International money transfer: how to quickly send money abroad
There are several different ways you can send money to a person or business overseas including using your high street bank, a foreign exchange broker, or a money transfer firm.
If you need to send money to someone in a different country you’ll need to make an international money transfer.
You may need to transfer money to your child who is on a gap year, a relative living in a different country, or even a gift of cash to a friend who doesn't live in the UK.
There are lots of companies you can use to do this, but each has its own fees. So how do you pick the best way to transfer the money and what are the pros and cons of each option? Here we explain everything you need to know about international money transfers.
How do international money transfers work?
When you make an international money transfer, the process works in a similar way to transferring money to another UK account. You may be able to do it online, over the phone, or in person in a bank branch.
The company you choose to make the transfer will have its own rules but in general they will use the following steps.
- To make the transfer you’ll need to sign up to an international money transfer provider or you may be able to use your UK bank.
- Before the transfer is made you’ll be told all the fees and the exchange rate you’ll be charged.
- When you make the transaction, it will typically come from your UK account and be sent electronically.
When money is transferred the Society for Worldwide Interbank Financial Telecommunication (SWIFT) payment system is normally used. It sends information between banks to let them know how much money to transfer. More than 10,000 banks around the world are signed up to the service.
Which companies provide them?
Lots of companies allow you to make money transfers internationally although the charges between them can vary quite a bit.
High street banks
You may be able to use your UK bank to make a money transfer. You can do this online, on the phone, or in a branch. Before you make the transfer always check the fees and exchange rate to see if you’re getting the best deal. Some banks, such as HSBC, also allow free transfers to other HSBC accounts in different countries.
Money transfer firms
Using an international transfer firm tends to be one of the cheapest ways to send money overseas. Not only are the fees for making a transfer competitive, these companies generally offer cheaper exchange rates as well. There are also high-street money transfer firms, although these tend to be more expensive.
What do you need for a money transfer?
When you make an international money transfer you need to provide a few more details than you would if it was a UK transfer. These include the following:
- The amount of money you’re transferring and the currency it needs to be received in
- A bank account or IBAN (International Bank Account Number)
- The name of the person receiving the money, their bank and sort code
- The Society for Worldwide Interbank Financial Telecommunication (SWIFT) code of the person you’re sending the money to. This is an internationally-recognised code and it identifies their bank account.
How much does an international money transfer cost?
You will be told about any fees associated with the exchange before you make it. These can include fees charged by your bank for sending the money, fees at the recipient bank, and an international transfer fee.
There’s also the exchange rate to take into account. This should be clearly shown before you make the transfer but it can be hard to find, especially as some banks have their own exchange rate they use.
How can you compare costs?
To assess all the costs, you need to factor in any fees charged and find out what exchange rate the company is using. You should then be able to work out how much the money is worth when transferred into the new currency. For example, if you’re sending £1,000 to a friend in New York, you’ll want to know how much they will receive in dollars when the transfer has been made.
There are a number of free foreign exchange calculators which can help.
How long does it take to send money abroad?
Unlike with UK money transfers, there’s no set time limit when you make an international transfer and it all depends on how you’re doing it.
You should be told how long it’ll take before you make the transfer, this can typically be between one and five working days, according to Transferwise.
Rebecca Goodman is a freelance journalist who has spent the past 10 years working across personal finance publications. Regularly writing for The Guardian, The Sun, The Telegraph, and The Independent. Read more