Making International Money Transfers: A Guide

Quick answer

• Research transfer services for the best exchange rates and fees.
• Compare services based on speed, security, and customer reviews.
• Understand the total cost, including hidden fees and exchange rate markups.
• Have recipient details ready: name, address, bank name, account number, and SWIFT/BIC code.
• Be aware of potential limits on transfer amounts.
• Keep transaction records for your financial tracking.

Who this is for

• Individuals sending money to family or friends abroad.
• Businesses making payments to international suppliers or contractors.
• Anyone needing to transfer funds to an overseas bank account for personal reasons.

What to check first (before you act)

Goal and timeline

What is the purpose of this transfer? Is it a one-time payment, or will you be sending money regularly? Knowing this helps you choose the right service. For example, a large, infrequent transfer might benefit from a service with lower per-transaction fees, while regular smaller transfers might be better suited to a service with a lower percentage fee. Also, consider how quickly the money needs to arrive. Some services are faster than others, but speed often comes at a higher cost.

Current cash flow

Before sending money internationally, ensure you have sufficient funds available. Review your budget and account balances to confirm you can afford the transfer without impacting your essential living expenses or other financial commitments. Unexpectedly depleting your primary accounts could lead to overdraft fees or missed payments.

Emergency fund or safety buffer

It’s crucial to have an emergency fund before making any non-essential outgoing payments, including international transfers. This fund should cover 3-6 months of living expenses. If your emergency fund is depleted, consider delaying the international transfer until you’ve replenished it.

Debt and interest rates

If you have high-interest debt, such as credit card balances, prioritize paying those down before making international money transfers. The interest you pay on debt often outweighs any savings you might achieve by finding a slightly better exchange rate on a transfer. Check the interest rates on all your debts to understand which ones are the most urgent to address.

Credit impact

While making an international money transfer itself doesn’t directly impact your credit score, the financial decisions surrounding it can. For instance, if you need to take out a loan or use a credit card to fund the transfer because you lack sufficient cash, this could indirectly affect your credit if not managed responsibly. Ensure the transfer is funded from available cash or savings.

Step-by-step (how to make an international money transfer)

1. Define Transfer Details:

• What to do: Clearly identify the amount you need to send, the currency you’re sending in, and the currency the recipient needs. Note the urgency.
• What “good” looks like: You have a precise amount in mind and understand the exchange rate implications.
• Common mistake: Not knowing the exact amount or currency needed, leading to over or under-payment. Avoid it by confirming the exact amount with the recipient in their local currency.

2. Gather Recipient Information:

• What to do: Collect the recipient’s full legal name, their full address, their bank’s name and address, their bank account number, and their bank’s SWIFT/BIC code.
• What “good” looks like: You have all necessary details accurately recorded.
• Common mistake: Typos in names or account numbers, or missing SWIFT/BIC codes. Avoid it by double-checking all information with the recipient and asking them to confirm their bank’s SWIFT/BIC code directly from their bank if possible.

3. Research Transfer Services:

• What to do: Explore various providers like traditional banks, online money transfer services, and remittance companies.
• What “good” looks like: You have a shortlist of 2-3 reputable services to compare.
• Common mistake: Only considering your bank, which often has higher fees and less favorable exchange rates. Avoid it by looking beyond your usual banking institution.

4. Compare Costs (Exchange Rate & Fees):

• What to do: For each service, check the exchange rate offered and all associated fees (transfer fees, hidden markups on the exchange rate).
• What “good” looks like: You can clearly see the total cost of sending your desired amount with each provider.
• Common mistake: Focusing only on the stated transfer fee and ignoring the exchange rate markup, which can be the largest cost. Avoid it by using online comparison tools that show the total amount the recipient will receive after all deductions.

5. Check Transfer Speed and Limits:

• What to do: Determine how long each service typically takes for the transfer to reach the recipient’s account. Also, check if there are any daily, weekly, or per-transaction limits.
• What “good” looks like: You’ve found a service that meets your timeline needs and has appropriate transfer limits.
• Common mistake: Assuming all transfers are instant or not checking limits for larger amounts. Avoid it by confirming estimated delivery times and asking about limits if you’re sending a significant sum.

6. Review Security and Reputation:

• What to do: Look for services that are regulated in the U.S. (e.g., by FinCEN) and have positive customer reviews regarding security and reliability.
• What “good” looks like: You feel confident in the provider’s ability to handle your money safely.
• Common mistake: Using unregulated or obscure services to save a few dollars, risking your money. Avoid it by sticking to well-established and regulated providers.

7. Initiate the Transfer:

• What to do: Once you’ve chosen a service, create an account if necessary and follow their instructions to set up the transfer, entering all recipient details and the amount.
• What “good” looks like: The transfer is successfully initiated with all information entered correctly.
• Common mistake: Making a mistake during data entry at the final stage. Avoid it by reviewing all details one last time before confirming the transaction.

8. Fund the Transfer:

• What to do: Link your bank account, debit card, or credit card to the service, or follow instructions for bank wire transfers.
• What “good” looks like: The payment is processed without issues.
• Common mistake: Using a credit card for a cash advance fee or higher interest, or insufficient funds in your linked account. Avoid it by checking your payment method’s terms and ensuring sufficient funds.

9. Track the Transfer:

• What to do: Most services provide a tracking number or status updates. Monitor the progress of your transfer.
• What “good” looks like: You can see the money moving through the system and confirm when it’s delivered.
• Common mistake: Forgetting to track and not realizing if a transfer is delayed or has an issue. Avoid it by bookmarking the tracking page or setting up notifications.

10. Confirm Receipt:

• What to do: Communicate with the recipient to confirm they have received the full, correct amount in their account.
• What “good” looks like: The recipient confirms successful receipt of funds.
• Common mistake: Assuming delivery without confirmation, which can leave issues unresolved. Avoid it by asking the recipient to check their balance and confirm.

11. Keep Records:

• What to do: Save confirmation emails, transaction receipts, and any communication related to the transfer for your personal records.
• What “good” looks like: You have a clear record of the transaction for budgeting, tax purposes, or dispute resolution.
• Common mistake: Not keeping records, making it difficult to track spending or resolve discrepancies. Avoid it by saving all digital confirmations and printing important documents if necessary.

Common mistakes (and what happens if you ignore them)

Mistake	What it causes	Fix
Using only your bank	Higher fees, less favorable exchange rates, and potentially slower transfers.	Research and compare at least 2-3 specialized money transfer services.
Ignoring exchange rate markups	Paying significantly more than you intended due to hidden costs.	Always look at the total cost, including the exchange rate, not just the transfer fee. Use comparison tools that show the final recipient amount.
Incorrect recipient details	Delayed or failed transfers, potential loss of funds, and extra fees.	Double-check all names, account numbers, and SWIFT/BIC codes with the recipient.
Not checking transfer limits	Inability to send the full amount needed, causing delays or needing multiple transfers.	Verify transfer limits with the provider before initiating, especially for large sums.
Using unregulated services	High risk of fraud, loss of funds, and no recourse if something goes wrong.	Only use services that are licensed and regulated in the U.S.
Not factoring in all fees	Underestimating the total cost of the transfer.	Ask about all potential fees: transfer fees, processing fees, receiving bank fees, and currency conversion fees.
Not confirming receipt	Unresolved issues if the money doesn’t arrive or is the wrong amount.	Always confirm with the recipient that the correct amount has been received.
Sending money without an emergency fund	Jeopardizing your financial stability for non-essential payments.	Prioritize building and maintaining an emergency fund before making international transfers.
Using credit cards for cash advances	Incurring high interest rates and fees on the transferred amount.	Fund transfers with available cash or debit cards to avoid cash advance charges.

Decision rules (international money transfers)

• If you need to send money urgently, then prioritize services known for faster delivery, even if they have slightly higher fees, because speed is your primary concern.
• If you are sending a large sum, then compare providers that offer tiered pricing or lower percentage fees for larger amounts, because a fixed fee can be disproportionately high.
• If the recipient needs a specific amount in their local currency, then calculate the total cost (including fees and exchange rate) to ensure that amount is what they will receive.
• If you are sending money regularly, then investigate services that offer loyalty programs or better rates for repeat customers, because consistency can lead to savings.
• If you are unsure about the recipient’s bank details, then ask them to provide a screenshot of their bank statement showing the necessary information (with sensitive data redacted), because accuracy is paramount.
• If a service seems too good to be true with exceptionally low fees or high exchange rates, then be cautious and research their reputation thoroughly, because it might be a sign of a scam or hidden costs.
• If you have high-interest debt, then consider prioritizing debt repayment over making an international transfer, because the cost of debt often exceeds potential savings on transfer fees.
• If you are sending money for business purposes, then look for business-specific services that may offer better rates, higher limits, and specialized features, because business needs differ from personal ones.
• If the transfer amount is small, then the convenience of using your bank might outweigh minor fee differences, because the effort to set up a new service might not be worth the small savings.
• If you encounter any issues or delays, then contact the transfer service’s customer support immediately, because early intervention can resolve problems faster.
• If you are sending money to a country with currency controls, then research the regulations to ensure compliance, because there may be specific requirements or limitations.
• If you are sending money to a less common currency, then check which providers specialize in that currency, because availability and rates can vary significantly.

FAQ

Q: What is the cheapest way to send money internationally?

A: Generally, online money transfer services offer more competitive rates and lower fees than traditional banks. However, “cheapest” depends on the amount, destination country, and currency. Always compare the total cost, including the exchange rate.

Q: How long does an international money transfer take?

A: Transfer times vary widely. Some services can deliver funds within minutes, while others may take several business days. Factors like the countries involved, the currencies, the chosen service, and the method of payment can all affect the speed.

Q: What information do I need to send money overseas?

A: You’ll typically need the recipient’s full name, address, bank name, bank address, account number, and the bank’s SWIFT/BIC code. Some services might require additional details depending on the destination.

Q: Are there limits on how much money I can send internationally?

A: Yes, most services have transfer limits, which can vary by provider, country, and your account verification level. Some are designed for small remittances, while others cater to larger business transactions.

Q: What’s the difference between an exchange rate and a markup?

A: The exchange rate is the value of one currency against another. A markup is an additional percentage added by the transfer service to the base exchange rate, increasing their profit and your cost.

Q: Can I send money using a credit card?

A: Some services allow credit card payments, but be aware that this may be treated as a cash advance by your credit card issuer, incurring high fees and interest rates. It’s often more expensive than using a debit card or bank transfer.

Q: What is a SWIFT/BIC code?

A: A SWIFT (Society for Worldwide Interbank Financial Telecommunication) or BIC (Bank Identifier Code) is an international code that identifies a specific bank. It’s essential for routing international wire transfers correctly.

Q: How can I ensure my money transfer is secure?

A: Use reputable, regulated money transfer services. Look for providers licensed by financial authorities in the U.S. (like FinCEN). Avoid unknown or unsolicited requests to send money.

What this page does NOT cover (and where to go next)

• Specific exchange rates and fees for any particular service or country. (Next: Visit the websites of reputable money transfer services for current details.)
• Tax implications of sending or receiving money internationally. (Next: Consult a tax professional for advice specific to your situation.)
• Detailed legal requirements for businesses sending large sums or recurring payments abroad. (Next: Seek guidance from a financial advisor or legal counsel specializing in international business transactions.)
• Currency hedging strategies for businesses to mitigate exchange rate fluctuations. (Next: Explore resources on financial risk management for businesses.)
• Using cryptocurrencies for international transfers. (Next: Research the volatility and regulatory landscape of digital currencies.)