‘From SA with Love’ – Sending and Receiving Money from Afar

4 months ago written by

The South African expatriate community is diverse and growing. With more South Africans working, traveling, and residing abroad, families and friends are always looking for cost-effective ways to transfer money back and forth.

Fortunately, a wide range of money transfer services is available to SA citizens. Banks have traditionally been thought of as the quickest, most reliable, and affordable means of transferring money abroad. Unfortunately, banks no longer enjoy top-billing in that department. All sorts of bank fees, commissions, Forex exchange costs, and delays hinder the effective transfer of money abroad.

How can South African expatriates get more bang for their buck?

Various foreign-exchange companies specialize in money transfers abroad. There are many reasons why South Africans may wish to transfer money from their bank accounts in South Africa to their banks abroad. Forex firms offer a sensible and reliable way of mediating between banks and private clients. Since these companies are engaged in trading vast amounts of FX annually, they can also buy/sell Forex with low spreads. This is important, since it guarantees that you will not be charged heavily with the currency cross-exchange rates. As a result, you can save substantial money on fees, commissions, rates and time. For small amounts of money, the savings will be less than for larger amounts of money.

Despite the cost savings, there is another advantage of using these mediating companies to transfer money abroad: expert assistance. Since foreign-exchange companies mediate between customers on the one hand and banks on the other, they facilitate the exchange. The benefits of using these mediators is that you can avoid the recipient fees, and maximize your savings in the process. South Africans who have transferred money abroad realize all too well how expensive international wire transfers are. The exorbitant exchange rate fees are not limited to automatic currency transfers, they apply to the same currency receipts/transfers. Therefore, if there is a way to avoid international wire transfer fees, customers are benefiting.

Be sure to lock in a favorable exchange rate when you transfer money abroad

Clients who are receiving money from home bank account will want to have complete information on all aspects of the process. This includes the limits imposed by the South African government, taxation-related issues, and the transfer process itself. Be advised that currency dealers do not serve as licensed tax consultants, but they are knowledgeable resources to point South African expatriates in the right direction. It’s not only the fees and commissions that play a part in your money transfers, it’s also the right timing of the transfer. For example, you may wish to transfer R100,000 from your South African account to your American account, but with such a volatile USD/ZAR exchange rate, you will want to time that just right. The leading money transfer services will ensure that you get the best FX rate possible by initiating the transfer at precisely the right time. That way, you get to lock in a favourable rate.

You may even be presented with an option such as a forward contract which allows you to hedge against the risks of currency fluctuations. One way to transfer funds is to do it in batches, that way you get to smooth out the currency fluctuations on a big lump sum transfer. Experts advise SA expatriates to conduct a search of the top money transfer services companies before going to SA banks like Standard Bank, Barclays Bank, ABSA, Nedbank, and the like. Cost savings as high as 50% have been reported by avoiding banks for currency transfers. Be sure that the companies you are using are all certified by regulatory authorities such as the Financial Conduct Authority (FCA) in the United Kingdom, or similar agencies in other countries.

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