Transferring money around the world can be extremely expensive if you don't know what you're doing.
Currency specialists HiFX have some pointers on what needs to be considered when transferring funds internationally, and explain how money transfer specialists can provide exchange services more simply, efficiently, and cost effectively than banks.
While for many people, banks are the first port of call when making international money transfers, the recent emergence of global foreign exchange specialists has changed the market.
Whether you're buying or selling international investments overseas, working abroad or simply sending lump sums or regular payments home, following some simple guidelines can help ensure your money isn't unnecessarily eroded.
Beware hidden charges
When making international payments, the costs fall into two areas: transfer fees and the margin applied to the exchange rate.
Fees - Most banks charge a transfer fee to make an international payment of $20-$30. Most foreign exchange specialists charge no transfer fees for amounts over $10k and $ 10-$15 for amounts under.
Exchange rates - Banks and money transfer specialists make most of their margin in the exchange rate. While some providers claim to be "commission free", this can be misleading as the provider will always build a margin into the exchange rate and some banks can charge as much as a 5% in the rate.
Getting the most for your money boils down to a very simple question:
How much foreign currency will I get for my money after all the charges have been applied?
You need to do the comparisons, particularly when larger sums are involved.
Understanding Exchange Rate volatility
Exchange rates can change every minute, so comparisons need to be done in quick succession. It helps to have a basic understanding of how exchanges rates are determined.
Most developed economies like New Zealand and Australia have floating rates which are determined by market forces. This is influenced mainly by the trading of and demand for a country's goods and services and the activity of speculators buying and selling currencies for profit. Interest rates, inflation and government decisions also influence exchange rates. In a typical year the New Zealand dollar moves by more than20% due to market supply and demand factors.
How much can I save if I use a currency specialist rather than my bank?
On average, the amount saved by using a currency specialist can be between one and five percent on the amount transferred due to the difference in the mark up on the rate. On $100,000 this could equate to $5000 on the exchange rate alone.
Unlike high street banks, which have to set exchange rates once or twice a day, international money transfer specialists give clients access to live rates which also saves you money.
How quick is it to use a currency specialist?
Signing up to use a currency specialist is free and can be done in minutes. Transfers will in most cases be completed within a day or two and are often quicker than using a bank due to their global settlement networks.
Getting advice and finding the best deal
HiFX is the largest non bank foreign exchange specialist in New Zealand and has a team of experts who can provide you with all the help and guidance needed for money transfers. It's easy to sign up, free, can be done 24 hours a day online with benefits of no obligation quotes, fast bill payments, payment tracking , access to rate fixing options and over 800 currency pairs. You will be kept informed every step of the way and have access to your online account 24/7 and their team of experts are available over the phone Monday- Friday from 7am- 8pm.
Their security systems are world class, and the company is authorised and regulated by the Financial Markets Authority (FMA) and licensed by the Australian Securities and Investments Commission.
For more information call 0800 39 44 39 or visit www.hifx.co.nz to see how much you could be saving with HiFX.