Let me share this very interesting article that was recently published in the SMH. The direct link is as follows but I copied and pasted the article for your easy reference in today’s Blog.
This will also apply to the Philippines. I should know. I personally do not use any of the banks to transfer funds from Australia to the Philippines. The exchange rate they use is low and the additional ‘bank fees’ along the way is breath taking. The sting at the end, i.e. the peso you get in the Philippines is hardest hit as the banks in the Philippines also take their share as well in bank charges and fees.
For those who have family back in the Philippines they are acutely aware of this and send their hard earned cash via money remittance companies all over Australia but for those you have recently developed a relationship in the Philippines from Australia then be warned.
Read the article below and start sending ‘smarter monies’ to the Philippines.
To compound the situation there are rumours around that the Australian dollar will de-value even more. If this is the case then ‘let’s squeeze every last cent and get better rates when sending Australian dollars to the Philippines’.
Non-banks give best deals on international money transfers
Consumers transferring money in and out of Australia could be doing themselves out of hundreds, or even thousands, of dollars using their big bank to make the transfers.
Big banks have much lower exchange rates on international transfers than non-bank currency transfer services.
The banks have higher overheads than the online-only currency transfer services, but there is a feeling that the banks could be taking advantage of their loyal customers.
John Brown received more than $5000 less than his twin sister who also lives in Australia after each received exactly the same inheritance from Britain.
The retiree and former wine merchant said if his sister had not received exactly the same inheritance, he would have not been any the wiser and have just accepted it.
Each is with a different big bank with different exchange rates.
“The moral seems to be that if you are expecting money from overseas, park it without changing it into Australian dollars and shop around for the best rate,” John says.
NOTE:John’s bank gave him a “goodwill” payment of $4000 after he complained.
By taking a few simple steps, consumers can save themselves a lot of money on international transfers.
Most foreign currencies are buying more Australian dollars now than they have for a long time. That makes it a good time to transfer money to Australia from overseas.
On the day Money checked the big banks’ websites, a transfer of £100,000 resulted in a difference of $2200 between the best and the worst bank rate. The average exchange rate of the big four works out at about $211,000.
But the really big difference is between the big banks and the major non-bank money transfer services such as OzForex, Western Union and AFEX.
For example, transferring the £100,000 using OzForex resulted in $220,000 going into the Australian account, or $9000 more than using the average exchange rate of the big banks.
One problem consumers making a transfer have is that they cannot control exactly when the transfer takes place and what exchange rate they will receive.
That is even a bigger problem now than normally. Currency markets have been particularly volatile for the past month with some big swings day to day.
One of the benefits of a service such as OzForex is that the transfer can be made to OzForex in pounds first. Then the money can be converted into Australian dollars at a known exchange rate.
That gives the consumer control over the timing of the transfer into Australian dollars.
Most of the services charge no fees above certain minimum amounts being transferred. With OzForex, for example, there is no fee as long as at least £3000 is transferred.
As a starting point, consumers can check with the Reserve Bank’s website, which gives current exchange rates, known as the inter-bank or wholesale rates.
The rates shown and updated daily are the mid-point between the buying and selling rates.
Of course, consumers transferring small amounts could never hope to get these rates. But it is a useful starting point by which consumers can compare rates before committing to a transfer.
Very roughly, big bank exchange rates are generally about 2 to 3 per cent worse for the consumer than the rates quoted by the Reserve Bank.
The rates of the non-bank transfer services are generally well below 1 per cent worse for the consumer than the rates quoted by the Reserve Bank.
Consumer group Choice reviewed money transfers last year. It said that though non-bank services are “better by a long shot” than big banks, some of the services are more transparent than others.
For example, it is not always clear if the consumer is seeing the inter-bank rate or the actual customer exchange rate that applies to the transfer.
The customer exchange rate will be there, but usually a click or two from the home page.
Choice also pointed out that PayPal can be an expensive way to transfer money for amounts of more than about $200.
That is because it charges a percentage of the amount sent.
The fee can be between 2.5 per cent and 4 per cent on top of the inter-bank exchange rate depending on the currency. It can be even more if sending money overseas using a credit card.
Also be aware that banks usually charge fees that are out of the control of the non-bank transfer services.
Usually the big banks charge a flat fee whether sending and receiving transfers.
On a transfer from Britain, for example, the British institution sending the money will likely charge a fee and the Australian bank receiving the money will also charge a fee. It is usually a flat fee of between $10 and $50.
One strategy for those who are concerned about the volatility in exchange rates for those transferring large amounts is use one of the non-bank transfer services and to stagger the transfers over several weeks.
It is important to know also that when sending Australian dollars to the Philippines there are about 4 known money remitters from Australia to the Philippines.
Personally I use https://www.forexworld.com.au/home.php. They are always competitive with their exchange rates. They have been around for a very long time and if there are any issues they are on to it ASAP.
Hope this has got you thinking carefully about saving monies when remitting Australian dollars to the Philippines. Mabuhay!
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