International Bank Transfers

International Bank Transfers: Fees, Exchange Rates, and Alternatives

Banks are a fundamental part of modern life. In the twenty-first century, more people than ever before have access to their own bank accounts, which they rely on for managing their day-to-day finances such as making and receiving payments, saving money, and even loans.

It's therefore understandable the bank may seem like the logical place to go when sending money internationally. However — while most banks offer international transfers to customers — bank charges for sending money abroad tend to be pricey (often exorbitantly so). Ultimately, due to the multitude of wire transfer fees involved, this leaves the bank seldom the cheapest option to send money abroad. This is exactly why we recommend low-cost, savvy online providers like Remitly to send money internationally instead of going through the bank.

This guide explores the typical bank charges to send money abroad before comparing the cheapest alternatives. Then, we go through the top tips for saving when sending money abroad to help you minimise the costs of your next transfer.

How To Make an International Bank Transfer

Before we delve into bank charges to send money abroad, let's examine the types of services banks offer for international transfers.

When sending money, practically all banks allow customers to send everyday bank transfers within the same country and currency. This is done via country-specific clearinghouses or interbank networks (e.g. via ACH in the US, CHAPS in the UK, Interac in Canada, etc.).

For international payments, on the other hand, things work slightly differently. These involve a different service, international wire transfers — the delivery of funds from one currency to another via SWIFT. These transfers take longer and involve several bank charges (which we'll explore later), generally making them less fast, cheap, and convenient to customers than domestic transfers.

Making an international bank transfer is a simple and secure process for most banks. It can be done by visiting your bank's website or mobile app to verify what information you'll need from your beneficiary to process a bank wire. These generally include most or all of the following pieces of information:

• The beneficiary’s full name;
• The beneficiary's postal address;
• The beneficiary's account number;
• The beneficiary bank's branch number and full address;
• A SWIFT, BIC, or IBAN.

With these details at the ready, you'll be able to log in to your online banking portal and instruct an international wire transfer directly from there. Alternatively, you can also visit your bank branch to send a bank wire, although this service tends to come at a steeper price.

To learn more about how to make a bank wire transfer, take a look at Monito's guide here.

International Bank Transfer Fees

One of the significant drawbacks of making an overseas bank transfer is the costs involved. While precise fees vary from bank to bank, two types of costs are applied: wire transfer fees (which can include correspondent and intermediary bank fees, as we'll explore later) and exchange rates.

International Bank Conversion Fees

Because the sending bank imposes wire transfer fees, bank charges for sending money abroad vary significantly not only from bank to bank but also from country to country:

US banks, for example, tend to charge a single, fixed fee for international bank wires that usually falls between USD 25 to USD 45 per transfer. In Canada, transfer fees vary dramatically (generally falling between CAD 5 and CAD 30 or higher per transfer) and tend to be steeper the more one wires.

In the UK, high-street banks often advertise themselves as being "fee-free" for international wire transfers, although it's quite common for them to charge up to GBP 20 for transfers to certain countries. Across the globe in Australia, these fees range between AUD 6 and AUD 30, while neighbouring New Zealand bank charges for sending money abroad hover between NZD 10 and NZD 20 per transfer.

In South Africa, international bank transfers involve a commission of around 0.5% of the transfer value (with minimum and maximum caps) and a fixed fee, usually between ZAR 100 to ZAR 200 per transaction. Similarly, most Singaporean banks also charge a commission for telegraphic transfers (usually in the region of 0.125% of the transfer value) in addition to a fixed fee of SGD 20 to SGD 30 per transfer.

International Bank Exchange Rates

Bank charges for sending money abroad also involve another major cost: the exchange rate margin. This cost is the difference between the mid-market exchange rate and the exchange rate offered to consumers. It is charged by practically every bank around the globe, even if it's not displayed transparently.

Exchange rate margins fluctuate continually and follow broader dynamics in the foreign exchange market, making them hard to pin down. However, for most banks, exchange rate margins tend to range from as low as 1.5% of the transfer value to as high as 15% or more at the extremes. (It's worth noting that exchange rate margins tend to be lower for transfers to major world currencies and higher for transfers to more obscure or volatile ones.)

Exchange rates are often levied proportionally to transaction fees to account for the total cost of making an international wire transfer. For example, UK banks tend to charge most (usually all) of their fees as exchange rate margins, and as a result, their margins are high (often around 8% to 10%) while their transfer fees are low or nonexistent. On the other hand, Singaporean banks tend to levy a bulk of their international transfer fees in fixed and commission fees, resulting in higher fees and lower exchange rate margins. US and Australian banks tend to be somewhere in the middle.

Bank Charges for Receiving Money From Abroad

In addition to fees for sending money abroad, many banks also charge a separate set of fees for receiving money from overseas. These can either be charged as one or both of the following:

• Transaction fee: A fixed or commission fee levied per wire transfer received into an account. The amount is typically debited automatically in the receiving currency (e.g. Barclays in the UK charges a GBP6 fixed fee per transfer received from outside SEPA).
• FX margin: If the amount sent isn't exchanged by the sender and arrives into the receiver's account in a foreign currency, the receiver's bank will exchange the funds at an exchange rate that's poorer than the mid-market rate.

What Extra Costs Do Banks Charge for Sending Money Internationally?

Unfortunately for senders, there are many bank charges for sending money abroad — many of which go beyond the standard fees and exchange rates we explored above. These include the following:

Correspondent Bank Fees

A notorious fee in the world of international banking, the correspondent bank fee comes into the picture when banks don't have the networks or resources to conduct financial transactions directly to all other banks across the world. In these cases, they use another type of financial institution, known as a correspondent bank, to get the job done.

Correspondent bank fees are not universal, meaning not every overseas transfer you make will incur one. However, when they do come into the picture, they tend to be quite expensive, usually in the range of USD 10 to USD 100 per transfer (or currency equivalent).

Other Service Fees

Banks commonly also charge additional fees when customers wish to instruct wire transfers in-branch or over the telephone. These usually come in the form of higher fixed fees, making bank charges for sending money abroad significantly more expensive, especially for smaller transfer amounts.

Best Banks for International Wires

The best banks for international wire transfers depend largely on your country and, to a lesser degree, the country you'd like to send money to. In general, however, the best banks for sending international wire transfers by country are the following:

• The US: Citibank
• The UK: Bank of Scotland, or its subsidiary Halifax
• Australia: NAB
• Canada: Scotiabank
• New Zealand: Kiwibank
• Singapore: DBS (especially its remittance service DBS Remit), or its subsidiary POSB
• South Africa: Absa

Cheaper Alternative for Money Wire Transfers

Due to the high bank charges for sending money abroad, Monito's experts tend to recommend against using banks to send money internationally, especially for people who'd like to save money on every transfer. (For people who feel safe with their bank and don't mind paying extra fees, sticking with the bank is probably the best bet).

 Instead of using the bank, we recommend comparing money transfer specialist services to get the job done quicker and more cheaply. While you won't be able to dodge wire transfer fees entirely, you will be able to take advantage of faster payments and lower costs in general. Take a look at Monito's in-depth guide to learn more about the difference between money transfer specialists and banks for overseas payments.

To get a sense of how the top money transfer services on Monito compare to banks, take a look at Wise, Remitly, and Paysend below:

1 — Wise

London-based fintech Wise is a world-class option for sending money internationally and frequently ranks as the cheapest way to transfer money internationally on Monito. According to the Monito Score, Wise is also ranked as the best money transfer service of all, and its mobile app is ranked the best money transfer app.

Cost: Wise charges a mix of fixed fees and commissions for different corridors, which usually constitute between 0.25% and 1.00% of the total transfer value. Wise was the cheapest service on 21% of global comparisons on Monito between July 2020 and 2021.

Coverage: Available in the EEA, UK, US, Singapore, Japan, Australia, and New Zealand, Wise supports transfers to around 57 foreign currencies across the globe.

Recommendation: We recommend Wise, especially for small- to medium-sized bank transfers (up to USD 10,000) destined for international bank accounts, as the platform is particularly well-priced for these transfers.

Best for: International transfers to a bank account.

More info: See our full Wise review or visit their website.

2 — Remitly

Remitly is a US-based digital remittance service that's frequently the fastest and cheapest way to send money internationally on Monito. The platform offers various pay-in and pay-out options (including card payments, bank transfers, and cash services) and supports money transfers to over 85 countries worldwide.

Cost: Remitly's fees are built into the exchange rate and typically range between 0.50% and 2.00% of the international money transfer value, depending on the currencies in question. Remitly was the cheapest service on 20% of global comparisons on Monito between July 2020 and 2021.

Coverage: Available in Europe, North America, Singapore, and Australia, Remitly supports transfers to around 47 currencies on every continent.

Recommendation: Because of its speed and pricing for cash-related transfers in particular, we recommend Remitly for sending money for cash pick-up and cash home delivery services.

Best for: Transfers for cash pick-up.

More info: See our full Remitly review or visit the website.

3 — Paysend

A true specialist in international card payments, Paysend is a flexible and fast-growing money transfer platform that supports credit and debit card payments to an impressive network of nearly 100 receiving countries through various pay-out options.

Cost: Paysend charges a fixed fee for most card-to-card and card-to-Paysend-wallet transfers and an exchange rate margin of between 0.50% and 2.00% of the international money transfer value. Paysend was the cheapest service on roughly 25% of global comparisons on Monito in May 2021.

Coverage: Paysend is available to residents of 49 countries and supports transfers to 90 countries across the globe.

Recommendation: We recommend Paysend for international card payments to credit cards, debit cards, or bank accounts due to its excellent fees and exchange rates for these types of transfers.

Best for: International card transfers.

More info: See our full Paysend review or visit the website.

How To Save Money On International Bank Transfers

While you won't be able to avoid costs entirely, there are still several tricks to avoid bank charges for sending money abroad and minimise your costs by finding the cheapest way to send money internationally. These include the following:

• Open a bank account that doesn't charge additional fees for international money transfers;
• Avoid credit or debit cards to fund your money transfer;
• Avoid high-street banks and PayPal, which are practically never the cheapest way to transfer money internationally;
• Send money to a bank account or mobile wallet rather than a cash pick-up location;
• If exchanging money for physical cash banknotes, avoid bureaux de change and banks;
• Choose a longer transfer speed when it reduces overall fees.

To simplify your research, Monito has reviewed and compared hundreds of money transfer services and bank charges to send money abroad. You can compare them all in real-time using our award-winning comparison engine below —