Explaining All About Money Transfer Exchange Rates and Fees

One can be ignorant in given circumstances and get away with it. But when it comes to sending money abroad there is a price to pay for being ignorant. The process of transferring money from your country to another country is not only complicated but also masked.

As an ordinary person without the knowledge of foreign currency exchange rates and middlemen, you lose money every time you do money transfer international deals. So, what you must do now is to figure out the costs of moving cash to another country. These costs are established in two ways: currency exchange rates and fees.

The exchange rate

It is extremely unstable and can change several times a day in a matter of hours. It refers to the quantity of foreign currency that will be produced for every local currency you send. In order to make money on an international transfer, providers alter the foreign currency rate by raising the amounts.

As a result, you could pay company X a higher exchange rate than you would pay company Y to send equal amounts of money to the same global destination. Also, you should always look to get a guaranteed foreign exchange rate rather than an estimated rate even though that might not work in given regions.

Fees

Almost every international money remittance services charge fixed or variable fees. The fee can vary based on the amount of money being sent, how fast you want it delivered, the method of funding and whether you are sending funds online or offline. Sending cash via an offline agent is more expensive.

Besides the exchange rate and fees, you have to know the cost you will incur in total. It will definitely include the sending fee, exchange rate and receiving fee. Nevertheless, you can ignore the receiving fee if the beneficially agrees to pay it.

To determine the sum of the currency that will be delivered overseas, multiply the number of local currency denominations you are sending by the foreign exchange rate. If you get a higher figure, you will know that the service provider you are using is cheap and considerate.

Establishing the most appropriate quote

After doing all the computations described above, you should choose the best quote. This is not as easy as you might think because you are dealing with varied exchange rates and fees. One means though, is to deduct the sending fees from the amount you intend to send.

Thus the company that delivers more foreign currency for the funds you want to send gives you the best value. Another means is to calculate the effective exchange rate. You should first get the total sum of funds being sent and total fees. Then divide it with the total currency to be received on the other end.

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