- Remittance Companies
- Commercial Banks
- Credit Unions
- Travel Agencies
- Guest Worker Remittances
- Informal Funds Transfer (IFT) Services
- Methods to Send Money Abroad
- Fees, Limits and Exchange Rates
- Tips and Questions When Sending Money Abroad
Fees, Limits and Exchange Rates
Sending money abroad is a financial transaction. As with any financial transaction you’ll want to know in detail, upfront, what fees you will have to pay for the service and what limits or conditions there are on the transaction. Let’s look at some possible fees, limits and exchange rate issues when you’re sending money abroad:
The fee to send money abroad can vary depending on:
- what service you choose (i.e. draft, wire, international money order, remittance)
- what service provider you use (i.e. bank, check cashing store, credit union)
- how much money you’re sending
- how quickly you want the recipient to be able to access the funds
Service providers will either charge a flat fee or a “step” or sliding scale fee.
Depending on the service provider and type of service you choose, there may be a minimum and maximum limit on the amount of money you can send abroad or the amount of money the recipient can withdraw from your designated account.
Banks or stores may also have per person and per month limit on the number of wire transfers, drafts or remittances you can make.
The country where you are sending the money may impose certain fees, taxes or restrictions on money being sent into the country. These restrictions, taxes and fees may be taken directly out of the money you are sending, which may significantly reduce the amount of money your recipient receives. Before sending money, check to see if the country you’re sending money to charges a fee and if so, how it is paid (i.e. can you pay the fees upfront in cash or by check or do they take it out of the money you’re sending?)
In most countries the money that you’re sending from the U.S. will be changed into the local currency for your recipient. In order to determine the amount of local currency that your dollars represent, companies will use an exchange rate. It’s important to know what exchange rate you will get when sending money abroad.
Most people look at the officially published exchange rates when comparing rates between companies, but that is the rate used between banks for transactions of $1 million and more. You will get a more accurate picture of the exchange rate if you compare rates between service providers. Ask a handful of companies/stores specifically what the exchange rate is for sending the amount you want to send to your desired country. Many stores/companies will quote you a lump sum for transferring your money. Ask specifically for them to break down what the exchange rate is and what fees they charge for their services.