The research found consumers could save $652 when transferring $15,000 to GBP by opting to use a competitive transfer service over the average rate offered by major banks.
The same transfer to USD could save an additional $631.
These findings come on the back of Canstar’s release of Star Ratings for international money transfer services where three providers were awarded 5 Stars for providing outstanding value.
The Canstar Research team found for a $15,000 transfer the difference between using a 5-Star-rated service and a major bank service as at 25 October 2017 would be:
|5-Star||USD 11,748||GBP 9,070||NZD 16,076|
|Majors||USD 11,267||GBP 8,687||NZD 15,535|
|Difference||USD 481||GBP 382||NZD 541|
|AUD Equivalent||AUD 631||AUD 652||AUD 515|
Source: Canstar.com.au based on exchange rates as at 25 October 2017
The total transfer amount compared by Canstar is the result of the exchange rate offered and the fees charged by the provider. Remember, additional fees can also be charged by the receiving bank.
It is anticipated that by the end of the year Australians will have sent a total of $3.1 billion overseas based on a report released by Commonwealth Bank.
As an idea of the amount Australians may be paying in poor exchange rates and fees every year, we looked at the total amount we are sending offshore and compared the difference between transferring using the 5-Star services to the major banks.
|$3.1 billion Transferred|
|5-Star||2.427 billion USD||1.874 billion GBP||3.322 billion NZD|
|Majors||2.328 billion USD||1.795 billion GBP||3.211 billion NZD|
|Difference||99 million USD||79 million GBP||111 million NZD|
|AUD Equivalent||130 million AUD||135 million AUD||106 million AUD|
The 5-Star recipients can be seen below based on a $15,000 transfer to the UK.
Our transfer habits
According to CommBank, 2.4 million Australians send money overseas each year.
The most popular destination for our money is the UK followed by the USA, China and New Zealand.
The US receives the most money from Australians, receiving almost two times more than the UK.
But who are we sending the money to? The research showed the most common recipients were family members with number one being parents, followed by siblings then friends.
Always check exchange rate
Earlier this year CommBank announced it would drop international fees from $22 to $6 for transfers less than or equal to $1,000, or $12 for transfers over $1,000. Similar to the dropping of ATM fees, there has been speculation other major banks will soon follow suit.
However, many providers make the majority of their profit by offering an exchange rate considerably lower than market. This is why consumers need to consider fees as well as exchange rates when considering an international money transfer service. For example, Citi charges $25 for transfers, but is a 5-Star recipient because it offers a competitive exchange rate.