Follow these seven tips on how to remit your money effectively.
How to lessen some of the pain when it comes to remitting
A new year has started and for many this is a time to set new financial resolutions and goals.
With many expatriates sending a healthy portion of their income to their home country, this means upping the amount they remit each month. But transferring your hard-earned dirhams overseas generally incurs fees and exchange rates don’t always fall in favour of the person sending the money.
However, by following these seven tips on how to remit your money effectively, you could find yourself gaining rather than losing.
1 You have the option of sharing the fixed fee for a transfer
When you remit money, you have the option of choosing who pays for the fixed fee cost of the transfer: you can pay, the receiver can pay or the cost can be shared. Every time you send money to someone, different types of fees/costs are involved, which may or may not apply, such as sending bank fees, intermediate bank fees and receiver bank fees, as well as the banks margin on the exchange rates.
If you decide to pay, you will be responsible for your bank’s and the intermediate bank’s fees, on top of the transfer amount and exchange rate. So the person you are sending the money to will receive the amount (minus, if any, the receiver’s bank fee).
2. To get the best rates, transfer money between Monday and Friday
You can get live exchange rates if you send money between Monday and Friday, when international markets are open. From Saturday to Sunday and on international public holidays, international markets are closed. So the exchange rates quoted are not live but a close estimate, which means they are usually higher than the live rate.
3. Always transfer money to the same bank abroad
When you transfer money from a bank in the UAE to a bank in another part of the world, normally up to three banks may be involved – your bank, the intermediate bank and the receiver’s bank. So it could be faster, easier and cheaper to transfer money locally and internationally between the same bank, thereby removing the necessity of an intermediate bank and the fees involved.
4. For quick transfer turnaround times, transfer money on Mondays or Tuesdays
It could take two to three working days to process a payment. Since UAE banks are closed on Fridays and banks abroad are closed on Saturdays and Sundays, it’s best to transfer money on Mondays or Tuesdays from your UAE bank account. This is because they are the first two international working days of the week (unless there’s a public holiday).
For example, if you send money on a Monday or Tuesday, in most cases, it will reach its destination during the same week because there will be enough time to resolve any issues or request any missing document or information. When you transfer money on a Wednesday, banks in the UAE will take one to two days to process it.
This means it normally will reach banks abroad during the weekend (Saturday and Sunday). Certain banks offer remittance services through their online banking channels and call centres that allow customers to ensure their transactions are completed smoothly and efficiently.
5. Transfer money before 10am
During weekdays most major currencies’ transfer cut off times are usually between 10am and 12pm GST. A two-hour margin is advised for processing provided that there is no missing information needed or discrepancies that need to be resolved before the transfer take place. Hence, if you make your remittance before this time, there is a better chance of it being processed on the same day and therefore, received the next day.
6. Online transfers are often faster and cheaper
Online transfers are often faster and cheaper because it reduces the probability of errors and gives the customer a notification on the spot. This reduces the time it takes to accept or reject the transfer, which cuts down on processing time and reduces the cost. Additionally, it is easy to use and secure.
7. Withdrawing money at an ATM
Doing so overseas is usually cheaper than exchanging money at the airport before travelling. When you exchange money at airport terminals, exchange rates are more expensive because of the higher business costs that are usually charged.
However, if you withdraw money from an ATM overseas, the cost is usually cheaper. When you withdraw cash from an ATM abroad using your ATM/debit card, you will be charged a fixed withdrawal fee and a margin on the exchange rate.
Gifford Nakajima is the regional head of wealth development, retail banking and wealth management, Mena, for HSBC