Specialist money transfer companies are not the only way to send money overseas, although often they will be the lowest cost way. Other options to compare might include:
Your bank account
Sending money abroad using your UK bank account is easy and convenient, as well as safe. You’ll normally be able to do the transaction online. But the exchange rates are usually poor, and there are often high fees too.
The one scenario where using your bank might be a decent option is if you have an account with a UK bank that has branches in the other country too, such as Spanish-owned Santander. Some banks allow free transfers in this situation. This could be helpful if you have an overseas holiday home or split your time between two countries.
A multi-currency bank account
A multi-currency account lets you hold money in several currencies at the same time.
Most major banks, such as Barclays, Natwest, Lloyds and HSBC, offer foreign currency or multi-current accounts, generally for the world’s most used currencies (E.g. Sterling, Euros, US dollars, Australian dollars, Swedish Krona etc).
These accounts let you manage payments in a foreign currency instead of opening a new bank account overseas. However, most multi-currency accounts tend to be aimed at high net worth customers or businesses, so not everyone will be eligible.
On the high street
Services such as Moneygram and Western Union have their advantages – but they’re not cheap. You can use these services if you need to pay in cash or if the recipient doesn’t have a bank account.
The receiver can pick up the cash quickly (in minutes) in a shop in an emergency. Both have a huge network of physical premises, including relatively remote locations. They can both be a good option, for example, if your child is on a gap year and is robbed of all their stuff, as you can send them cash quickly.
However, fees can be very high, exchange rates uncompetitive, and maximum limits low.
PayPal
PayPal is an easy option if both you and the recipient have a PayPal account, allowing consumers to transfer money between more than 200 different countries. But PayPal is an expensive way to send money abroad as the foreign conversion fees tend to be among the worst out there.
