(Article contributed by Jason Landrum a OFX International Money Transfers.)
In today’s international job market, global mobility has allowed Americans to move around the world. The ability to work from a beach bungalow or a mountain retreat is an appealing notion. And, for many, living abroad can only be possible with “money mobility.”
Whether you’re supporting family back home, setting up a bank account in a new country, or paying ongoing expenses elsewhere, you should be able to do so efficiently and effectively from abroad.
Here are five considerations to be more money mobile for Americans living abroad.
1 – Cost
Global currency markets move fast, so find a partner that merges global knowledge with local expertise to help you make informed decisions about your money transfers.
Fees relating to transferring money abroad can be confusing. Here are a few terms to help you evaluate a partner to help you move money.
- Transaction Fees: a fixed and/or variable fee that is charged per transaction.
- Margin: margin (%) charged on top of the “Interbank” exchange rate. The Interbank exchange rate is the common market rate that banks utilize to charge for bulk currency transactions.
- ACH or Wire Fees: money transfer platforms use ACH transfers (equivalent to a domestic transfer) to avoid traditional bank wires fees. Their ability to do so can depend on the countries you are transferring to and from and the amount you are transferring.
- Variable Considerations: fees also may vary based on the transfer amount, so it is important to review the fee structure based on your specific money transfer plans.
2 – Customer Support
Managing your money globally does not have to be complicated. A money transfer specialist should be able to help you navigate issues and complexity, breaking foreign exchange down so it is simple and easy to understand. Get your money where you need it fast and find a provider that allows you to make global transfers online, in app, or with a real person. For many people, access to live support might not only be helpful, but reassuring.
3 – Safety
When you move money around the world, you want to know it is going to get there safely. Your money transfer provider should meet and exceed the highest global regulatory standards for secure transfers.
Money service providers are required to fulfil identity or “Know your Customer” requirements. Money transfer platforms have done a good job with this onboarding process and built processes assuming the customer may not be present in their home country. Traditional banks at times require expats to be physically present to send an international wire. Obviously, this is not always possible with a global expat and can cause significant delays and unplanned expense.
In general, sending money via a bank takes longer since it is moving through a series of intermediary banks. Banks also may require additional documentation based on the transaction which can take extra time to deliver. By avoiding the international wire process when possible, money transfer platforms typically move money faster which can be a big benefit for expats on a tight timeline.
4 – Money Management Tools
Money transfer platforms offer access to money management tools that previously were only available to large customers. However, not all service providers offer them so if they are important, confirm their availability. Here are a few tools that can help expats mitigate currency fluctuations:
Want to play it safe with your money? Protect against market movements with a forward exchange contract and lock in your rate for up to 12 months. This may protect against market movements, specifically a depreciation in the value of the currency you are holding.
Set the exchange rate that suits your needs with a limit order. When your target rate is reached, your provider can complete your transfer at the rate you set. It’s that simple.
5 – Summary
Whether you’re buying a house, paying for school, or transferring retirement income, take the stress out of moving money. Following these tips can get your comfortable with pricing and prepare you for the steps you’ll need to take to select a global money service provider.