5 Tips to follow while sending Money overseas
You can approach global payment service providers apart from banks and post offices. In addition, you can also select whether you want to transfer funds online or offline. However, it is easy to get confused as there are multiple options for transferring funds abroad.
We know that remittance is a costly affair, and currency conversion can cost you higher. It becomes difficult if you do not know the currency rates and kinds of charges involved.
Here are some factors that you should keep in mind before initiating an international money transfer.
Essential Tips To Consider While Sending Money Overseas
Ways of sending funds abroad
There are various online options, including e-transfers and power transfers. It is a web-based wire transfer that eliminates errors associated with a standard wire transfer. On the other hand, the most common offline modes are bank drafts and cheques.
However, there is no single option that can be considered best. But, you should opt for a reputed institution with established systems in place. So, you can be assured of a safe transfer.
You can be sure to check your bank that it lists the correspondent banks for offline transactions. It becomes especially crucial if you are remitting money from overseas.
You must check the foreign banks and financial institutions to make the international money transfer quickly. On the other hand, while sending money abroad, not all online options are suitable exceptions for some methods.
Speed of disbursement
If you want to transfer money fast, the only operational option is an online method. For example, those methods are wire transfer and the National Electronic Funds Transfer, NEFT system.
It primarily takes twenty-four to ninety-six hours but can take place in real-time. So, for instance, you can instantly move money through direct transfer to bank accounts.
It is operated through an arrangement with overseas correspondent banks through automated clearing house facilities in foreign countries.
A transaction by cheque can have a delay of seven to fifteen days before the holder can encash it. It is because the bank needs to verify the deposit.
However, remittances made through money orders can take from three to thirty days. On the other hand, the money transfers made through debit or credit cards are quicker and take one to four days.
You must keep in mind that most banks and financial institutions do not remit money on public holidays.
Coverage offered
We know that not all money transfer options are available at every location. For example, you can use the offline method at bank branches, and the online mode is used in urban areas.
If you are remitting money from abroad, you will have to check specific parameters. First, you have to verify if the bank covers the currency you want to transfer. Generally, currencies like the US dollar, pound sterling, and euro are remitted by all banks.
However, you can remember that all banks avoid routing money through foreign currency cheques. So instead, a practical option for NRI is the foreign currency account scheme.
The currency in which the account is dominated covers all freely convertible foreign currencies.
Cost of service
Before you select a mode of transfer, consider the cost you have to give for the service. We know that there is an inverse relationship between the cost and speed of money transfer.
According to the survey, an international wire transfer is costlier than drafts and cheques. While the cost of sending up to five hundred US dollars from the US to India through wire transfer. It is less than one to five percent of the funds transferred.
On the contrary, the comparative rates for demand drafts or cheques are two percent of the remitted amount. Furthermore, money transfer services like Western Union charge a higher commission, nearly twenty-five to thirty percent more than banks.
Calculating the best rate
The money transfer service providers keep a nominal fee on the foreign currency that you want to transfer. Therefore, the affordable price can vary between point five to three percent between different service providers.
You can visit any bank, and you can easily find out their card rate. But, unfortunately, it is higher and has a mark-up between one point five and four percent. Indeed, try an online marketplace that will execute your transactions through their banking partners at a lower rate.
Their model is like that they get a preferential and wholesale rate from their partner banks.
Conclusion
We have listed the helpful tips to consider while sending money abroad. Indeed, you can get to know about essential factors involved in the transaction process. However, you can save time and money after following the valuable tips for sending money overseas.
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