International Bank Transfer Fees and How to Avoid Them 2024
International bank transfers allow you to send or receive money anywhere in the world. But how much do international bank transfers really cost?
The true cost of international transfers can be pretty tricky to work out, as several different fees can apply every time you send a payment overseas. Plus, the costs can vary based on the provider you pick, the destination, the currencies involved and how fast you need your money to arrive.
This guide runs through the fees to look out for when sending an international bank transfer, including a comparison of some major US banks against a couple specialist services. Picking a specialist like Wise, WorldRemit or XE can be a smart way to avoid some of the costs involved with sending money overseas with a bank – and may mean your money arrives faster too.
How much is an international bank transfer? A Comparison
It’s important to compare the different options available before transferring money abroad, to make sure you find the best money transfer option for your specific payment. Transfer fees and exchange rates – as well as third party costs – can vary widely, so doing some research is essential.
And if you’re not sure what fees may apply to your international wire, don’t worry – we have more on that coming up later. Firstly, let’s compare the fees charged by some large US banks and specialist providers for international money transfers.
To give context, we’ll imagine an example payment – sending 1,000 USD online, to a friend in the UK, to be deposited into their GBP bank account directly.
|Exchange rate includes a markup
|Exchange rate includes a markup
|Mid-market exchange rate
|Exchange rate includes a markup
|Exchange rate includes a markup
*Fees and rates correct at time of research – 22nd February 2023
As you can see, in the example above, your recipient will get more if you send your payment with a specialist provider compared to a bank. Usually this is because of the extra fees rolled up in the exchange rate used to convert your dollars to pounds. These charges are tricky to spot, and push up the costs considerably.
Here’s a reminder of the fees for the specialist providers we looked at:
- Wise transfer fees: 7.40 USD, with no exchange rate markup
- Xe transfer fees: No transfer fee – small exchange rate markup applies
- WorldRemit transfer fees: 2.99 USD + a small exchange rate markup
How to Avoid International Wire Transfer Fees
You may not be able to avoid currency transfer costs entirely – but as we saw in the table above, you can cut the costs of sending an international wire significantly, by using a specialist service.
Specialist currency transfer providers focus only on sending money overseas, and have invested in new ways to process payments, which cuts costs. They can then often pass this onto customers in the form of better exchange rates and lower overall costs.
Using a currency transfer provider is extremely simple, too. You can set up an account and start sending money as soon as your account is verified for security, paying for your transfer directly from your bank account or with a credit or debit card. Specialist providers are fully regulated, and, in many cases, the recipient can get money directly into their bank account, pick it up as cash, or enjoy other ways of accessing their funds.
If you want to limit your international money transfer fees, it’s worth checking out providers like OFX, Wise, XE and WorldRemit. Here’s why.
1. Wise send money overseas using the mid-market exchange rate
With Wise you can send money to 70+ countries, and you’ll always get the mid-market exchange rate – the one you find on Google – when you need to switch your money from dollars to a different currency. Wise payments are arranged online or in the Wise app, and can arrive fast – more than 50% of payments are instant, or land within a few seconds, and 90% arrive in 24 hours. Learn more about wise here: full Wise review.
If you need more, you can also open a Wise account to hold 50+ currencies, and get paid like a local in up to 10 currencies. You can still send payments to 70+ countries – and you’ll always get the midmarket exchange rate and low transparent fees.
As a Wise account holder you can order a linked Wise card which you can use for spending in 170+ countries, with smart auto-convert technology to make sure your money is always exchanged to the currency you need with the lowest available fee.
2. OFX a specialist transfer service with personalized services
OFX provides a superb online experience for transferring your money, with excellent customer service. If you’d prefer you can also talk to a broker 24/7 – handy if you want to discuss your payment options or if you need some reassurance about your transfer. Learn more on full OFX review.
OFX currency transfers are fast and intuitive, they might offer a better exchange rate than the banks and most transfers will be with the recipient in one to two business days. There’s no upfront fee to spend your transfer, although one drawback is that you cannot pay for your transfer with a debit or credit card.
3. XE a transfer provider without transfer fees or minimum amounts
XE has been around for more than 25 years and does not charge any fixed fee for sending money overseas. You can transfer as much as 535,000 USD per payment, and XE only makes money on the exchange rate they offer you.
They support businesses and individuals and they provide friendly and accessible customer service. That said, it’s worth noting that you can only pay by bank transfer or wire if you’re sending 3,000 USD or more.
4. WorldRemit a transfer provider with cash pick-up options
WorldRemit is especially good for transfers to regions such as Asia, Africa and South America, and there’s no minimum transfer amount. They provide round-the-clock customer support in over 20 countries and have an online calculator so you know exactly how much your transfer will cost. Recipients will also have some choice when it comes to how they receive their funds, like cash pickup, although not all options are available in all countries.
International wire transfer fees explained
Banks are obliged to tell you the fees you’ll pay for any international bank transfer you make – but the real costs of your payment can still be pretty confusing and complicated, thanks to several different fees and – often – a whole bunch of different ways to set up your transfer.
As a general rule, transferring money in person will be more expensive than doing so online or through your bank’s mobile banking service. You’ll also sometimes find that transferring money to another account within the same bank is cheaper than transferring money to a different bank.
That said, the total cost of sending money overseas can still be pretty staggering. According to World Bank figures, the average cost of an international bank transfer can be around 6% of the amount transferred. These costs are usually divided into 3 or 4 different fee types – let’s break them down one by one.
1. Sender fees
The sender fee – usually described as a transfer fee – is normally transparent and set out in your account terms and conditions. However, sender fees may vary based on how you set up your payment – online or in person, for example – the value of the transfer, and where the money is headed.
Here’s a reminder of the upfront transfer fees for the providers we looked at earlier:
- Chase international transfer fees: 5 USD
- Wells Fargo international transfer fees: 0.80 USD
- Wise international transfer fees: 7.40 USD
- Xe international transfer fees: No transfer fee
- WorldRemit international transfer fees: 2.99 USD
2. Receiving fees
Depending on how you set up your payment, there are also likely to be receiving fees, including third party charges and costs applied by the recipient’s own bank. Third party charges can often creep in when you send a SWIFT payment, as the money can be routed through one or more partner banks, called intermediaries or correspondent banks, which can deduct a service fee as they process the payment.
In some cases, the sender can choose to cover some or all of these third party fees – but if not, they’re effectively paid by the recipient, as they are deducted from the payment before it’s deposited. That means the recipient gets less than you might expect.
3. Intermediary bank fees
If your transfer is processed through the SWIFT network, you may find that intermediary bank fees also creep in. These are paid to intermediary banks which help to process your transfer – and can’t always be predicted in advance. Because these charges are often deducted from the amount sent as it’s passed through the SWIFT network, this may mean your recipient gets less than you expected in the end.
Later on we’ll give some tips on how to avoid intermediary bank charges.
4. Exchange rate and currency conversion fees
Finally you’ll usually run into exchange rate fees when you send a payment overseas with a bank. These costs can be called an exchange rate markup or spread. Exchange rate fees are tricky to spot as they are usually a percentage fee added onto the exchange rate applied to change your dollars to the currency you need. Exchange rate fees can mount up quickly – until they’re often the highest of all the fees you’ll pay on your transfer.
In general, the overall costs of sending an overseas transfer with a bank can be less transparent than using a specialist provider like Wise or OFX. Specialist services also tend to offer better exchange rates compared to the banks – some, like Wise, pass the Google rate directly on to customers, and split out the full costs of the payment transparently so it’s easy to check and compare.
Here’s a reminder of how the providers we picked earlier handle exchange rates:
- Chase exchange rate: Exchange rate includes a markup
- Wells fargo exchange rate: Exchange rate includes a markup
- Wise exchange rate: Mid-market exchange rate
- Xe exchange rate: Exchange rate includes a markup
- WorldRemit exchange rate: Exchange rate includes a markup
Ultimately the fees you pay – and how high they are – can vary pretty widely depending on the provider you pick and the details of your payment. However, it’s helpful to know that specialist providers can often have lower overall costs compared to banks. This is usually because they use lower exchange rate markups – or don’t add any markup at all – which keeps the overall cost of payment down.
What factors impact the cost of international bank transfer fees?
When you send money overseas, there are several factors that can influence how much you’ll pay:
- Delivery speed: some providers and banks offer expedited services which might get your money moving faster, but can cost more
- Currencies and countries involved: Many banks and money transfer services have variable rates and fees depending on the country you’re sending to, and the currency you need to have deposited at the other end
- Payment provider: which payment provider you select can make a huge difference to the overall cost of your transfer – specialist services often beat the banks on costs and offer better exchange rates, too
How to avoid intermediary bank fees
Intermediary bank fees can add an extra 15 USD – 30 USD to the total cost of your payment when you send money overseas with the SWIFT network. The exact fee you’ll pay depends on the way your transfer is routed, which means you might not always be able to know the total cost in advance. Intermediary fees are deducted from the send amount as it’s processed, which means your recipient could get less in the end than you expected.
Intermediary bank fees creep in when your transfer is processed through SWIFT. In this system, transfers are passed through one or more intermediary banks until they reach their final destination – much like taking connecting flights or trains. Specialist providers have often built their own payment networks to avoid SWIFT, which allows them to keep the costs down and process payments faster, too.
Conclusion on fees for international wire transfer
Sending a payment overseas with your bank may be safe and familiar – but it could mean you’re in for higher fees and a worse exchange rate, compared with a specialist service like Wise or XE.
Banks usually arrange payments through SWIFT, which can mean you pay several different charges, and a fairly slow delivery time of 3 to 5 days. Specialist providers on the other hand, have come up with alternative ways to process payments, which brings down the overall cost – and which means they can often offer better exchange rates, too.
FAQs on international wire transfer fees
Which bank is cheapest for international transfers?
There’s no single cheapest provider for international transfers. It’ll usually come down to the specific payment you need to make. Specialist services like Wise and XE can often offer exchange rates which beat the banks, and lower overall costs. Compare a few options before you get started to make sure you get the best available deal.
What is the cheapest way to transfer money internationally?
International transfer fees vary widely based on the value of your payment, where you’re sending money to, and the specific bank or provider you pick. You may find that specialist services like Wise, XE and WorldRemit offer cheaper overall costs, with transparent fees and a better rate compared to a bank.
How much do US banks charge for international money transfer?
The fees US banks charge for international wire payments vary a lot. Usually online and mobile payments have a relatively low – or even no – upfront transfer fee. However, there are still costs rolled up in the exchange rate markup that’s applied. Arranging a payment in a branch or by phone usually comes with far higher costs. If you’re sending money overseas from the US, check your own bank’s fees compared to a specialist service to see if you can save.
Who covers the fees of an international bank transfer?
There are several fees involved with sending an international transfer, which can mean that both the sender and recipient end up paying some of the costs. If you want to limit the costs of your international payment, try using a specialist service like Wise which cuts the overall fee, and is completely transparent in what you’re paying for your overseas transfer.
How can I avoid a wire transfer fee?
You may not be able to avoid the costs of international payments entirely – but you can often cut the overall price you pay by using a specialist service like Wise or XE instead of your normal bank.