Making international money transfers from Australia is a much easier process these days than in times gone by. However, with every bank leveraging its own...
Banks are all the same, right? Well, not quite. When it comes to international money transfers (IMTs), they can differ quite a lot, with contrasting fees and exchange rates, and different sorts of services on offer as well. So if you’re looking to move some money overseas, whether for a business transaction or to pay family or friends, read on to find out what you need to know.
In this article, the focus is mainly on banks, and how you can use them to make an international money transfer. But that’s not the only method by any means. Here’s a fuller list of the different ways you can send money abroad.
- Banks. Most Australian banks are only too happy to let their customers make an international money transfer. But in part, that’s because they profit quite a lot when they do. More on this shortly.
- Payment service providers. To get round the traditionally high fees that banks charge, more and more people are turning to specialist international transfer providers. Wise is one such service, which prides itself on only ever charging the mid-market exchange rate, meaning that your money won’t be marked up when it’s converted into the destination currency. There’s a little more about Wise later on too.
- Cash or cheque. Despite the many technological advances in recent years, the post - snail mail, as it’s known these days - still persists. Sending your money overseas in an envelope - either in cash, or, more securely, a cheque - isn’t necessarily the most reliable or the best value option. But it is still an option.
For more information about fees, exchange rate and transfer time for a specific bank, please click on the bank name. This will forward you to an article about that specific bank.
|Bank||Sending fees (Online payment)||Receiving fees||Exchange rate|
|Wise||The sending fee consists of a small fixed fee + a percentage of the amount. You can calculate the exact fee on the pricing page.||$0 fees for receiving EUR, GBP, AUD and USD in your Wise borderless multi-currency account.||Wise uses the mid-market rate to convert your money. You see the rate that is offered to you upfront, and for the majority of currency pairs this exchange rate is locked for a certain amount of time.|
|Westpac||Sending in foreign currency - $10 / Sending in AUD - $20||$12||“The exchange rates are indicative only as at the time and date shown,............They may also vary depending on the type of the transaction involved, and may be different for transactions over a certain amount. They should not be relied upon as an accurate representation of any final pricing. “|
|NAB||Sending in foreign currency - $10 / Sending in AUD - $30||$15||“An indicative exchange rate will be provided in the international funds transfer form and you will be asked to accept the final, real time foreign exchange rate when confirming the transaction.”|
|ANZ||Sending in foreign currency, and amount is below $10,000 - $12 / Sending in AUD - $18||Up to $15||“Where you purchase an international Money Transfer in a currency other than Australian dollars, then the exchange rate that applies to the purchase of the international Money Transfer is the rate displayed and accepted within ANZ internet banking at the time when your request for the international money transfer is submitted.”|
|Commonwealth Bank||Sending $1000 or less from an AUD account - $6 Sending more than $1000 from an AUD account - $12||Up to $11||“Conversion will occur at the published Bank buys IMT rate on the day the charge is made.”|
|Bendigo Bank||Sending an international outward telegraphic transfer - $30||$10 Receiving international payment in a foreign currency $2 Receiving international payment in AUD||Bendigo bank uses a buy and sell rate to convert your money. Exchanging from AUD to a foreign currency will be done at the sell rate, the other way around will be done at the buy rate.|
|Citibank||No fee for making an international transfer||No receiving fee||About Citibank Global Transfers, they say: “Funds are converted to the destination account currency at the exchange rate specified to you on Citibank Online before you confirm your transaction. This exchange rate includes a commision of the conversion service. “|
|ING Direct||$15 for transfers under $10,000 / $0 for transfers over $10,000||$0 fees when payment is sent in AUD||ING Direct international transfers are made through OFX. OFX says about their exchange rate: “Unfortunately for consumers, most banks charge up to a 5% margin on the interbank rate ….. At OFX, our margins are substantially less,”|
|BOQ||$30||$10||BOQ states about their Foreign Exchange Calculator: “This calculator allows you to convert foreign currencies to and from Australian dollars (AUD) based on current exchange rates, but is is only indicative. Your actual exchange rate is displayed when completing a transaction.”|
|Bank of Melbourne||$10 per transfer in foreign currency $20 per transfer in AUD||$15 (plus overseas bank charges)||Foreign currency conversion fee 3% - “This fee is charged for any transaction that involves the conversion of an amount of foreign currency into Australian dollars.”|
|St. George Bank||$10 per transfer in foreign currency $20 per transfer in AUD||$15 (plus overseas bank charges)||Foreign currency conversion fee 3% - “This fee is charged for any transaction that involves the conversion of an amount of foreign currency into Australian dollars.”|
|HSBC Australia||$20||$10 if credited to an existing HSBC account||HSBC says: “For amounts below $50,000, where the Bank is unable to provide a firm exchange rate quotation, the Bank shall effect the remittance on the basis of a provisional exchange rate, which shall be subject to adjustment when the actual exchange rate is ascertained.”|
|UBank||It’s not possible to send money to a bank account overseas||No fee charged for incoming international telegraphic transfers||Although you can’t make an international transfer with UBank, you can receive one. As the money can only be deposited to your account in AUD, it will have to be converted first, either by the sending bank, or UBank. UBank says: “The bank doing the conversion (which may be us, or another bank) will generally use its own exchange rate/s prevailing at the time of conversion.”|
|Suncorp||$20||No fee charged for receiving an international transfer||Suncorp uses buy and sell rates to process incoming and outgoing international transfers, instead of the mid market rate.|
|Bankwest||$15||$10||Bankwest uses buy and sell rates to process incoming and outgoing international transfers, instead of the mid market rate.|
As you can see from the table above, there are several different types of fee that you might end up being charged, when you make an IMT through a bank.
These are the primary fees charged by the bank. They can vary substantially from bank to bank - or even between different types of accounts with the same bank. This might often look like it’s the only fee you’re charged. But it probably won’t be. It might not even be the biggest one.
Also, some banks occasionally offer ‘zero fees’. That often just means zero transfer fee. There’ll probably still be the fees listed below.
These are hard to find out about, and potentially a real pain. The vast majority of international money transfers are made using the SWIFT network - a worldwide system of interlinked banks that is not always as swift as its name suggests. When your money travels from your bank to the recipient’s, it can pass through several completely different banks - ‘intermediary’ or ‘correspondent’ banks - on its way.
The big problem with this is that each of these banks can charge its own fee. Without actually telling you, or even your bank. That’s right: the recipient will simply receive less of the money than you or they will have expected. So: what will your international transfer really cost? Although it’s a good idea to ask your bank about this before you make the transfer, they might not even know exactly how high these fees will be
Another fee that’s out of your bank’s hands is the fee charged by the recipient’s bank. Some banks are in the unpleasant habit of charging their customers for receiving money. There’s not much you can do about this yourself, but do check with the recipient - if they have multiple bank accounts, it could be worth them checking which one charges the lowest fee.
The exchange rate: another hidden fee
We’re not accustomed to thinking of the exchange rate as a fee. But we should be. Especially when the banks are involved.
Have you heard of the mid-market exchange rate? It’s an average of all the exchange rates currently in use for any two currencies - it tells you how much your Australian dollars are really worth at the moment in US dollars, for example, or euros. This is the rate you’ll find on online currency converters like Google or XE. And it’s this rate that the banks tend to use when they trade between themselves.
But it isn’t the rate the banks use when they deal with their actual customers. Then, they mark the rate up, so that they can effectively pocket the difference. It’s very unusual for banks or other transfer providers to offer the real mid-market exchange rate - Wise is a rare exception.
That’s why you should always check what exchange rate you’re being offered by your bank when you look to convert your money, and compare their rate to the one you see on an online currency converter - the exchange rate can make a big difference to the real cost of your transfer. Just as big a difference, in fact, as the fixed fees you’re actually told about.
Once you’ve taken all that into consideration, you might quite understandably want to look at ways to reduce your bill. Here are some pointers.
Check with your bank (or other provider) what exchange rate they’re planning to offer you. And be prepared to shop around if what you’re offered is too far away from the real mid-market rate.
Go to an online currency converter like Google, XE or Wise to find out what your money’s really worth in a foreign currency. Keep this figure in your mind - too far away from it, and you’re losing out.
Get as detailed an estimate as you can from your bank, and from any other services you might want to use. Compare these estimates to what you’ve found from your currency converter. Don’t say we didn’t warn you.
If you often find yourself making or receiving foreign payments, it’s well worth taking a look at Wise’s borderless multi-currency account. Free to set up, and with no monthly fee, a borderless account lets you keep money in over 40 currencies, and use virtual account details in Australian and US dollars, euros and pounds sterling - so you can send and receive money like a local in any of those 4 currencies. With consumer debit cards coming in the future as well, a borderless account could be a seriously useful way for you to save money on getting your money abroad.
However you choose to make your IMT, make sure you have the full picture before you commit yourself. Raise an eyebrow if your bank’s telling you about ‘zero fees’ or competitive exchange rates - do your research, and get a price for your transfer you’re truly happy with.
This publication is provided for general information purposes only and is not intended to cover every aspect of the topics with which it deals. It is not intended to amount to advice on which you should rely. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content in this publication. The information in this publication does not constitute legal, tax or other professional advice from TransferWise Limited or its affiliates. Prior results do not guarantee a similar outcome. We make no representations, warranties or guarantees, whether express or implied, that the content in the publication is accurate, complete or up to date.
This publication is provided for general information purposes only and is not intended to cover every aspect of the topics with which it deals. It is not intended to amount to advice on which you should rely. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content in this publication. The information in this publication does not constitute legal, tax or other professional advice from Wise Payments Limited or its affiliates. Prior results do not guarantee a similar outcome. We make no representations, warranties or guarantees, whether express or implied, that the content in the publication is accurate, complete or up to date.
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