It is very common for teachers working overseas to send money back home for a variety of different reasons, such as student loan repayments, to pay a mortgage on a property, or simply to help out family members. Unfortunately, it is not always a straightforward process as there are several factors to consider, including transfer fees, exchange rates, and the actual time each method takes to complete. Below we take a look at some of the most common options.
What are the pros and cons of using a local bank?
Banks can offer a reliable option for transferring your money, although this largely depends on where you are in the world. If you are teaching English in a popular location such as Japan or South Korea, banks are often a good choice as they generally only charge a small fee and transactions typically clear within one or two days. However, if you are teaching in a less developed country, this option can be less reliable, more complicated, and open to higher fees. This is particularly true if your income is paid in cash and you do not have a bank account in your host country (common across Latin America and Europe).
One thing to remember when using banks to transfer money is that fees are usually charged per transaction. In this case you can save money by sending home larger amounts less often, rather than small amounts more often.
What are the pros and cons of using Xoom?
Xoom is operated by PayPal which has been one of the most trusted platforms for transferring money online for several years. Through this service you can transfer your money to 57 different countries worldwide using a bank account, credit card or debit card. Transactions are very fast between bank accounts and the recipient can also collect the money from a range of locations including banks and retail stores. On the downside, transfers can be affected by local banking hours and national holidays etc. Also, fees for this service can be quite high and the maximum transfer amount is quite low at only $2,999.
What are the pros and cons of using OFX?
The OFX service operates in 91 countries and crucially doesn’t charge any service fees. The exchange rates are also typically good and your transactions can be set to only go through once a certain exchange rate has been reached. The main drawback of this option is that it requires a bank account at either end of the transaction and transfers can take up to three or four working days to process. There is also a minimum transfer amount of $150.
What are the pros and cons of using Western Union?
Western Union is the largest money transfer/cash pickup provider in the world with around 500,000 outlets in over 200 countries right across the world. You can make a transfer using a bank account or credit/debit card via online or mobile platforms. The recipient can also pick up in cash on the same day if the deposit is also made in cash. However, bank to bank transactions can take up to five working days to process and quicker options can incur high fees.
What are the pros and cons of using MoneyGram?
MoneyGram is another huge company with 350,000 outlets in over 200 countries. Cash transfers can be collected within a few minutes of being sent and online transfers can take just a few hours to process. Unfortunately, fees for quick transactions can be high and there is an upper limit of $2,999 per transfer.
What are the pros and cons of using TransferWise?
This option provides user friendly online and mobile platforms that include sign up via an email address or Facebook. The service is available in 58 countries and there are no mark-ups on exchange rates. Also, you can send large amounts of money per transaction. On the downside, a bank account is necessary at either end of your transaction and transfers can take as much as a week to clear.
So, which is the best option for me?
As you can see, there is no single option that is best for all individual circumstances. Your decision will be based on a variety of factors, including the amount you need to send, how often you need to send it, how quickly the funds are needed at the other end, and where the funds are coming from (cash, bank account, credit card, etc). The main rule of thumb is that same or next day deliveries will include higher fees, while cheaper options are on offer if you are not in any particular hurry. The above information is only a rough guide of the most common options and you should do plenty of research yourself before choosing which method is right for your personal situation.