Monday, June 1, 2015

Cut Costs on International Fund Transfers

Hi _______,

I know you sometimes need to send money internationally.  I do too, because of my business (though not as frequently as you do, probably).  I wanted to let you know a few things I have learned this year about international fund transfers.

In addition to the fixed wire transfer fee that banks charge up front, banks also have a hidden way of making more money on international wire transfers.  They slightly tweak the exchange rate in their favor.  So, for example, if the official exchange rate is “1 dollar = .91634 Euros”, the bank might set theirs at “1 dollar = .90873 Euros”.  This is a normal, accepted practice, not something illegal.  However, it means that you have to send more dollars to equal the number of Euros (or whatever the destination currency is) that you’re trying to send.  It is in effect a hidden fee to the transfer. 

I have found two online fund transfer services that have much lower fees and higher exchange rates than my bank.

One is TransferWise.  
The other is a branch of Western Union called Online FX.

I don’t know the details about your international fund transfers so I don’t know for sure if these services are available in the currencies and quantities you send.  But if these services work for you, I’m pretty sure that they would cut down your costs quite a bit.

Grace and peace,


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