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Do you want the best international exchange rate when sending money abroad This guide highlights the cheapest ways to complete an international money transfer.

International Money Transfers

The beginners guide for sending money abroad.

wads of currency cash

Many of us have seen the daily queues at the various currency exchange houses across the Emirates, it is no surprise that the Currency Exchange and Remittance market in the United Arab Emirates is a billion plus Dirham industry.

According to the Foreign Exchange and Remittance Group ( FERG ) by the end of 2014 over AED 110 Billion was transferred by UAE expat workers.

The exchange industry is unique in the UAE compared to other global markets, this is because a large majority of transactions are international money transfers or remittance payments as opposed to regular currency exchange.

This step-by-step guide outlines charges to be aware of when sending money abroad, how to find the cheapest rates and what to consider if you are sending larger volumes home or making regular overseas payments. 

When you send money overseas what costs are involved?

There are two mains costs involved when sending money internationally, the fee and exchange rate.

currency conversion characters

What is the fee?

The fee is what the currency exchange house charges you to send a remittance. ( remittance is the act of sending money ).

Currency exchange houses have become the most popular choice for sending money as they normally provide a clear upfront price on the fee you pay. 

You can expect to pay a commission to the exchange house based on the sum of funds you transfer.  Depending on the exchange house the fee may also be fixed per transaction. Make sure the exchange house confirms the fee you must pay prior to handing over your money for transfer.

Exchange houses do have set transaction fees when you transfer money to specific countries.  Many providers such as UAE Exchange and Al Anasari provide a flat fee of AED 15 for transferring money to a bank in India or the Philippines.  You can expect to pay slightly more if you are sending money to a western country or sending cash.

Getting the best exchange rate.

The exchange rate is what the exchange house values your dirhams compared to your desired currency.

The exchange rate will vary with each provider and change on a daily basis.  It is affected by the availability of the currency in the market plus factors such as trade and political issues within the country you wish to transfer. 

The currency exchange will be able to confirm prior to the transaction how much of your desired currency you get after the transfer.

Always ask for the best rate and do no be afraid to ask the exchange house if they can provide a better rate than the one shown or originally offered. 

TIP: Some exchange houses offer no fee exchanges, this may seem appealing but they often then provide a worse exchange rate. Work out the cost of all the fees plus the exchange rate to understand ultimately how much in your desired currency you get

Do your own research, shop around then act.

With so many currency exchanges competing for your business shopping around will ensure you get the best rate.

The Central Bank of UAE states there are over 140 money exchange companies in the Emirates with a total combined network totalling 974 branches.

Exchange rates change almost hourly, when sending money it is best to do your research and take advantage by acting all in one go.

Use the moneyguide.ae currency calculator to give you an indication of the current daily market wholesale rates and benchmark from this rate.

Any rates higher than this rate are not worth using, if you are sending back larger amounts you will often be able to get a slightly better rate directly with your exchange house or by using an online currency specialist.

Currency rates are closely linked to global markets, to ensure you get the best live rate and not just an approximate rate, the best time to transfer your money with a physical exchange branch is during the European market working week, which is Monday to Friday.

TIP: Many factors affect your countries exchange rate such as politics, seasonality and country debt. Unless you need to send money urgently try moving your funds in a lump sum when the currency transfer rate is at its highest.

Transferring larger amounts (AED 15,000 )

We have just looked at remittance payments that tend to be for lower amounts and it makes sense to do in person.

currency and blue umbrella

However when the amount you wish to send is of a larger amount the safest and most competitive rates are only offered by specialist currency exchange broker.

These brokers are based online and use sophisticated trading platforms that require both  a high degree of security and authentication to use. 

Why use a specialist broker?

Using a specialist broker makes sense when you are remitting more than AED 15,000 or plan to make regular payments abroad.  

You can use this method for smaller remittances but the rate provided is often no better than the currency exchanges located in the Emirates various malls.

Online brokers will also offer forward contracts, a forward contract allows you to set up a transfer which will only take place once the exchange rate reaches the level you desire.

Reasons to consider using a specialist money transfer broker

  • If you are buying or selling property abroad.
  • You need to make regular payments- expat mortgages, investments, pension or debt.
  • If you are leaving the UAE and want to convert all your funds into cash.
  • When you are sending large amount of money to gain a better exchange rate.

How to do it?

The money is in the detail, the difference in exchange rates when transferring higher amounts can have a large impact on the final figures you receive.

currency with wings

Exchanging AED 60,000 with a difference in rate of 1% would mean a difference of AED 600 to your pocket.

A specialist company will be selling and buying large volumes of currencies (hundreds of millions of Dirhams) allowing them to provide better rates compared to the regular exchange houses. They will also be upfront with any additional fees that will be incurred using intermediary brokers.

To set up with a specialist broker as a minimum you will need to provide a valid proof of identification such as a passport and hold an address within the UAE.

Using your bank to complete the transfer

Many UAE banks offer this service, however it is not often that your bank is able to provide the best rate for your transfer.

Banks will charge you a larger commission and higher intermediary fees than a specialist online currency broker. You will not have the flexibility of preferred rates for larger amounts and often the transfer is slower and harder to track than with an online specialist.

Most banks in the UAE have money transfer features and for existing customers it could actually be an easier option if you are unable to open a currency exchange account online.

Here are a few banks offering international transfer services.

ADCB – They provide the ability to transfer funds through UAEFTS (UAE Funds Transfer System).  The remittance will go from your ADCB account to your chose recipient anywhere in the world.

Emirates NBD – They offer a directremit service and western union facilities within their online banking BankNET.

Mashreq Bank – They provide an international money transferring service allowing you to send and clear money in most of the world markets such as UK, US and India.

National Bank of Abu Dhabi – Their online banking allows you to send funds to any account internationally. 

TIP: Using your bank is generally a better option if you are sending funds to one of their bank partners. Most banks will have relationships with other banks internationally.  If you are sending from one bank to another where there is no relationship almost certainly additional fees will apply.

Summary of what to consider when sending money abroad:

  • Always check out the daily exchange rates for the currency you wish to transfer. You can do this by using the moneyguide.ae currency exchange calculator
  • If you are sending a low remittance of funds under AED 15,000 currency exchange houses in the malls will provide a flat fee for the transaction but be aware of any additional intermediary fees taken along the way.
  • If you are sending larger amounts of money above AED 15,000 you will get a better exchange rate and pay less commission using an online currency specialist.  Using a specialist will also allow you to transact at your chosen exchange rate and provide all costs including any additional fees in advance of the transfer.  You can apply for an account with an online broker through our money market services on our currency calculator page.

For more information on currency exchange and international payments visit our currency exchange section and view the latest wholesale rates.

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