debit card.
Cannot lock-in exchange rate months in advance of transfer since not a forex broker.
Alternative Options
OFX and Wise are not the only option you have when transferring money to Australia. There are heaps. I thought I should mention a few in case you want to check out other options. Yes, I am partners with all of them.
TorFX and XE Money Transfer are two forex options. TorFX has excellent reviews and like OFX does not charge transfer fees. XE Money Transfer does charge a fee depending on how you chose to pay, the currency you’re sending and the country you’re sending money to.
Currency Fair is a FinTech alternative to Wise, though less well-known. They offer SMG readers a special deal: your first three transfers are fee-free when you use my referral link.
What to Read Next
I have many posts about expat finances. I would take a look at those next. I cover more than transferring money. I cover cost of living, expat taxes, and opening your Australian bank account before you move. You’ll definitely want to read that last one as you’ll need a bank account to transfer funds to.