Australians are feeling price pressures, with consumer prices surging at the fastest annual pace in more than two decades. With disposable income expected to continue to drop, many Australians are looking for ways to make their money go further. One area not to be overlooked is international money transfers. Many Australians regularly send money overseas, either to aid families in other countries, to send gifts of money, or to pay suppliers as part of the business. The fees and exchange rates can vary considerably, increasing the fees on a transfer significantly.
Below, I share 6 tips for reducing costs when aiding family overseas:
- Transfer money at the right time. Choose the best time to transfer money as currency rates fluctuate up to 1 per cent daily – particularly now with inflation and rate hike expectations. As it can be difficult to predict, money transfer services offer ‘rate alerts’ that enable you to pick the most cost-effective day and time for a transfer.
- Avoid money transfer fees. With many international wire fees starting at $35 and only going up from there, they can add up to a significant extra expense. The Australian Competition and Consumer Commission found that banks are consistently more expensive than foreign cash suppliers and international money transfers. I suggest utilising money transfer services as they often render extremely cost-effective deals, with some services such as Torfx and SendPayments offering $0 transfer fees. Money transfer comparison tools can find the best low fee transfer deals to ensure that your relatives get the most out of what you send them.
- Buy goods from overseas e-stores. If you are planning to send parcels to your family overseas, I encourage you to research whether you can purchase the item in a store from their home country. Purchasing products from local websites will drastically cut shipping costs and the parcels will arrive faster. Import taxes and duties may cost you or your relative up to 20 per cent of the parcel’s worth, therefore shipping goods locally is an effective way to avoid these extra costs.
- Find affordable international shipping. The best international shipping deals can vary between parcel sizes and international destinations. I suggest using a courier comparison service to assist you in finding a delivery partner that best suits your needs and your budget.
- Choose the best currency for overseas payments and transfers. United States Dollars are widely accepted as a form of currency in some countries, such as Thailand, Mexico and India. If there are multiple currencies accepted in the country you are transferring money to, I recommend transferring to a different currency as it may be cost-effective, depending on the exchange rate. As a rule of thumb, it is more cost-effective to exchange into the major currencies, such as USD or EUR, rather than currencies from emerging or developing economies such as Thai Baht.
- Make a few transfers, with larger sums. Consider less frequent, larger transfers or payments. Many currency transfer systems offer better rates or will allow you to negotiate a better rate for a larger sum of money.
Written by: By Alon Rajic
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