A Step by Step Guide on How to Send Money Abroad

There can be multiple reasons for which you would need to send money abroad. Be it to pay for an item, to buy a property or just transfer money to a loved one.

And there are plenty of financial institutions out in the market to help you in this endeavour. These organisations will help you send your money overseas whilst making a healthy cut of profit along the way for you.

However, not every institution transactionsoperates ethically and they could charge you a hefty amount within hidden fees or additional charges. Hence, you need to actively find a company that will assist you to send money abroad cheaplysecurely and fairly.

The best way of transferring money abroad would be the one that is not just cost-effective but simple, secure and fast as well. Here at The Currency Club , we provide you with exactly that, yet we suggest you first learn the correct process of international fund transfer to save some extra money.

Step-By-Step Guide to Sending Money Abroad

Step 1 - First, Determine Your Requirement

Before selecting a money transferring facility, ask yourself the following questions and pinpoint your exact requirement.

a) How much currency do you need to send?

b) Which country are you sending the money to?

c) How does your recipient wish to receive the money? (Directly into their bank account or in cash?)

d) Do you have the correct bank account details of your recipient?

e) How frequently will you send money?

f) How quickly should it reach the recipient?

Only after getting the answers to these questions, you can find your ideal institution to transfer money abroad. Carefully consider the amount you wish to send since a transaction of a significantly high amount requires extra attention to ensure you are not wasting your money.

So, once you have the answers to these questions in hand, assess all the options available in the market. See which establishments provide services that will best suit your requirement.

Step 2 - Assess Your Options

The most common money transfer options you will come across in the market are:

1) Your bank or building society

2) High street cash service to send money

3) Online FX Specialists and Currency Brokers

In general, if you are to use a bank or building society to send money abroad, the most significant benefit is that they are safe. However, sending money internationally via this method is also a costly affair.

Alternatively, you can choose to use a high street service, such as western union or MoneyGram, for your international money transfer needs. Such institutions let the recipient collect cash in the country of their choice. However, you need to understand that you cannot send money overseas at a low cost with their help.

Finally, several online currency specialists and brokers are available in the market. If you can find the right broker online, it will help you transfer money abroad at a much cheaper rate. Moreover, they use practices to safeguard your money under tight regulation ensuring your funds are held separately from company assets. Yet, it is still essential to understand their operations to ensure you get the best deal on your international money transfers.

Step 3 - Understand the Exchange Rate

An exchange rate is a quote of the price of one currency against another, and it is used during currency conversion.

Historically and traditionally, the banks followed by FX brokers have always quoted their exchange rates based on the live interbank rate for a currency pair. If you want to know the interbank rate, you can easily do that for most currency pairs from websites, such as XE and Oanda. The Currency Club's currency converter also shows this rate at any time, ensuring you make a well-known decision.

What is essential to understand is that all traditional FX brokers price their exchange rates for currency transfers based on the live interbank price. In simple terms, the live interbank price is when banks transfer money between each other and consumers cannot access it.

Some companies may even claim that they quote no extra fees or no commission charged when sending money. However, their profits are encompassed within the exchange rate that is being offered to you. This practice is commonly known as the spread.

In addition, FX brokers can undercut the banks because of the volumes they trade. Therefore, even though they do not receive the interbank exchange rate, they can most definitely cut the rate you get from the bank due to significant economies of scale.

For instance, suppose you are trying to send money from the UK, and it is a fixed amount of 40,000 Euros to France. If you contact your bank, they will provide you with an exchange rate.

On making the phone call, they give you a rate of exchange of £1 = €1.1200 to send 40,000 Euros.

Therefore, you expect that this would cost you £35,714.29 pounds (this is simply, 40,000 divided by the rate of exchange)

In the above example, let's say the interbank rate was actually £1 = €1.17. So the cost to the bank for the 40,000 Euros would likely be £34,188.03.

The hidden fee within a transaction is as much as £1526! or around 4% of the original amount. That's a lot of money wasted just to send money abroad! We refer to this percentage as the spread or exchange rate mark up.

The Currency Club, however, provides a transparent option to help you send money overseas at low cost. We provide our online users with access to the interbank rate at the point of making the transaction. Therefore, you can transparently see where the interbank market is, compared to the rate of exchange you are achieving before you confirm. Furthermore, you can refer directly to the currency converter on our home page for more information.

Step 4 - Decide on a Provider

Now that you understand the exchange rate and how different money transfer options treat it, the next step is deciding your provider. This decision significantly depends on what your preference is. For instance, specialist currency firms exist because they quote better rates than the banks. It is especially true when one wants to send money internationally at a low cost. BUT! There is a "quote" mentioned for a reason!

Some currency brokers are notorious for quoting an exceptionally good exchange rate to send money abroad. However, once the account has been opened, they offer a terrible rate from the ongoing interbank exchange rate.

So, if you decide to use a currency specialist, make sure that they are proactive with your needs. They should especially put more effort if you are making a large transfer. Furthermore, ensure that they provide you with a level of transparency, much like The Currency Club.

Step 5 - Find a Proactive and Transparent Currency Specialist

Continuing with the effort of looking for a transparent and proactive specialist, you must understand what that exactly means. So, when you decide to go for a currency broker, make sure that they offer you access to the live interbank exchange rate. Moreover, once you book their money transfer services, they should clearly inform you if there will be any additional fees or hidden charges.

You need to understand that proactivity is a crucial deciding factor when you want to send money abroad. Therefore, make sure that you have been assigned with a dedicated dealer if you are trying to make a larger money transfer. He or she will reach out to you actively and inform you of the current market movements. As in the present climate, exchange rates are easily moving more than 1% within a day. Therefore, you can achieve a great deal of savings by availing assistance from a broker that has a proactive approach when sending your money abroad.

Step 6 - Ensure That the Platform you Use to Transfer Money Overseas is Safe.

Though international fund transfers might seem considerably risk-prone, they are rather safe if you are availing assistance from a banking institution. However, if you do not want to pay the high exchange rates and transfer fees it charges, the risk might increase.

Hence, to send money abroad, you need to ensure that your chosen institution is safe. Do your homework on it; check if the company or currency specialist is regulated by the FCA (the Financial Conduct Authority). Openly ask the company if they have a valid money service business license to offer the services they promise.

You can further verify their claims by looking up their company's name on the money services business register from HMRC and FCA's official website. In addition, the Payment Service Directives mandates every FCA authorised company to follow their strict guidelines and safeguard their client's money. So, by selecting a company with all the certifications mentioned above, you can transfer money abroad at almost zero risks.

While you can use the above-mentioned steps to find the ideal broker for your requirement, we are here to ease your hassle. If you are searching for "the cheapest and secure way to send money", The Currency Club is your ideal answer.