There are fewer things more exciting than seeing your pounds multiply when they turn into dollars or rand.
If you're lucky enough to be able to save some extra cash while you're in the UK, decided to buy a property back home or unlucky enough to be paying back debt at home, you'll need to know how to send money there.
But if you are sending money to Australia or sending money to South Africa, the same rules apply.
Do your homework
It is important to find the most cost effective way to send money home. The first lesson that you will learn is that banks can be very expensive. Some will charge up to 40 per cent of the money you are sending.
There is good news. These days you have a wide choice of money-transfer companies or agents. But before you start, it is wise to know what the exchange rate is and how it fluctuates.
Although predicting exchange rates is sometimes like looking into a crystal ball, there are trends that can be picked up. But most importantly, if you know the normal exchange rate, at least you will know in which direction it is moving. Picking the right time to send money can make a big difference in the amount you eventually receive in your home currency.
Transfer agents
The cheapest way to send money home is through an international transfer agent such as TNT Forex. TNT Forex offers lower fees, quicker transfer times, a secure online server and excellent rates.
You can also ask TNT Forex to alert you to favourable exchange rates via e-mail. Remember that you get the best deal when you combine a good fee with a favourable exchange rate.
What will influence my fees?
There is generally a fixed fee for sending money home, but some agents will offer you loyalty discounts if you send money frequently or subscribe to a “standing order”. That means that you will send a fixed amount on a specific day of the month for a specific period. You can even negotiate a fixed exchange rate for a specific period of time.
Also look out for agents that will offer you a free transfer in the month of your birthday, like TNT Forex or other promotional free transfers.
Normally a transfer will cost you at least £10 per transfer, so it might be wise to save up money and do one or two large transfers as opposed to many transfers of smaller amounts.
How long will it take?
Standard payments take three days minimum to arrive. You can ask for the funds to clear sooner, but be sure that your transfer agent and/or bank will charge you for it. Better to plan your transfers well in advance if you need to have money in your home country on any specific date.
What to look out for?
Ask for guarantees. Insist that your agent tells you in advance what the transfer will cost and when the funds will be cleared. Also ask them how you will be compensated if the money does not arrive in time, or at all.
Make sure of the exchange rate and avoid exchange rate confusion right from the start. At times an exchange rate can be favourable and you will ask your agent to send money home. If they take their time and the rate drops, you will lose money. Ask them to fix the rate and tell you exactly what it will be.
If you are sending money to somebody else, make sure you know the identification requirements for that person to gain access to the money.
Make sure you and your transfer agent complies with Money Laundering Regulations.