Best Ways to Send Large Sums of Money Abroad - Investopedia

Best Ways to Send Large Sums of Money Abroad · 1. Bank-to-Bank Transfers · 2. Wire Transfers · 3. Automated Clearing House Transactions · 4. Cash-to-Cash Transfers. PersonalFinance Banking Banking BankReviews PersonalLoanGuide PrepaidDebitCards GuidetoCheckingAccounts CheckingAccounts SavingsAccounts CertificateofDeposits(CDs) MoneyMarketAccount MillionsofU.S.householdssendbillionsofdollarsabroadeveryyear.Whetherthefundsareforfamilyorfriends,ortopurchaseinternationalassets,itisoftendifficulttoconvenientlysendlargesumsofmoney.Inaddition,withsomanyoptionsavailable,peopleneedtotakeintoaccountthespeed,support,andcostsofthevariousmethodsthatfinancialinstitutionsprovideforsendingandreceivingfundsabroad.Thefollowingarefiveofthebestandmostsecurewaystoaccomplishthistask. 1.Bank-to-BankTransfers Somebanksletpeopletakemoneydirectlyfromonebankaccountanddeliverittoarecipient'sbankaccount.Thesetypesoftransactionscanbearrangedonline,overthephone,orinpersonatthedeliveringbank.Theymayhaveafeedependingontheinstitution,andtheaccountandroutingnumbersforboththesendingandreceivingbanksarerequired. KeyTakeaways Speed,costs,andsupportaresomeofthefactorstoconsiderwhensendingmoneyabroad.Bankscantransfermoneyoverseas,butweakerexchangeratesandhigherfeescanmakethemmoreexpensivecomparedtoalternatives.ACH,cash-to-cash,andwiretransfersofferotheroptions.Receiversofprepaiddebitcardscanusethemtowithdrawcashormakepurchases. Somebanksmayofferspecialremittanceprogramsfortransferringslightlysmalleramounts.However,incasessuchasthese,itisimportanttolookattheexchangeratesbecausealthoughafeemightnotbecharged,theinstitutioncouldbemakingmoneyoffofthetransactionfeespread. 2.WireTransfers Additionally,itispossibletosendlargesumsofmoneyfromonebankaccounttoanotherthroughtheuseofawiretransfer.Thesetypesoftransfersareinitiatedthroughabankofficeratthedeliveringbankwhofillsoutthenecessaryforms.Wiretransfers,forthemostpart,mustbedoneinperson.Thereisalsoafeeforthistypeofservice,butwiretransfersofferprotectionfrombothbanksinvolved,makingthefeeworthit.ForpeopleresidingintheU.S.,wiretransfersmustbeexecutedbefore5p.m.ESTforthemoneytoarrivethesameday. 3.AutomatedClearingHouseTransactions Similartowiretransfersandbank-to-banktransfers,AutomatedClearingHouse(ACH)transactionsareelectronicbutuseacomputer-basedclearinghousethatactsasanintermediarytoprocesstheexchangeoftransactions.TheFederalReservebank,forexample,isthelargestU.S.ACHoperator,processing63%ofallcommercialACHtransactionsin2019.Therearenofeesforthesetypesoftransactions,buttheydorequirebothbankstobelinkedtogether.Todothis,bothpartiesneedtofollowbank-specificinstructions. 4.Cash-to-CashTransfers Ifapersonhasalargesumofmoneyincashandneedstosenditabroad,itispossibletousedomestic,walk-inmoneytransfercenterstotransferthatmoneytoaninternationalmoneytransfercenter.InstitutionssuchasWesternUnion,MoneyGram,andRia,aretheclassicplayersofferingthistypeofservice.Inthelastseveralyears,manyfintechcompanieshavestartedprovidinginternationalmoneytransfers.SomenamesthatareprominentintheindustryareWise,Payoneer,PayPal,andWorldRemit. Physicalcashisdepositedinoneofthesemoneytransfercenters.Thedomesticcurrencyisconvertedtothecurrencyofthedestinationcountryandcanbepickedupbytherecipientataparticipatingmoneytransfercenter.Insomecountries,themoneycanbedeliveredtotherecipientataresidentialorcommerciallocation. 5.PrepaidDebitCards Therearesomeservicesthatcansendfundsviaaprepaiddebitcard.Ifthismethodischosentosendalargesumofmoney,thesendercanloadaprepaiddebitcardwithcashfunds,andthereceiverofthefundscanwithdrawthemusingtheprepaiddebitcard.Insomecases,theprepaidcardcanbeusedtomakepurchasesjustlikewithanormaldebitcard.However,thereisnormallyanactivationfeeormonthlyfee. TheBottomLine Thereareseveralwaystosendlargesumsofmoneytofriendsorfamilyabroad.Whilespeedisoftentheprimaryobjective,costsandsecurityofsendingfundsabroadshouldbeconsideredaswell.Wire,ACH,orcash-to-cashtransfersmightbecheaperalternativestousingbank-to-banktransfers.Lastly,recipientsofprepaiddebitcardscanusuallyusethecardstowithdrawfundsormakepurchasesafterpayinganactivationfee. ArticleSources Investopediarequireswriterstouseprimarysourcestosupporttheirwork.Theseincludewhitepapers,governmentdata,originalreporting,andinterviewswithindustryexperts.Wealsoreferenceoriginalresearchfromotherreputablepublisherswhereappropriate.Youcanlearnmoreaboutthestandardswefollowinproducingaccurate,unbiasedcontentinour editorialpolicy. TheWorldBank."PersonalRemittances,Paid(CurrentUS$)-UnitedStates."AccessedSept.262020. FederalReserveBankServices."Fedwire® ServicesOperatingHours."AccessedSept.26,2020. BoardofGovernorsoftheFederalReserveSystem."CommercialAutomatedClearinghouseTransactionsProcessedbytheFederalReserve-AnnualData."AccessedSept.26,2020. Nacha."2019ACHNetworkVolumeandValue."AccessedSept.26,2020. WesternUnion."SendMoneyinPerson."AccessedSept.26,2020. MoneyGram."HowtoSendMoneyataLocation."AccessedSept.26,2020. Ria."Simple,SecureInternationalMoneyTransfer."AccessedSept.26,2020. WorldRemit."MoneyTransferServices."AccessedMay29,2021. PayPal."SendMoneyAcrosstheWorld."AccessedMay29,2021. Payoneer."SendingandReceivingMoneyInternationally."AccessedMay29,2021. Wise."WiseInternationalMoneyTransfers."AccessedMay29,2021. RelatedArticles Savings MoneyGramvs.WesternUnion:What'stheDifference? Banking ArePrepaidCardsRightforYou? Banking WhatIsanExternalTransfer? Banking WhatAreACHTransfers? PersonalFinance HowDoWireTransfersWork? Sectors&IndustriesAnalysis HowSafeIsVenmoandIsitFree? PartnerLinks RelatedTerms HowaWireTransferWorks Awiretransferisanelectronictransferoffundsacrossanetworkadministeredbyhundredsofbanksaroundtheworld. more PayPal PayPalisanelectroniccommercecompanythatfacilitatespaymentsbetweenpartiesthroughonlinefundstransfers. more HowRemittancesHelpPeopleinDevelopingNationsBattlePoverty Aremittanceisasumofmoneysenttoanotherparty,usuallyinanothercountry.Remittancesareamajorsourceofincomeforpeopleinpoornations. more AutomatedTellerMachines(ATMs):WhatYouNeedtoKnow Anautomatedtellermachineisanelectronicbankingoutletforcompletingbasictransactionswithouttheaidofabranchrepresentativeorteller. more Ripple Rippleisatechnologythatactsasbothacryptocurrencyandadigitalpaymentnetworkforfinancialtransactions. more UnderstandingChecks Acheckisawritten,dated,andsignedinstrumentthatcontainsanunconditionalorderdirectingabanktopayadefinitesumofmoneytoapayee. more