The first time you start an international bank transfer, you’re likely to run into some confusion. There’s so much confusing terminology: ‘SWIFT’, ‘IBAN’ and ‘BIC’. What does any of this even mean? Fortunately for you, we’re going to take you through this step by step – you’ll be a total whizz in no time. We’ll also give you some tips on avoiding large international bank transfer fees.
Step One: Research
As with anything, you want to ‘look before you leap’. You may wish to use your current bank, or a different one, depending on the costs and flexibility. There are three important factors when it comes to transferring money internationally:
Fees: Every provider will charge you for the transfer in one way or another. Let’s take a look at some figures:
The Commonwealth Bank of Australia charges $22 per online transfer and $30 per branch transfer. There is an additional receiving fee too – costing you up to $11. Further services, such as cancellation and tracking are around $25 each – as seen in CBA’s international bank transfer fees.
Comparatively HSBC in the UK charges anywhere from £0 to £30, depending on your destination and loyalty status with the bank (“Premier” members receive a discount here).
As you can see, there can be a fair amount of variation here. Every provider will give you their fee information upfront (if they don’t – avoid them!), so shop around and find something that suits your needs. A percentage fee may work out cheaper for small transfers, while a flat fee may be advantageous for those sending larger amounts.
Exchange Rate: The exchange rate determines the amount of foreign currency your local currency will convert into. This is set by each individual bank and therefore differs wildly.
HSBC offers a GBP/USD exchange rate of 1.52
The Commonwealth Bank of Australia offers a GBP/USD exchange rate of 1.49
This means that HSBC will give you 0.03 more USD per pound than the Commonwealth bank. Notice how the bank with the higher fee gives a slightly more favourable exchange rate? Often providers will “pad” their exchange rate to offer lower fees and vice versa – so you want to look at these two things together.
Transfer Time: HSBC will transfer anywhere in the world in up to four working days. More immediate countries, such as Australia, Canada and the US transfer on the same day that you apply.
Comparatively, The Commonwealth Bank takes up to five working days for transfer.
Similarly, Barclays offer a transfer time of up to eight working days, with faster priority for emergency transfers.
It’s important to factor these transfer times into your decision. Often faster transfers come with a higher fee.
Step Two: Get the Details from the Recipient
In order to make an international bank transfer, you’ll need some information from the recipient:
Bank Identifier Code (BIC) or SWIFT Code: This is a code used to identify banks around the world. Think of it like a unique ID number so that your money ends up in the right place. The recipient will need to acquire this from their bank and pass it on to you.
International Bank Account Number (IBAN): This is the bank account number of the recipient. It’s similar (and often the same) as their regular bank account number – but often with a little extra information. If you’re with Barclays for example, there is a tool available to help you find this. (http://www.barclays.co.uk/P1242593395280#). This information should be located on the website of any other major bank or should be present on your bank statement.
You will also need their name and physical address, but those should be reasonably easy to get hold of.
Step Three: To the Bank!
You have a choice here; you can either transfer money online or through a bank branch. It’s best to choose whatever you feel most comfortable with.
Branch: Use the phonebook or the bank’s website to find the closest physical branch. Ask the teller for an international bank transfer form to fill out. They will ask for the SWIFT/BIC/IBAN information, as well as the money you wish to transfer. From there, it’s simply a matter of waiting for the transfer to complete – which should take the amount of time specified on the bank’s website. It may pay to reconfirm the fees and exchange rate that you found earlier with the teller, just for peace of mind.
Online: Search for the international money transfer system through the bank’s website. Once you find this, follow the given instructions and input the required SWIFT/BIC/IBAN information. Select the currency and check the details very carefully. Depending on the bank, you may have to input debit/credit card details in order to conduct the transfer (although some banks will simply deduct this from your standard account).
Step Four: Patience is a Virtue
Now you just have to wait and co-ordinate with the recipient. Once they receive the money, you’re all done and dusted!
If you’re looking for a cheaper, faster alternative to bank transfers, try OrbitRemit’s international wire transfers. We offer transactions for £5 or less and transfer within 1 – 2 working days. OrbitRemit offers generous exchange rates – check out our calculator on the top right hand side of the screen for more details!