Ask LH: Can I Cheaply Transfer Funds From Overseas?

Ask LH: Can I Cheaply Transfer Funds From Overseas?

Dear Lifehacker, As one of Sydney’s many expats, I have a bank account locally as well as a bank account abroad. Do you know of a way to transfer money between accounts without incurring the $20-odd fee for making international transfers? Can I use PayPal to make a transfer from my Aussie account to my overseas account for a smaller fee, or am I stuck transferring larger sums of money to make the fee worth transferring the money? Thanks, Expat Expenses

Money Transfer picture from Shutterstock

Dear EE,

As a general rule of thumb, it’s always better to transfer larger sums of money rather than doing it in small allotments. PayPal does indeed have lower transfer fees compared to most banks — you can expect to pay between 0.5 and 1 percent of the total transfer amount, depending on the country you’re sending money to. (Transferring $1000 between a US and Australian PayPal account will incur a fee of around $10, for example.)

However, it’s important to ensure that the entire amount is actually in your PayPal account — if the transfer is entirely or partially funded by debit card or credit card, the transfer rates will be higher. You can read more about PayPal’s fee policies here.

VoIP service provider Pennytel is another option that’s worth looking into — it provides international money transfers with zero transfer fees or commissions.

If you can log into your overseas bank account, you may also be able to pay off local credit cards through a BPAY-like mechanism, though this will naturally vary from country to country.

Do any expatriate readers have some transfer tips of their own? Share your advice in the comments section below.


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  • Citibank offers free foreign transactions and the rates they offer are pretty good. If you open a Citibank here and another Citibank in a foreign country, you can link the accounts together and the transfer will be instantaneous.

  • PayPal is arguably the worst way to transfer funds internationally. Last I checked, though there is no transfer free and only a small withdrawal fee, their forex rate is laughable. Those Travelex machines at the airport have better rates.

    If you can, setting up a bank acct with a bank w/ international presence like HSBC or Citi (which support cross country bank account usage) may be the way to go.

  • FX companies are the best. HIFX and WorldFirst are two big companies.

    For transfers over a certain amount (normally ~AU$1000) they have no transfer fees. They have a presence in multiple countries (i.e. US, UK, Oz, NZ, etc.).

    All you do is transfer money to their (e.g. Oz) account, and they give you the money when they receive it, only they put it into your foreign (e.g. uk) account.

    They earn their money off the exchange rate, but their exchange rates are much better than any banks’, and probably better than Paypal’s (though I haven’t checked this out directly.

    Hope that helps.

  • Why is no one talking about the spread? If you could buy and sell currency at the same time, you would lose more money than just the conversion fee. I don’t know a single vendor whose buy price is the equivalent of their sell price.
    Also beware that some places tell you the industry rate (??), not the rate for the general public (OzForex is a prime example).
    Honestly, I would ignore all of the advice I read above, except maybe the British expat link (because I didn’t check out that link to confirm it). I had good cause to do my research quite recently. I had other drivers (ie. international banking through 1 bank) that drove my choice.
    Just remember – ask about the spread. It’s FUNDAMENTAL!!!

    • The spread is the “rate” that people mentioned above. Eg @JJ80 said “though there is no transfer free and only a small withdrawal fee, their forex rate is laughable”.
      I recommended Pennytel because they have zero fees AND their rate/spread VERY close to midmarket rates.

  • PayPayl is costly so try using an International Payment provider that specialises in the service and that they are FSA registered and your money is insured. Try using FTT Global who manage most currencies all over the world!

  • +1 for citibank.
    I recently moved to Boston from Brisbane and after months of researching stumbled onto citibank. The transfers are instant and free, and you can use your debit card to withdraw money from any citibank ATM in the world for free. The currency conversion is also one of the most decent I have seen.

  • +1 for Citibank – I’m currently living in Denmark and I’ve been travelling all over Europe for the past 5 months and I’ve yet to incur a single fee on anything – amazing!

  • One word of advice is ….
    We had an account for a couple of years, and had a 100% failure rate. The worst case was where they refused to pay out the money at the other end. We argued for a month, but had to eventually transfer the money back to our original account. We lost nearly $100 in transaction fees, and wasted a month.

  • I like
    They charge no fees and make their money of the spread between spot and what they quote you. If you transfer large amounts, their rates can be as low as 1% above the spot (i.e. wholesale interbank) rates.

  • Depending on the currency you are going to transfers, there can be different options with the best exchange rate. For transfers in euros – Paysera could be a good option. And Xoom offers good exchange rates for transfers to India. This is what I had experience with.

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