💸 Money Transfers: Sending money back home? Do it cost-effectively.
- Kacper Duda
- Sep 11, 2024
- 3 min read
Updated: Dec 29, 2024
A few people have asked us how to transfer money abroad in a cost-effective, safe way. As it’s a problem that the majority of expats will likely face at some point, we decided that’s a good place to start.
Understanding money transfer costs 💵
There are two cost components when converting and sending money abroad:
FX rate - The foreign exchange (FX) rate is the rate at which one currency will be converted to another. Whilst there is always a prevailing market FX rate, providers will usually add a mark-up to cover their costs and make a profit. This becomes the FX rate they offer to you.
Fixed fees - Any fees the provider charges for either converting and/or transferring the funds.
Banks vs. FX brokers vs. payment platforms 🏦
You can choose between various provider types, when selecting who to transfer money with:
Banks - Your bank likely offers money transfer services. However, with a few exceptions (such as Wio Bank below), their FX rates and fees tend to make them uncompetitive.
FX brokers - Specialised exchange houses whose only business is converting and sending money. They can be a good choice for larger sums.
Payment platforms - Digital only payment providers who specialise in international money transfers. These are usually the best options for smaller amounts.
Factors that determine the costs 🧾
Currencies - The more common the currency combination, the better the FX rate will be. So transfers such as AED->USD or AED->GBP will usually be cheaper than transferring AED->NOK (that’s Norwegian Krone).
Amount to transfer - The larger the amount, the better the rate you will get if you shop around.
Market prices - This one you can’t control other than with timing. If the currency you are transferring into is weaker vs. global currencies, you’ll get more for your AEDs. Conversely, if it’s stronger, you can expect less to come out on the other end.
How to compare providers 🔎
The easiest comparison you can draw is by looking at the total converted amount that will reach the recipient. So if you send AED 1000 and the recipient receives USD 270, that’s better than them receiving USD 265 with a different provider (the difference being a combination of a worse FX rate and/or higher fixed fees).
Good providers will have an online calculator where you can play with the amounts before making the transfer. If you’re speaking to FX brokers, ask them for an ‘all-in’ quote to compare to.
Current best providers ✅
Provider | Type | Best for... |
|---|---|---|
Payments provider | Very good rates on GBP, INR, PKR, PHP. Waived AED10 service fee on first 3 transfers. | |
Digital Bank | Fee-free transfers under 1000 USD, GBP and EUR. Very good USD rate if you have a Wio Plus account. | |
Digital Bank (can only be opened from one of their jurisdictions - but you can use it from the UAE) | Best rates across GBP, EUR and not a bad USD rate. BUT you need to fund it by transferring AED from your UAE bank account to their account (check transfer fees with your bank). | |
FX broker | Larger transfers. |
Do you have a preferred low-cost provider that we missed? Tell us. We’re always keen to hear if there are better options out there!
Disclaimer: Please bear in mind that this email does not constitute financial advice. Any choices you make you are solely responsible for. We always aim to provide highest quality, independent views but do your own research to ensure you’re comfortable with any changes you make to your personal finances.
