Forex Transfers

Until recently, most Australian expats automatically used Australian and international banks when transferring foreign exchange. However, the Australian banks apply margins on forex transactions for individuals which faithfully reflect just how lacking in competition is the Australian banking sector - and international banks are often no better, even in places such as the US.

We've indicated elsewhere that this isn't exciting but, particularly for those sending back money to Australia regularly, getting it right can be worth thousands of dollars a year. So it should be high up the "to do" list.

There are now a number of online currency transfer companies which offer better exchange rates than the banks and lower fees - plus the ability to arrange a transfer online without going anywhere near a bank branch. In that regard,we've had a partnership for a number of years with OFX, an Australian based company holding an Australian Financial Services Licence (No. 226484), to deal and give advice in foreign exchange. There are a number of companies operating in this area, but you should always ensure they are properly licensed.

You won't find communities anywhere in the world more knowledgeable about forex than expatriates, and OFX gives access to a huge range of data - useful, even if you do not use the service. The table below demonstrates the type of savings that could be made on a relatively large transfer from the UK to Australia, but the different fee structure makes it more economic to transfer smaller amounts, more often, than it usually does with the banks. This is just an example - the moral of the story is that you should shop around on forex transfers!

Example : Potential savings on a transfer to Australia from the UK using OFX vs. a Bank
"A" Bank
Pounds to Transfer
£ 200,000.00
£ 200,000.00
Exchange Rate
Client Receives AUD
Transfer Fee UK
£ 30.00
Receiving Fee Australia
Potential Saving via Ozforex (AUD)