Money Transfer Explained - YouTube

Alright this is a public service

announcement for all my friends around

the world who need to move money from

country to country. Perhaps you worked

overseas for a bit and you saved some

money and now you need to bring it back

home or maybe you're moving somewhere

and you need to put a deposit on a flat

or buy some furniture and you need to

bring the money over before your first

paycheck arrives. So how do you do it?

How do you transfer the money?

Well a lot of people end up milking the

ATM and that is the worst way to do it. It is

super expensive. So the best way that I've

found to transfer money over is to use a

money transfer service. If you don't want

to watch the entire video just check the

links in the description. I am linking to

3 money transfer services that I've

used that I like and you can just check

them out already.

Now before we dive too deep you need

to understand that no matter which

technique you use to move the money you

will end up paying. Nobody's going to move

your money overseas for free. You end up

paying via fees and you pay via the

spread. The spread is the part most

people don't check and it's by far the

most expensive. So what is the spread?

Well, the spread is the difference

between the actual mid-market rates and

the rate that you'll end up getting for

your transaction.

Let's take an example that's easy to

understand. Let's say you want to move

five thousand dollars from Australia to

Canada and that today's exchange rate is

a very easy 1 Australian dollar equals

1 Canadian dollar. First there's the

obvious milking the ATM. Australian

bankcard. Canadian ATM. Pop the card in,

get five hundred dollars out. Your bank

will charge you perhaps four dollars in

fees and the ATM, because you're using a

foreign card, will also charge you four

dollars in fees.

So that's eight dollars total fees. When

you look at the small print on the

receipt you realize that you're not

getting the exchange rate of the day

which was 1 Australian dollar equals

1 Canadian dollar. You're getting a

different exchange rate. The exchange rate you're

getting is 1 Australian dollar equals

94 Canadian cents so what happened

there?

Well the spread is

what happened there. Your bank is

charging you a six percent spread. So how

much did it cost to move $500 then? Well, we

paid eight dollars in fees plus six

percent spread which means that the total

cost of the transaction was 38$.

Now remember we didn't want to

move $500 we wanted to move $5,000. This

means that if we went back to the ATM

10 times, because of the daily

500$ limit, the total true

cost of our transactions would be 380$.

That's insanely expensive! So there must be

another way.

So the other obvious way is to use an

international wire transfer at your bank.

Now I looked at my own bank and they charge a

$22 flat fee plus the same 6%

spread. That means in this case that the

total cost of the transaction would be 322$.

So it's a bit cheaper than the

ATM but still very expensive. So that

brings us to our third option, my

favorite, the cheapest, which is using an

international money transfer service. The

way these services work is they have bank

accounts all over the world and you

transfer locally and they do the

International part of the transfer. So

the first one is XE.com. XE charges a

1.5% spread and no fees so the total

true cost of the transaction would be $75.

The second service is TransferWise.

TransferWise charges a 0.7% fee

and no spread so the total

true cost of the transaction would be 35$

And finally CurrencyFair

charges a 0.56% spread

and no fee so the total

true transaction costs would be 27$.

Now that's insane

when you think about it! If you compare

milking the ATM at 380$

dollars with the cheapest money transfer

service at $27 that's the massive

massive difference.

Alright! So money transfer services are

cheap but how do you use them?

Well the first thing you need to do is

open an account with them. Usually that

means going on their website and sending

them some photos or scans of

of ID documents. Most of the time

you need two pieces of ID. For instance a

passport and a driver's license and

proof of address like a recent utility

bill or anything with your name and your

current address on it. Once your

account is up and running

how do you move money around? Well you

need to set up a trade.

So you go on the service's website or

mobile app and set up the trade by

telling the system I want to move that

much money from country A to bank

account XYZ in country B. Now once you

set up the trade that system will give

you important local bank detail

information for you to transfer the

money. So the next step is simply to go

on your own bank's website, the same

website you use to check your balance or

pay your bills, and do a local transfer

to the money transfer service. And that's

it!

Now all you have to do is wait for the

money to show up at the other end!

Alright so out of the three money

transfer services that we looked at: XE

TransferWise and CurrencyFair which one

do I recommend? Well it's simple I

recommend all three of them. Setting

up an account with them is free -- it's a

bit of work -- but once you've

done it once it's good for ever and

you're good to go. So whenever you move

just pick the service that's giving you the easiest and fastest and

the cheapest rate. Also if you look in

the description I put a few referral

links that gives you a free transfer

with Transferwise and a ree transfer

with CurrencyFair plus some bonus cash

if you transfer above a certain amount.

So really if you subscribe to both of

them you will get two free transfers

instead of just one.

So freebie why not? So that's it I hope

you found this video useful give me a

thumbs up if you liked it subscribe to

the channel if you have any questions

put them in the comments below and I'll

check it out and see if I can help you

out.

So in the meantime have a nice one and

I'll see you later!