The Problem with Using a Bank to Transfer Your Money
When sending money abroad through your bank, you will usually be charged an international money transfer fee that could be up to £25, depending upon the bank that you use. Your fee might even be based upon the currency in which your money is being sent, and you might also incur an extra fee to expedite your transfer. But it doesn’t end there. When you send money through your bank, you’ll probably pay a margin of up to 5% on the daily exchange rate. Ouch.
Banks use something called the interbank rate to trade money with each other. This rate fluctuates by the second, and it is the rate that you’ll see if you do a basic Google search like ‘1 AUD to USD’. But that’s not the rate that the banks give you, they usually add up to 5% on the daily exchange rate, so on a £10,000 transfer, you could be paying £500 on top of the fees charged to send the money. At OFX, we think that’s too much.