Wire transfers are the fastest and easiest way to send and receive money from companies, contractors and customers based in other parts of the world. But the associated fees are one thing you need to consider when sending money across international borders. This post will cover everything you need to know about fees associated with international wire transfers—and why they can be prohibitive.
The cost of your wire transfer depends on which bank you’re using and whether the transfer fee is outgoing or incoming. According to data from MyBankTracker, Fifth Third Bank charges $85 for each outgoing wire transfer—the highest out of any U.S.-based bank. Santander Bank offers the lowest incoming wire transfer rate: just $13 per transaction.
The average incoming transfer fee is about $15. But Discover and BMO Harris don’t charge any fees for their wire transfers. On the other hand, Chase, Bank of America and BB&T continuously increase transfer fees year over year.
The bottom line? International wire transfer fees vary greatly, but can rack up quickly. Be sure to do your research and choose an institution that meets your needs. If you have a qualifying account at some banks, like Citibank and Wells Fargo, your wire transfer fees may be waived.
Incoming transfers are considerably cheaper than outgoing ones, regardless of where you bank. For example, Fifth Third Bank—which charges $85 for outgoing foreign transfers—only charges $15 for incoming foreign transfers.
The cost difference is related to the amount of legwork required for each wire transfer. While it may be just a few clicks for you, each wire transfer is a complicated process that can cost banks quite a bit of money to complete successfully. Because they’re for-profit institutions, most banks typically charge clients for the time and resources needed to complete the transfer.
In most cases, you’ll pay a fee whether you’re sending money across state lines or international borders. But whether it’s incoming or outgoing, foreign wire transfer fees are a bit more expensive than domestic ones. This is because the process is a bit more complicated and time consuming when banks send money to foreign countries. Because no two countries are alike, banks must factor in other countries’ tax rates, as well as exchange rates. The bank may pass those extra costs along to customers.
As mentioned, you’ll need to take the exchange rate into account before continuing with your foreign wire transfer. Understand that large banks often set their own exchange rates, despite what the current prime rate is set at.
Unfortunately, a bank’s exchange rate is often higher than the prime exchange rate. This is another way for banking institutions to make a bit more on each wire transaction they complete. To ensure you pay as little as possible for each transfer, look at different banks’ fees as well as their current exchange rate.
The good news about wire transfer fees is that you may be eligible for discounts. If your business consistently sends money to other parts of the country or overseas, look into setting up repeating transfers. Scheduling repeat transfers can save $5 or so compared to doing each transaction individually. For example, Wells Fargo charges $30 for one-time domestic transfers but only $25 per transfer if you set up recurring transfers.
Some banks will also charge $5 to $10 less when you make your transfer through the bank’s website instead of in-person at the branch. Not only is online banking more convenient than waiting in line at the bank—it’s also cheaper.
We recommend doing your research and shopping around at different banks to see where you can get the biggest discount. You can also explore other options for sending money if wire transfer fees are drastically cutting into your bottom line, such as digital payments.
Your money is in good hands when you use a wire transfer service. There’s no risk of a check that’s lost in the mail or a rejected ACH payment, so you can rest easy knowing your money will make it to the recipient, and you’ll receive your full payment on time.
Additionally, wire transfers are accepted throughout the world. Whether you’re accepting payment from a customer in Europe or paying a vendor in Africa, a wire transfer is typically your best bet. And, if the fees become too much to bear, there’s always the prospect of digital payments, which offer many of the same benefits without the fees.
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