Cheapest way to transfer money internationally

Transferring money internationally isn’t difficult, but between the fees and the different exchange rates offered by each company, it can be difficult to know which is cheaper.

The key is to figure how much you’ll be getting in your hand (or the receiver’s hand).

So, let’s compare. We’ll be using US dollars to Philippine pesos for demonstration, but it works the same with any currency. As an example, we’ll use $1000 US dollars, but again, the amount doesn’t matter too much unless you are trying to send more than $10,000 and then everything gets more complicated because of US (and most country’s) trade rules.

Because we want to keep everything even, we’ll be deducting the fee from the amount sent first because we want to spend exactly $1000, not $1004.99, for example, if there’s a $4.99 fee. We’ll also assume your receiver will do cash pickup at an agency office, unless the service isn’t offered.

Of course, rates change every day, but all services have a set percentage that they want to make on the exchange rate, so the comparison is still valid.

If you are interested in the math, here is the explanation of each column:
– Total Spent is always $1000, our constant.
– Sending is 1000-Fee. We want to spend exactly $1000, so subtract the fee to get the amount to send.
– Rate is the exchange rate of the service today. This is how they get you. I’ve had people say “Oh Ria is free to send.” No, not really. It just has no separate fee.
– Receive is what you’d get in your hand after the transfer. It’s Sending * Rate.
– True cost in P is the Receive minus 50,720 (which is what you should get today with no fees and a perfect exchange rate). This is in Pesos.
– True cost in USD is dividing the True cost in Pesos by 50.72, which is the official rate.

True cost of transferring by Service

*Your ATM will be different. This is my ATM charges and exchange rate. I think you’ll find that Visa and Mastercard set the transfer rates on their network, so your rate would be similar to mine.
**InstaREM and Transferwise are bank to bank transfers only with no “cash pickup” option and is not instant. They take 1-3 business days.
***Don’t be fooled by the conversion rate on the XE’s main page. That’s the official rate, not their exchange rate. Also, they seem to have suspended transfers to PHP lately.
+Metrobank is a New York bank with many offices in PH. If you open an account, you can get checks direct deposited and so no transfer is needed. They have an exchange rate lower than the official rate
so it’s not totally free, but it is an inexpensive way to get US dollars into Pesos and free to use their ATMs to get your money.

So, what do I use? I have used Transferwise for the last 2 years. I just found out about InstaREM today, but the thought of setting up yet another account, ugh! I actually have a Metrobank account and have tried depositing money that way. But, near me, Metrobank is super crowded, even the ATMs. The ATMs also have a limit of 10,000 pesos (about $200) per day. One day, it took 45 minutes just to withdrawal 50,000P (about $1000), so for the 82 cents I would save, I instead use Transferwise to my (much less crowded) ChinaBank account. My backup, in case I can’t wait the 1-3 business days, is using my US debit card in an ATM and always withdrawal the maximum (10,000P) because the fee charged is the same no matter how much you get, so might as well get the max.

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