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Sending Cash Overseas

Written by
Amber Hobert
Published on
July 9, 2024
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Every year, millions of Americans send billions of dollars abroad for business or personal reasons. Sending money over international borders can be a hassle, whether the money is sent for loved ones or used to make an international investment. There are different ways to move money from the United States to another country. This article will discuss how you can move your money overseas. Let's get started!

How To Send Money Abroad

Here are the five common ways you can use to move your cash overseas:

Method One: Wire transfers

You can transfer vast sums of cash from one bank account to another by wire transfer. The paperwork for these transfers is filled out by a bank employee at the bank receiving the money. The majority of wire transfers for money must be completed in person. There is also a price for this service, but the protection offered by the institutions involved makes the fee worthwhile.

US residents must start wire transfers by 17:00 hrs. if they want the transaction completed on the same day. Wire transfers are a straightforward method for sending money or paying bills to a recipient whose bank differs from yours. Currently, international wire transfers settle within a few days, and domestic wire transfers often settle on the same day.

Unlike paper checks, they are less likely to be misplaced or lost in the mail. Moreover, they are dependable. You can only make a wire transfer if the sender has enough funds in their account, whereas checks can bounce. Nonetheless, there are a few drawbacks. Typically, banks charge a flat fee ranging from $15 to $50 for wire transactions.

Especially for smaller transactions, this can consume a substantial portion of the funds sent. In addition, some banks impose a daily wire transfer limit. Also, advances in fintech have made it possible to use other methods that may be even quicker than wire transfers. Platforms such as PayPal, Stripe, and Venmo make it possible to send and receive money internationally or locally faster and for less (or no) cost than a wire transfer.

Method Two: Automated Clearing House (ACH) transactions

ACH transactions, like wire transfers and bank-to-bank transfers, are done electronically. However, an online clearing house is used as a middleman to handle the exchange of funds. There are no fees for these exchanges, but they require a link between the two institutions.

Each party must follow its own bank's protocol for completing this process. Because the ACH Network groups and processes financial transactions at specific times during the day, it makes online transactions very fast and easy. According to NACHA rules, most ACH debit transactions settle within one business day, while most ACH credit transactions settle within one to two business days.

In the past few years, ACH transfers have made it simpler and cheaper for people to send money directly from their bank accounts through direct deposit transfers or e-checks. Alternatively, certain banking companies may limit the total amount of money you can transfer. It may be necessary to complete a considerable transfer in numerous phases.

For example, sending money to your college-bound child may be limited to a maximum transfer amount of $1,000. You'll have to send more than one transfer if they want more money for other expenses. If you usually do a lot of transactions, this could significantly affect the overall transaction cost.

Method Three: Prepaid debit cards

A few services permit money transfers with prepaid debit cards. If you choose this option to send a large amount of money, the sender can put cash on a prepaid debit card, and the recipient can use the card to get the money.

In some cases, you can utilize a prepaid card to make purchases in the same manner that a credit card can. In most cases, however, there is an initiation or monthly fee.

Method Four: Interbank transfers

Some banks permit people to transfer money directly from one account to the next. Depending on the bank you use, you may have to pay a fee, and both the sending and receiving banks' accounts and routing numbers are needed.

Some banks may offer specialized remittance services to transfer relatively modest sums. In situations like this, checking the exchange rates is essential because the institution may be making money from the transaction fee spread even though there is no fee.

Method Five: Money-to-Money transfers

A person can use domestic, walk-in money transfer facilities to transfer a large amount of cash to an international money transfer center if they need to move that cash abroad. Western Union, MoneyGram, and Ria are the traditional service providers for this type of transaction.

In recent years, more fintech companies have begun offering international money transfers. Wise, Payoneer, PayPal, and WorldRemit are well-known companies in this business.

One of these money transfer locations accepts deposits of physical currency. The local currency is changed to the destination country's currency, and the beneficiary can pick up the funds at a money transfer center. You can send money to a residential or commercial address in some nations.

Factors To Consider When Sending Cash Overseas

When you're sending cash overseas, there are a few things you need to factor in to make sure your money arrives safely. There are copious scams out there, so you need to be careful. Sending cash overseas can be a bit daunting, but as long as you research and take the necessary precautions, it's a safe and easy way to get money to your loved ones. Below are some factors you must consider when attempting to send money overseas.

Transfer charges

Wire transfer fees are one of the two main things that add up to the total cost of a transfer, which can vary a lot between money-transfer services. Looking at the numbers, the average cost of sending a wire transfer overseas for the top ten largest US banks was $47.50. This cost ranged from $40 per transaction at TD Bank and Citibank to $65 at BB&T.

You may be tempted to choose the option with the lowest transfer price, which is what many people do. However, the fee should be one of many factors you consider when determining the cheapest way to send money.

Currency exchange rate

The second consideration is the exchange rate. However, selecting the most attractive rate might be challenging because it swings continuously. There is a misperception that all financial institutions must give the exact exchange rate. Beforehand, many financial companies made most of their money from clients who didn't know what they were doing.

Federal consumer protection laws went into effect in February 2013 to ensure that the exchange rate is managed and shown to US customers more openly. These laws are meant to stop unfair behavior and make the process more open. Even though you won't know the actual rate for the transaction until you start a wire transfer, you'll get all the information you need before you finish the transfer.

To find the best deal, you should weigh both the wire transfer cost and the exchange rate. The exchange rate's hidden fees can significantly affect the total sum of money you get at the end of a transaction, especially if the sum in question is significant.

Account type

You should consider whether you operate the type of bank account or other financial accounts that may let you send money internationally for free or at a low cost. For example, some banks may let you send money internationally for free if the transfer is between accounts at the same bank. International branches and wire transfers between US and non-U.S. accounts are complimentary.

If you frequently transfer money between people in different countries, opening an account at the same bank as the sender or receiver may be advantageous. Online payment options, such as PayPal, can also be a cost-effective way to send money worldwide if you and the recipient have access.

Transferred sum

The amount to be moved is also a factor in determining the cost of the service. Each service provider has its own restrictions regarding the transfer of various sums. Because banks charge a set fee, bank wire transfers can be advantageous for transferring larger quantities of money, often between $1,000 and $5,000.

On the other hand, certain money transmitters, such as Western Union and MoneyGram, charge based on the total amount of money you wish to transfer; the more money you want to wire, the more you will be charged. Therefore, smaller transfers, such as those under $1,000, are typically the most cost-effective alternative.

Beware of money transfer services that promise to send large sums of money at a low cost. They do this to attract customers. When sending tens of thousands of dollars internationally, a lower transaction charge will not be sufficient to balance the additional amount you would spend due to high exchange rates.

Talk To An Expert Before Sending Cash Overseas

In this short article, we talked about some ways to move money overseas. We also provided guidance on what to consider before settling on any option. Transferring money abroad can be complicated, so you should weigh all your options to find the best one. Also, consider speaking to your financial and tax experts to get advice on moving your cash abroad without incurring so much cost.

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