Making an international bank transfer is straightforward once you understand the process.
An international bank transfer is when you send money from your bank in one country to a bank account in a different country. It is the same thing as an international money transfer.
If you need to make an international money transfer, you can either use a bank or a money transfer company.
I will explain how the process works, how long it takes, the best way to avoid bank fees, and the best and cheapest ways.
How to make an international bank transfer (in 4 simple steps)
1. Customer ID check
An ID check is a legal requirement for all new customers due to financial regulations.
This is only done once. Existing customers skip this step.
Most ID checks are done electronically now, which has made the process a lot quicker and easier.
2. Lock-in an exchange rate
Your bank or money transfer company will want to know the currency you have (to sell) and the currency you need (to buy).
You will then receive the latest exchange rate.
If you are happy to go ahead, the exchange rate quoted will be locked-in for you.
Shortly after, you will be emailed a confirmation with all the details of your transaction.
3. Pay for your transfer
You need to send your money in to pay for your international transfer.
If you use a money transfer company, you are normally given 1-2 working days to send your money in. Whereas if you use a bank, they will require the funds to be in your account already.
4. Your money is converted & sent out
Once your funds have arrived with your bank or money transfer company, they will convert the money into the currency you need and send it to the destination bank account you’ve requested.
International money transfers are mostly done using the SWIFT network - a secure payment system used to connect banks all around the world.
Both banks and money transfer companies use SWIFT.
How long does an international money transfer take?
An international money transfer within Europe normally takes 1-2 working days. Outside of Europe, it can take anything between 2-5 working days.
Converting your money into another currency is actually the quick part.
Most of the time taken is waiting for the recipient foreign bank to clear your funds.
It's just a fact of life that some countries are faster and more efficient than others at processing international transfers.
Banks vs Money Transfer Specialist: which way is cheaper?
Using your bank for an international money transfer might seem an obvious choice as your money is most likely sitting in your bank account.
But there are lower-cost ways to send money internationally.
Money transfer specialists tend to be a lot cheaper and more efficient than banks.
I guess they wouldn't exist otherwise.
We looked at the exchange rates and transfer fees charged by the UK's big four banks.
As a ballpark, the UK banks are charging around 3-4% of your transfer amount. Money transfer specialists can cost up to 60%-70% less.
Most of the cost of an international transfer is embedded within the exchange rate (not the visible fees).
The banks use a tiered system, meaning the exchange rate margin depends on the size of your transfer.
For smaller amounts, the exchange rate margin is a lot higher.
The best rates are reserved for transfers over £200,000.
Money transfer companies can often undercut the banks as they have far lower overheads.
On a large international bank transfer of say £50,000; you could end up paying your bank £2,000 in fees and charges.
That's why I think it's worth looking at the alternatives.
Another thing to note is that the banks can be a bit of a pain to deal with.
The reality is the core products of a bank are mortgages and savings accounts.
If you have used a bank before to send money overseas, you may have also noticed that the staff are not particularly well versed in international money transfers.
Before I worked in the industry, I have used my bank before for several international transfers. I found myself telling the staff member what to do!
As money transfer specialists are focused solely on international money transfers, they can offer a much more efficient and hassle-free service than banks.
Why banks may not be the best option
- It's not their area of expertise
- Their exchange rates can be uncompetitive
- Banks charge transfer fees
- They won't help you with timing
- You are not their priority
How safe is a money transfer company?
If you've never used a money transfer company before, it's natural you would want to know what security measures there are in place.
Fortunately, there are some clear rules and procedures that regulated companies must follow.
The most important of these rules from a customer's point of view is to do with the 'segregation' of client money.
A money transfer specialist Authorised by the FCA must transfer any client money through a separate and safeguarded bank account. This means your money cannot be used for business purposes.
That's why I suggest you choose a company that is Authorised by the Financial Conduct Authority (FCA).
To find out if a company is Authorised just type their name into the Financial Services Register and it will search for a match.
International bank transfers are often meaningful sums of money, so why risk using an unauthorised company.
How to avoid paying transfer fees
Most people hate paying fees - me included.
For international bank transfers, you will find that many of the big banks and money transfer companies charge you transfer fees.
However, there are some money transfer companies, such as ourselves, that do not charge any fees whatsoever.
The cost of our service is fully included in the exchange rate we quote, so our customers don't have to worry about fees that might be added on.
A transfer fee is the most common type of fee. It's a flat fee charged on every international money transfer.
Some banks even charge you twice - a transfer fee for both the sending and receiving bank.
But there are also other types of fees to look out for.
The UK banks tend to charge a priority payment fee to speed up your transfer and also add a fee if you want to have your payment tracked and traced.
One of the frustrations for customers is when these fees pop-up after you've entered all your payment information. At that point, you may feel you're too far into the process to start over somewhere else and then reluctantly pay the fees.
Getting a great rate on your international money transfer
For large international money transfers, the exchange rate is the most important factor in terms of costs.
Even small fractional moves in the exchange rate can make a significant difference to the money you receive.
On an international transfer of say £75,000, a move in the rate of just 1% up or down, makes a £375 difference to you.
A swing of 1% can often be a daily event.
Over the course of several weeks, rates can move significantly more.
It means that timing is important.
Most people have a window of time in which they can transfer their money.
If it's buying or selling an overseas property, or moving your salary or savings back to the UK, you might have the luxury of several months.
If it's paying for an overseas invoice or bill, you might have several weeks.
Whatever your timeframe, there will be good times and bad times to secure an exchange rate.
But how do you know when it's a good time?
I haven't come across too many people that have the time or inclination to watch exchange rates all day.
It's not their field of expertise, and they have other things they would rather be doing.
That's why it might be worth getting some market guidance from someone who deals with exchange rates and international money transfers every day.
A money transfer specialist can monitor the daily movements in the exchange rate and let you know when the rate moves in your favour.
It's an important part of what we do.
Be aware that banks and online-only platforms won't offer this kind of service.
Getting a great exchange rate can ultimately save you a lot of money.
Be careful of exchange rates you see online
Looking on the internet for the best exchange rates can be a minefield of misinformation.
There are so many free websites now that provide a feed to live exchange rates.
The problem is that most of the exchange rates you see online are not actually available to consumers.
Buried somewhere on these sites is normally disclaimer with words along the lines of the rates shown are “not achievable” or "for information purposes only".
That's because they are something known as "interbank rates".
Interbank rates are like a wholesale benchmark rate between the big global banks.
Not even major corporations or money transfer specialists can trade at interbank rates.
If you want to get a real rate, I suggest you request a quote from an actual provider such as a bank or money transfer specialist.
Are money transfer companies all the same?
Like any industry, not all money transfer companies are cut from the same cloth.
Some focus on smaller micropayments to developing countries. Others are fancy platforms or apps for those that need to make dozens of regular international payments, such as paying overseas suppliers.
There are also companies, such as Key Currency, that deal with larger sums or one-off payments, where the customer wants some human contact and guidance.
I appreciate that all money transfer companies can sound the same.
As a customer, it's not easy to figure out exactly what type of customers each company is best for.
Today there are a large number of 'online-only' platforms. The bigger names are PayPal, Transferwise, CurrrencyFair and Revolut.
You should be aware that you pretty much have to do everything yourself.
It's not really possible to speak to anyone. Some aren't even based in the United Kingdom.
They do, however, offer webchat and email support.
It depends what you want.
There are also money transfer specialists such as ourselves (sometimes also called currency brokers), who will provide you with direct access to an account manager (a person).
The point of an account manager is to take the stress and worry out of the money transfer process for you.
If there is ever a problem, you can call and speak directly to them.
For large currency transfers, many customers want the peace of mind of having someone they can speak to.
I have experienced this myself.
When I have done international bank transfers previously, I wanted someone I could call straight away if I had any concerns.
I didn’t want to have to write an email and wait for a response.
Or heaven forbid go back-and-forth with a robot on a ‘web chat’. Those things drive me crazy.
There's no substitute for a real person in my opinion.
I guess it comes down to the individual and what they prefer.
Quick Summary: International Bank Transfers
- You can use a bank or money transfer specialist.
- It takes anywhere between 1-5 working days.
- You can avoid transfer fees by using a money transfer specialist.
- Use a company Authorised by the FCA.
- Beware of 'fake' online exchange rates.
- Some money transfer specialists offer guidance on rates.
Who are we?
I am one of the directors at Key Currency.
We are a leading money transfer specialist serving customers in the UK, EU, Middle East and Australasia.
Our rates are highly competitive, and we charge you no fees.
As part of our service, we can also discuss your requirements and agree on the right time to exchange your money, rather than using a bank or online-only system, and having to accept whatever rate they give you on the day.
In terms of regulation, we are an Authorised Payment Institution (Financial Services Register register No. 753989), so all international money transfers are conducted through safeguarded client accounts.
We are committed to providing our customers with value for money and outstanding service.
Our company has attained a 5-star customer rating on Trustpilot, based on over 500 reviews.
If you would like to compare us to your bank or existing provider, simply request a free quote below.