There are certain fees associated with money transfers that you should know before sending your money overseas. These fees can be broken down into three different components: The cost of sending money, the cost of exchanging money, and the cost of receiving money.
1. The Cost of Sending Money
The cost of sending money is dependent on the method in which you decide to send your money. Using a reloadable debit card is the most affordable option for sending small amounts. This system involves using an online service to send a debit card to any location in the world. Once the recipient gets the card they can go to any ATM machine to withdraw the funds. The price for this action is 5 USD for every 1000 USD sent.
Sending funds internationally from one bank to another is another method to make a money transfer. The price of using this service is dependent on the bank which you choose to make the transfer with. Bank of America charges a flat rate of 45 USD per international transfer, while CitiBank charges 30 USD for every international transfer (this rate applies for any amount of money up to 50,000 USD). Wells Fargo charges different rates depending on the country you choose to send your money to. For example, a 1000 USD wire transfer to China costs the sender 12 USD, transferring the same amount to El Salvador costs 8 USD.
2. Exchange Rates
The exchange rate, or rate that one currency will be traded for another, is very important to consider when transferring funds. These rates are continuously changing and can thus affect the amount of money which is received outside of the United States. For example, when sending money to China, one needs to consider how many Yuan (CNY) you can trade for each USD. If the exchange rate of USD/CNY is 1/6, then sending 1000 USD to someone will be like sending 6000 CNY. However, if the exchange rate changes to 1USD/7CNY, then the same 1000 USD you send will afford your recipient 7000 CNY.
3. Cost to Recipient for Accessing Sent Funds
Once the money arrives in a foreign country there are some fees that the recipient will have to pay. As noted in the "cost of sending money", these fees will vary depending on the method in which you send your money. When using a reloadable debit card the recipient will have to pay an ATM fee every time they withdraw funds. These fees range from 3-6 USD per withdrawal.
Receiving funds from a bank transfer requires exchanging the money to the local currency. Banks and exchange shops will charge a commission fee for this action which is based on supply and demand. This means that you will receive less than the rate that is being quoted in the global foreign exchange market. Alternatively, if you choose to send money by check, the recipient of the funds will have to pay an international deposit fee. This fee varies from bank to bank, and can range from 25 to 50 USD.
Knowing the cost of sending your money, the current exchange rate, and the cost of receiving money will give you a more accurate picture of what happens to the funds you send overseas.
Oded Porat is a writer who strives to inform people of the safest, easiest and most affordable ways to conduct business online. To learn more about how you can make a money transfer visit the ATMCASH website.
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