Large amount transfers for South Africans

The South African financial sector is dynamic and rapidly expanding, offering numerous opportunities for local and international financial transactions. For expats arriving in South Africa, the process of navigating banking options can initially seem complicated. Whether you’re establishing a new life or managing global finances, understanding the mechanisms for transferring money to and from the country is vital.

This article gives detailed information to those who need to transfer significant amounts both into and out of South Africa, and introduces some alternatives, such as Wise.

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What is considered a large transfer in South Africa?

South Africa has specific guidelines on large money transfers for both residents and non-residents. If you are a resident of South Africa and in possession of a green barcoded ID or Smart ID card, you can transfer up to R1 million⁵ per year under the Single Discretionary Allowance. This amount can be transferred without prior approval from the South African Revenue Service and can thus be easily used for personal or financial needs.

For larger transfers, the Foreign Investment Allowance (FIA) permits an additional R10 million annually⁵, though this requires prior clearance from SARS. You’ll need to provide a valid tax clearance certificate, be in good standing with SARS, and hold an active tax number. This process also involves submitting supporting documentation, such as proof of the source of funds and a statement of assets and liabilities.

There are fewer restrictions for a non-resident of South Africa; one can transfer any amount of money out of the country, but you need to show the source of such money. If you are a resident looking to switch to non-resident for tax purposes, you should begin the tax emigration process as required by regulations in order to remain compliant.

How to transfer a large sum of money to South Africa?

Transferring large amounts of money intelligently requires a balance of methods, costs, and regulatory compliance. Following are the major options⁶:

• Banks for International Transfers

Banks have conventionally been used as a means of international money transfers. They provide familiarity and security, especially when the need for such transfers is occasional. Bank transfers have higher fees associated with them in the form of exchange rate margins¹⁸ and service charges¹⁹.

• Currency Brokers

Currency brokers are specialists in handling international money transfers and are often the preferred choice for large amounts (e.g., over £2,000 or R50,000). Brokers typically offer better exchange rates than banks and lower transaction fees¹⁹. They also provide personalized assistance for specific challenges.

• Online Transfer Applications

For those looking to get the process done quickly in an easy way, one may opt for online transfer applications. Generally, online transfer applications have low fees and attractive currency exchange rates.

In addition, applications such as Wise can enable people to transfer funds at the mid-market exchange rate while keeping fees minimal. Wise also focuses on customer experience with its dedicated team to guide you through making large transfers as well.

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Important items to consider during the transfer of large amount of money internationally⁶:

Exchange Rates AND Fees:

The exchange rate margin and transfer fees can really affect the total cost of your transaction.Generally speaking, bankers are willing to pay a certain price for a currency, and they’re willing to sell it for a certain price. The midpoint of these prices is the mid-market rate. This is used by applications like Wise and is known as the fair rate available in the market18.

Documentation:

Proof of income or source of capital is especially needed in the case of large transfers and those under FIA⁵. Failure to comply will only lead to delays or possibly even rejection of your transfer request.

Processing Time:

Generally speaking, international bank transfers take around 3-5 days depending on the service used and the method employed¹⁶. In some cases, when transferring via credit or debit cards through online apps, it can be the same day.

Transparency in Pricing:

The online exchange rates are often interbank rates, and as such, are not available to individual customers. Providers such as Wise on the other hand, offer the mid-market exchange rate and transparent fees quoted before money transfer, ensuring you know exactly how much you’re paying.

Use Wise for large amount transfers to South Africa

If you’re living in South Africa, Wise can help you save money¹ when making international money transfers to South Africa.

Although the majority of banks may allow their account holders to make an international transfer, it is possible that a markup is added to the mid-market exchange rate. It is recommended to check the exchange rate offered by your bank against the mid-market rate, which is similar to the exchange rate shown on Google. Say no to hidden fees!

The mid-market exchange rate is the rate that banks use to transfer money between them and is considered a fair market rate. Find out what you would pay for an international money transfer with Wise:

Wise customers don’t have to pay an additional markup fee but only a small transparent fee to make an international transaction¹. That’s because Wise uses the mid-market rate for overseas payments!

How long do large transfers take in South Africa?

Transferring large sums of money in South Africa can take between 1-3 business days on average¹⁶. Transfers from popular currencies like the GBP, Euro, and Dollar tend to clear quicker than lesser-known ones. If you are expecting a foreign payment you might need to verify the reason for transfer for security reasons. Only after your confirmation will the bank convert the amount to ZAR.

What's the maximum transfer limit for prominent South African banks?

The maximum amount that can be transferred depends on the bank and the method of transfer. The table below shows the daily limits for some of the most well-known banks in South Africa:

For larger amounts, it will be necessary to visit a branch, as branch services often allow larger transactions. However, additional documentation may be required, like proof of the purpose of the transfer.

How to Ensure a Smooth Transfer Process Plan Ahead:

Large transfers require all the paperwork to be in order, especially with the usage of allowances such as the SDA and FIA⁵. Many times, delays happen due to incomplete paperwork or unapproved sanctions.

• Compare Providers: You want to shop around to get the best combination of exchange rates and fees. Quite often, brokers and apps offer better value than banks on cost.
• Understand the Regulations: Familiarize yourself with the SARB rules, especially in case of funds transfer out of South Africa. Following the due process will save your time and prevent penalties.
• Understand the Tax Implications: In case you are a resident of South Africa and are transferring money internationally in large amounts, understand the implications for tax purposes. Consult a tax consultant to go through the process with you to minimize your liabilities.

With the right preparation and understanding of the available options, transferring large sums of money to and from South Africa is quite doable. Residents of South Africa have access to both the Single Discretionary Allowance and the Foreign Investment Allowance, while non-residents have fewer restrictions, provided they can prove the source of the funds.

With a little planning, comparing your providers, and considering all the South African financial regulations, you can ensure transfers that are efficient, secure, and cost-effective. Whether moving money for personal reasons or handling global finances, knowledge of your options will enable you to be confident in the process.

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Sources:

1. Please see Terms of Use for your region or visit Wise Fees & Pricing for the most up to date pricing and fee information.
2. Transaction speed claimed depends on funds availability, approval by Wise’s proprietary verification system and systems availability of our partners’ banking system, and may not be available for all transactions.
3. Eligibility is subject to verification of customers identity. Wise may request additional documents to verify a customer's identity.
4. Please note that certain products or features may not be available in all regions. Please visit www.wise.com to check for availability and learn more about our offerings.
5. Allowances by Reserved Bank
6. Ways to transfer large sums
7. Nedbank transfer time
8. Capitec transfer time
9. Absa transfer time
10. FNB transfer time
11. Standard Bank transfer time
12. Nedbank transfer limit
13. Capitec transfer limit
14. FNB transfer limit
15. International transfer times
16. Currency brokers
17. Mid-market exchange rate
18. Service Fees