What you need to know about online international bank transfers
How can you ensure more money reaches the beneficiary? What are the fees associated with an international bank transfer? How long does an international bank transfer take? Is this the best way to transfer my money? Here are the answers.
You need to send money abroad to pay your bills, help your family and friends, send a gift, buy a product, pay your suppliers… or for one of the other countless reasons why money needs to cross a border. Your money is sitting in your bank account but you need it to be in a different account, in another country and currency, fast! Your first reflex may be to go to your bank's website, enter the beneficiary’s bank details (IBAN, SWIFT and BIC codes) and… voilà!
But...maybe you are having second thoughts and you want to learn more about the pros and cons, including the process, the fees, the exchange rates and the time it takes?
The Pros of international bank transfers
- Your bank manages your finances already and you trust them to do so. The international banking system has been tried and tested. Your money is in safe hands.
- Your bank knows you and you don’t need to create a new account with a money transfer service.
- You're familiar with your e-banking system and you know how it works.
But there is another side of the coin:
The Cons of international bank transfers
- It’s irreversible (once it’s gone, it’s gone).
- It often takes a loooong time. Time during which the exchange rates can fluctuate to your disadvantage or advantage, but you bear the risk.
- It’s usually expensive and the fees add up quickly: transfer fees, currency conversion fees, correspondent bank fees, hidden markups on the exchange rates etc...
If you’re already convinced that you need to find better or cheaper alternatives to international bank transfers, take a look at our comparison tool:
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How long does an international bank transfer take?
International bank transfers usually take a few days. It depends on the country of origin, the destination and the banks involved. Here are some examples:
- Lloyds international transfer time: a few days in general but it varies depending where you transfer money to. It can be up to four days to Canada and up to 14 days to Kenya, for example.
- HSBC UK international transfer time: up to 4 working days
- Barclays UK international bank transfer time: 1-2 days depending on the time of transfer
- Bank of America international transfer time: 2-4 day
- RBS international transfer time: 2-4 working days
As you can see, you won’t get clarity as banks don’t like to tell you exactly how much time it will take at the time of your transfer.
What are the international bank transfer fees?
Banks usually apply three types of fees on international bank transfers.
- International Bank Transfer fee: dependent upon whether or not you pay online or in a local branch; the latter is often much more expensive. The International transfer fee is usually a flat fee (e.g. £10) regardless of the amount you’re transferring. The fees are usually described in the banking fees documents.
- Correspondent banking fees: leaving your account, the money you’re sending will usually pass through several banks before reaching its final destination if your bank doesn’t have a direct relationship with the beneficiary’s bank. You’ll usually have the choice to decide who will cover this cost: you or the beneficiary. You can also split the cost (this is the case with a transfer that goes through the SWIFT network).
- Exchange rate markup or hidden currency exchange fees: banks will often say that they convert the money you need to transfer in another currency at the “bank’s exchange rate”. This exchange rate is usually different from the current exchange rate you find on Google or XE.com. The difference, at your disadvantage, means less money on the other side and more on the bank’s pocket. Read more about mid-market rates and exchange rate markups here.
It’s usually quite complicated to calculate the total cost of an international bank transfer, and generally this is by design. Overall, transparency and honesty are often NOT a top priority in the banking and foreign currency exchange worlds. Here are a few examples: In 2015, five major banks (Citigroup, UBS, JPMorgan Chase, Barclays and Royal Bank of Scotland) were fined for conspiring to illegally adjust exchange rates in their favor. In 2018, the Wall Street Journal reported that according to its employees, American Express has a practice of quoting a good rate for small businesses customers, but then quietly raises the rate without informing the customer. And, also in 2018, Finextra, an independent FinTech newswire, reported that the UK's Financial Conduct Authority found that many currency conversion sites mislead consumers by promising exchange rates that are completely unachievable.
That’s why we’ve build Monito.com, a comparison tool to let you find and compare the fees and exchanges rates before your next transfer:
Find better alternatives to banks to send money abroad
Let’s look at some concrete examples:
RBS international fees and exchange rates
Here are the fees for an international bank transfer with RBS:
- £10 transfer for euro transfers to Europe, £22 transfer fee for the rest of the world for an online transfer with RBS Royworld Economy
- Correspondent banking fees: you can choose to pay only RBS charges, to pay all the charges or to have the beneficiary to pay all the charges.
- Exchange rate markup: a 2% to 3% markup on the exchange rate will be applied by RBS on top of the mid-market rate. You can check RBS’s exchange rate here
If you need to send £1,000 to Australia, the cost of your transfer will be £22 + £27 (2.7% currency exchange rate markup at the time of writing this article) = £49 + correspondent banking fees.
RBS total international bank transfer fees to Australia are around 4.7% to 7% of the amount you will be transferring.
The maximum international bank transfer amount you can send with RBS is £20,000 per working day.
Barclays international fees and exchange rates
Here are the fees for an international bank transfer with Barclays UK:
- If you send money online or via the mobile banking is fee-free. If you send money from a branch, you’ll be charged between £25-£40 for an international bank transfer.
- + Intermediary banking fees (or recipient fees): ranging from £4 to £50 depending on the destination country
- + Barclays' Exchange Rate Mark-up of ~2.75% according to this post by TransferWise
If you transfer £1,000 to Australia with Barclays UK online, your transfer will be fee-free, you will have the option to pay the £5 delivery fee (so that the beneficiary don’t have to) and you’ll pay £27.5 (2.75%) currency exchange rate fees for a total of £32.50 (or 3.25% of the total amount transferred).
HSBC UK international fees and exchange rates
For an international bank transfer with HSBC, here are HSBC’s fees:
- £4 transfer fees online and £9 at a branch or by telephone
- + Correspondent banking fees
- + HSBC Exchange Rate (non-transparent)
It’s hard to estimate HSBC’s international bank transfer total cost because HSBC is not transparent and does not publicly share its exchange rates. According to a This Is Money study, HSBC was the most expensive bank for foreign exchange transfers with a 6.73% total cost for a £1000 transfer to euros.
The maximum international bank transfer amount you can send with HSBC is £10,000.
US Banks fees, exchange rates explained
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