Sending money abroad shouldn’t mean losing a big chunk of it to fees. Yet, many people are surprised by how much banks and other providers charge. Those hidden fees can really add up and impact the amount you pay for the transfer. The cost of international money transfers varies depending on the method and provider you choose.
Let’s take a closer look at what you’re really paying and explore smarter ways to transfer money internationally.
Summary:
• Money transfer fees: how much does an international bank transfer cost?
• Why can there be extra costs to transfer money abroad?
• How can an online money transfer company help save you money?
• Compare UK banks international transfer fees
• Why are banks typically more expensive to transfer money internationally?
• What factors impact the cost of international bank transfer fees?
• How do OFX keep their fees so low?
• How to avoid international transfer fees?
• Why choose OFX for international money transfers?
Money transfer fees: how much does an international bank transfer cost?
Currency conversion fees are charges applied when you exchange one currency for another, typically in international transactions. These fees are usually imposed by banks, credit card companies, or currency exchange services to cover the costs associated with converting currencies and their profit.
Currency conversion fees are charges applied when you exchange one currency for another, typically in international transactions.
These examples show how a 4% fee can add up:
- If you’re sending £1,000, a 4% markup will add £40 to your overall transfer costs
- If you’re sending £5,000, a 4% markup will add £200 to your overall transfer costs
- If you’re sending £10,000, a 4% markup will add £400 to your overall transfer costs
Save on fees when sending money abroad with OFX
Why can there be extra costs to transfer money overseas?
- Upfront transfer fees
In addition to the exchange rate markup, banks usually charge a flat fee for processing international transfers. This fee can range from £5 to £2518, depending on the bank and the destination country.
- Exchange rate margin markup
The exchange rate offered by banks is often marked up, meaning it’s less favourable than the mid-market rate you might see on Google or financial news sites. This markup can range between 3% to 5%1, making it one of the most significant hidden costs when transferring money internationally.
- Intermediary bank fees
When you transfer money abroad, especially through the SWIFT network, your money may pass through one or more intermediary banks before reaching the recipient. Each of these banks can deduct a fee, often between £5 and £1019, which can reduce the amount your recipient ultimately receives.
- Recipient bank fees
The recipient’s bank might also charge a fee to process the incoming funds. This fee is typically between £5 and £152, depending on the bank and country.
How can an online money transfer company help save you money?
We’ve shown you the costs but let us show you how OFX can help save you money on each of the fees.
1. The fee to send the money.
Sending money abroad with your bank will often incur a fee.
- How OFX saves you money
At OFX, you receive fee-free transfers* for sending GBP abroad.
*Occasionally, third-party banks may deduct a fee from your transfer before paying your recipient. This fee may vary and OFX receives no portion of it.20
2. The margin taken by the money transfer provider.
So when your bank tells you that you’ll spend £1 GBP for every €1.045 (EUR), a simple Google search may reveal that the real daily exchange rate is closer to 1.162. That means that on a £10,000 transfer into EUR, you may lose around £450 by using your bank.
- How OFX saves you money
If you’re a personal customer, enjoy extra savings on your first transfer. New to OFX? Take advantage of a great introductory rate across 7 currencies (AUD, USD, SGD, GBP, NZD, EUR, CAD) on your first personal transfer. *Terms and conditions apply.
3. The fee to receive the payment.
Some banks may charge your recipient a fee to receive money from abroad.
- How OFX saves you money
At OFX, we do our best to minimise these fees by sending your money using our global network of 115 local bank accounts. See, banks often don’t charge such fees for local transfers, so whenever possible, OFX uses our local account to make your transfer.
How OFX reduces fees on recipient transfer
It works like this: you pay into our local account in your home country, and we pay out from our local account in your recipient’s country, so your recipient typically doesn’t have to pay receiving fees.
Unfortunately, these fees vary from bank to bank, and they also depend on what kind of account your recipient has, which is why we can’t guarantee that you won’t pay a receiving fee when you make a transfer with us. But at least you do know that we’re doing our best to deliver value for our clients.
Compare UK banks international transfer fees
Let’s have a look at some major banks and what fees they charge for a transfer abroad3
| Bank provider | International transfer fees |
| HSBC | £0 to £5 |
| Barclays bank | £0 to £25 |
| The Co-operative Bank | £0 to £35 |
| Nationwide Building Society | £0 to £20 |
| Lloyds Bank | £0 to £9.50 |
| NatWest | £0 to £30 |
| Halifax | £0 to £9.50 |
| First Direct | £0 to £5 |
Four of the big banks international transfer fees explained:
Barclays Bank
For sending money abroad:
Barclays have a range of fees depending on what currency you send, method of sending whether in branch, via phone or app and what country you’re sending money to.
An example if you send Euros to France, there’s no Online Banking fee for a Single Euro Payments Area (SEPA) payment, Branch fee for SEPA payment £0 (business account fees differ) however branch fee for non-SEPA payment £25.
For receiving payments from overseas the conversion charge applied is no greater than:
- 2.75% for Personal and Premier customers
- 2% for Business customers
For transactions above £25,000 the conversion charge will reduce further as the amount increases.4
See a full list of fees here.
Lloyds Bank
Free – If you are sending funds through Internet Banking, International PhoneBank, in branch or in writing, Standing Order or any of your other accounts held with Lloyds Banking Group.
- £12 – Zone 1 (USA, Canada and Europe)
- £20 – Zone 2 (Rest of the world)
- £25 – Electronic Funds Transfer (CHAPS payments within the British Isles)5.
HSBC
It’s free to send money anytime if you are using a Global Money Account.
If you are making payments from a non-Global Money account, it’s no extra cost to send money from HSBC to HSBC and to another bank if it’s in euros and within the EEA. Otherwise, it’s £5 to any other bank if you send money online. This applies to recurring and future-dated payments, too6.
Natwest
A standard payment to both SEPA and non SEPA countries is £0. If the payment is urgent a £15 fee applies.
If you have registered your biometrics with the Bank, you can use the mobile app or Online Banking to make an international payment to new and saved payees up to the daily limit of £10,000.00 GBP (euro equivalent for ROI)7.
Why are banks typically more expensive to transfer money abroad?
Banks have a few different hoops to jump through when it comes to international transfers.
Service limitations
Banks tend to focus on domestic financial management ahead of international, which means they can find themselves with technological limitations. This could result in them needing to charge higher fees to make a transfer.
Legacy issues
One of the most common charges for international transfers with banks is due to several factors, including legacy systems such as SWIFT, which involves multiple intermediary banks, each adding their own fees. Additionally, banks generally add a markup on the exchange rate, increasing the overall cost of the transfer.
Bricks and mortar
Banks generally have higher overhead costs than specialised money transfer services as they have to pay and support their network of branches.
I think most people just assume the bank will be the best place to go to transfer money overseas, but the fees alone can really chop into that exchange rate.
– Jarrad Butler, an OFX client
What factors impact the cost of international transfer fees?
Several factors influence the overall cost of transferring money abroad:
Delivery speed
Faster transfers often come with higher fees. Some providers charge extra for expedited services, so if time isn’t critical, you might save by choosing a slower option.
Currency and countries
The cost of your transfer can vary depending on the currencies involved and the countries to which you’re sending money. Transfers to less common currencies or countries might incur higher fees.
Payment provider
Choosing the right payment provider is crucial. Specialist providers like OFX often offer better exchange rates and lower fees than traditional banks. This makes OFX a more cost-effective option for international money transfers.
How do OFX keep their fees so low?
OFX uses a network of 115 bank accounts worldwide, where we hold currency reserves.
When you send a transfer at the rate you’ve locked in with one of our foreign exchange specialists, most of the time your money will go into a local account in your home country and stay there.
We then pay your recipient from our reserves in the destination country. That’s why your money arrives so quickly when you use us.
- We don’t pay fees to send money to our own accounts
- It protects our business from currency exposure and lets us pass those savings onto you.
- We can stay open during times of high currency volatility
- This system often allows us to process same day transfers 24/7
- Our operations are only online and over the phone saving overhead costs
- Your transfer is automated whenever possible, which reduces the risk of input errors,
saves on staffing costs and expedites processing.8
How to avoid international transfer fees
There are cheaper ways to send money abroad. To avoid excessive fees, compare exchange rates from different providers and opt for transparency.
Compare exchange rates
Before making a transfer, compare the exchange rates offered by different providers.
At OFX, we can offer you better rates – closer to the mid-market rate, which can save you money.
Go for transparency
Choose a provider that is transparent about their fees. Avoid providers that offer “no-fee” transfers, as they often compensate with a less favourable exchange rate.
Why choose OFX for international money transfers?
Beyond competitive rates and low to no fees, the perks of an OFX account includes:
- Making transfers on your schedule, not the bank’s
- Setting a target exchange rate with a Limit Order so you won’t miss out if the market reaches the exchange rate you want
- Locking in great exchange rates for future transfers with a Forward Contract
- Ability to send recurring transfers
- 24/7 help from our OFXperts
- Get a customised rate for large or recurring transfers when you contact us
Transferring money internationally or to the UK?
Beat the banks with OFX
Transfer to over 170 countries online and save with OFX’s competitive rates. See how you can save here.
We’ve helped millions of people like Scott save money on transfer fees
After stressing about bank transfer fees to get his money back home, Scott, a travelling copywriter, decided to try OFX.
“One of the biggest rip-offs in banking is overseas currency transactions.” In fact, in this instance, using a money transfer service like OFX was “cheaper and faster” than doing it through his bank, saving Scott nearly NZ$7000.
“Just because you think banks are default, you think you have to use them to transfer money… People need to realise that banks don’t own the right to transfer money internationally. They’re not the only solution you have.”
And we help business owners like Eric save on fees too
Founder Eric Eigner started his online business as a side hustle in 2008. After steadily growing it for a few years, Eric made the decision in 2011 to run the business full-time.
Attracting international customers, Eric needed a business solution to pay and get paid in multiple currencies cheaply and efficiently.
“That’s when I discovered OFX in 2012, exchange rates were far more competitive, and I haven’t looked back since. The banks rip you off with the fees. The margins they charge on foreign currency are crazy. I don’t want to pay that much, especially for my volume. I’ve saved thousands and it just makes it easier for overseas customers to pay me.”
Money transfer fees FAQs
Are international transfers free?
No, most providers charge a fee, though some offer promotions for fee-free transfers under certain conditions.
What you need to make an international bank transfer
You’ll need the recipient’s bank details, including the IBAN or SWIFT/BIC code, and information on the currency and amount to be transferred.
How long does an international bank transfer take?
Transfers typically take between 1 to 5 business days, depending on the method and provider.
What is the alternative to transferring money internationally with a bank?
Using an international money transfer specialist, such as OFX, can save you money. Specialist providers typically offer lower fees, better exchange rates, and faster transfer times than traditional banks.
Disclaimer: This article was written in August 2024. The information is based on our online research and is correct as time of publication. The information provided is for educational purposes only and a reader should consider the specific requirements of their business when evaluating providers. If you would like to request updated information, please contact us at customer.service@ofx.com.
This information does not take into account your objectives, financial situation, or specific business needs.
References
- https://goexpat.com/costs-of-transferring-large-sums-abroad/
- https://www.savvy.com.au/international-money-transfers/fees/
- https://tools.moneyhelper.org.uk/en/use-our-compare-bank-account-fees-and-charges-tool
- https://www.barclays.co.uk/ways-to-bank/international-payments/
- https://www.lloydsbank.com/international/products-and-services/money-transfers.html
- https://www.hsbc.co.uk/international/money-transfer/
- https://www.natwest.com/banking-with-natwest/how-to/send-money-abroad.html
- https://www.ofx.com/en-gb/blog/how-we-keep-our-rates-so-low/
IMPORTANT: The contents of this blog do not constitute financial advice and are provided for general information purposes only without taking into account the investment objectives, financial situation and particular needs of any particular person. UKForex Limited (trading as “OFX”) and its affiliates make no recommendation as to the merits of any financial strategy or product referred to in the blog. OFX makes no warranty, express or implied, concerning the suitability, completeness, quality or exactness of the information and models provided in this blog.
