Australians could save hundreds of dollars each time they transfer money overseas by comparing exchange rates and transfer fees according to recently released data from Canstar.
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:
$15,000 Transferred | |||
---|---|---|---|
End Deposit | |||
USD | GBP | NZD | |
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
Compare International Money Transfers
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 | |||
---|---|---|---|
End Deposit | |||
USD | GBP | NZD | |
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.
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.
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.
This advice is general and has not taken into account your objectives, financial situation, or needs. It is not personal advice. Consider whether this advice is right for you, having regard to your own objectives, financial situation and needs. You may need financial advice from a suitably qualified adviser. For more information, read Canstar’s Financial Services and Credit Guide (FSCG) and our detailed disclosure. Canstar may receive a fee for referring you to a product provider – for further information, see how we get paid. Payment of fees for ads does not influence our Star Ratings or Awards.
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Australian Government Guarantee Scheme: In this table, products labeled as 'Banks' include Credit Unions, Building Societies & other financial institutions covered by the Australian Government Guarantee Scheme and regulated by APRA. The AGGS guarantee's deposits (with conditions) when temporarily held by the financial institution.
For more information, please visit Australian Government Guarantee Scheme.
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Star Ratings in this table were awarded November 2022. The search results do not include all providers and may not compare all features relevant to you. View the Canstar International Money Transfers Star Ratings Methodology report. The rating shown is only one factor to take into account when considering products.
Any advice provided on this website is general and has not taken into account your objectives, financial situation or needs. Consider whether this advice is right for you. Consider the Product Disclosure Statement and Target Market Determination before making a purchase decision. Canstar provides an information service. It is not a credit provider, and in giving you information about credit products Canstar is not making any suggestion or recommendation to you about a particular credit product. Research provided by Canstar Research AFSL and Australian Credit Licence No. 437917. You must not reproduce, transmit, disseminate, sell, or publish information on this website without prior written permission from Canstar.