Nedbank International Payments: Transfer Fees, Exchange Rates, and Alternatives

One of Africa's fastest-growing banks, Nedbank is a well-known Sandton-based financial services giant with a long history and a vast reach. Today employing over 31 thousand people and handling over a trillion rands' worth of assets, Nedbank is without a doubt one of the largest and most prominent players in the Southern African banking sector.

Nedbank is one of the few companies in South Africa authorised by the South African Reserve Bank (SARB) to handle foreign currency exchange. This means that, while it's possible to send wire transfers from the South African rand into foreign currency bank accounts abroad, the service comes at a hefty cost. This was borne out by Monito's analysis of Nedbank's exchange rates and transfer fees, which found that the total cost of a R1,500 wire transfer amounts to around 25%, with the bank gradually becoming more and more affordable the larger the transfer amount.

Nedbank International Payment Fees

To make an international payment with Nedbank, you'll need to send a wire transfer using your online or mobile banking profile to get the job done. This means that Nedbank will wire your funds over the SWIFT network to reach its destination in a foreign country and currency.

Nedbank charges a combination of commission fees and fixed fees for these types of transfers. Take a look at the two separate fees that you'll pay per transfer below:

• A 0.66% commission levied at a minimum of R179.01 per transfer and capped at a maximum of R900.03 per transfer;
• A R125 communication fee on every transfer.

If you're making a transfer to an African bank account that's part of the Ecobank network, you will be charged the following fees instead:

• A 6.5% commission if the receiving currency is in US dollars;
• A 4.5% commission if the receiving currency is in the local currency.

Nedbank Exchange Rates

Looking at the transfer fees on your Nedbank online banking profile, it might seem like the above commission and communications fees will be the only costs when sending money internationally.

Unfortunately, this is not the case!

Over and above the fees we explored above, you can also expect to pay an exchange rate margin on every international money transfer that you make. In effect, this means that Nedbank will pocket a hidden slice of the funds you send by offering you an exchange rate that's poorer than the one that banks use to trade between one another (which is known as the mid-market exchange rate.)

At Nedbank, these exchange rate margins vary significantly from currency to currency. For example, transfers to Namibia, Lesotho, and Eswatini have no exchange rate margin, as the currencies of these countries are pegged to the value of the South African rand. On the other hand, transfers to one of the three major world currencies (i.e. the British pound, the US dollar, and the Euro) have exchange rate margins around 2.5% of the total transfer amount, while transfers to countries such as Botswana, Singapore, and Thailand can have exchange rate margins that soar well above 5%!

Nedbank Total International Transfer Fees

Considering that you'll be paying (1) a commission, (2) a communications fee, and (3) an exchange rate margin on every international money transfer that you make abroad with Nedbank, the costs of these transfers stack up very quickly.

Suppose, for example, that you wanted to wire R2,500 to a company in the Netherlands to pay for a new service that you liked. After paying the R363.90 in total fees (R304.01 in service fees and R59.89 in exchange rate margin fees), the currency conversion would be made and the Dutch business would receive €113.53 on the other end.

Contrast this to making the same transfer with Skrill, a London-based money transfer service available to South Africans that was the cheapest for this transfer on Monito's comparison engine at the time of writing. With Skrill, you'd pay no service fees and R50.50 in exchange rate margin fees, leaving the business with €131.24 on the other side of the transfer.

While both Nedbank and Skrill do give you the option of specifying exactly how many euros you'd like your beneficiary to receive rather than only the rand amount, the above example does nonetheless serve to illustrate the high costs of making smaller transfers with Nedbank. It's well worth adding that, at larger transfer amounts, the bank's service gradually becomes more and more reasonably priced, however.

To get a better sense of how these fees are charged and what you might expect to pay when you send money abroad with Nedbank, take a look at the table below:

Other Nedbank International Transfer Fees

When all has finally been done and dusted with your international payment, you may notice that you were charged more fees still. Over and above the costs we discussed above, Nedbank may charge you the following fees, depending on your circumstances:

• A R280 incorrect instructions fee if you filled in the banking details of your beneficiary incorrectly and need to amend them at a later stage;
• A R10 payment tracker fee if you request to track the status of your transfer;
• A correspondent bank fee that can range anywhere between R150 and R1,500 if Nedbank doesn't manage to successfully wire your funds directly into your beneficiary's bank account and needs to rely on a correspondent or intermediary bank.

Also, it's a good idea to know your Balance of Payments (BoP) code. Whenever you transfer funds out of South Africa, you'll be required by SARB regulations to declare the reason for your transfer in the form of a three- or five-digit code. The most common codes for ordinary international transfers are:

• 256 for buying foreign currency for a holiday.
• 416 for sending home migrant remittances.
• 401 for sending funds abroad as a gift.

How to Transfer Money from Nedbank

There are a few ways you can make a payment to a country overseas with Nedbank. We've ranked them in order of cost, with the first being the cheapest and the last being the most expensive:

1. WorldRemit via Nedbank Online Banking: By signing up with WorldRemit (the cheapest digital transfer service from SA on our comparison) you can send money across the globe by making a transfer via your Nedbank Online Banking and the WorldRemit online platform. This method will generally cost only a total of 2% to 3% in fees depending on the currency you're sending to.
2. Nedbank Online Banking/Money app: You can send an international payment to a foreign currency bank account directly from your e-banking or mobile banking app. Sending abroad using this method costs between 3% and 10% depending on the currency and the amount you send.
3. Emailing a transfer form: Another method is to email a completed transfer application form to Nedbank (specifically, to servicedeskpayments@nedbank.co.za). Like sending online, sending abroad using this method costs between 3% and 10% depending on the currency and the amount you send.

Receiving Money From Overseas in South Africa With Nedbank

While Nedbank makes receiving money from overseas in South Africa very easy, it's nevertheless almost as expensive as the other way around. To receive a wire transfer from an international bank via SWIFT, Nedbank will charge the following fees:

• 0.62% (charged at a minimum of R150.13 and a maximum of R747.02) for amounts over R2,000.
• R97.63 flat fee for amounts under R2,000.

When receiving international payments, the Nedbank bank address for international transfers you should provide should always include:

1. Your full name;
2. Your bank account number;
3. The Nedbank SWIFT code: NEDSZAJJ;
4. The Nedbank clearing code: 198 765.

It's very unlikely that the international bank instructing payment to Nedbank will require other information, including your account type, branch, and branch code (this information is usually only relevant to domestic EFTs in South Africa).

Finally, when your money's on its way from overseas, Nedbank will contact you to complete a SARB Reporting Mandate Form. This is an obligatory step for all South African recipients of foreign exchange, requiring you to fill out a few personal details and declarations via an online form before the transaction is settled into your account.

Is Nedbank Good for International Payments?

While the bank's international wire transfer fees can be very expensive, this shouldn't detract from the fact that Nedbank is an all-round excellent bank that you can certainly rely on as an everyday banking partner. If you don't mind paying a little bit extra to send money from South Africa, then sticking with Nedbank might well make sense for you.

That being said, however, if you're somebody who's looking to save money on every transfer that you send abroad, then we'd strongly recommend that you consider your options more closely. If you'd like to find the best deal on overseas transfers, then a low-cost money transfer specialist service, such as CurrencyFair and WorldRemit, will be your best bet. These services — which offer high-speed transfers and transparent pricing — make use of a savvy network of global bank accounts to trade at exchange rates that tend to be much better than those of banks. Run a search on Monito's real-time comparison engine to discover exactly what these services can do for you.