If you need to send money overseas, a wire transfer is one option worth considering. This bank-to-bank electronic transfer method is simple and secure, but there are a couple of key drawbacks to be aware of before sending an international wire transfer.
A wire transfer is an electronic transfer method you can use to send money from one bank or financial institution account to another. The funds you transfer are sent via global networks administered by banks and other international transfer providers, such as the SWIFT network and the Fedwire network.
Wire transfers are sometimes also known as telegraphic transfers because they were originally sent using telegraphic wires. These days, you can initiate a wire transfer in online or mobile banking, or by visiting your nearest bank branch.
Once you provide the details of your wire transfer — such as who you're sending money to, their bank account details and the amount you're transferring — your bank then contacts the recipient's bank via the wire transfer network to relay the transfer instructions. The recipient's bank deposits the transfer funds into the recipient's account, and the banks then settle the payment between themselves.
You can send a wire transfer from your bank or credit union, or through transfer providers like Western Union, and domestic and international transfers are available.
In order to send an international wire transfer, you'll need to provide a range of details to ensure that the money you transfer is sent to the right account. The easiest way to send a transfer is through mobile or online banking.
You'll typically need to provide the following information to complete a transfer:
Once you've supplied the necessary information and submitted your transfer request, your bank can contact the recipient's financial institution to start the transfer process.
| Response | |
|---|---|
| I do not transfer money | 37.03% |
| App | 28.38% |
| Website | 19.1% |
| In person | 12.25% |
| Over the phone | 2.34% |
| Other | 0.9% |
Many financial institutions charge wire transfer fees. These vary from bank to bank and depending on whether you initiate the transfer online or in a branch, but you can generally expect a fee of between $0 and $30.
Check out the table below for a quick guide to the cost of sending and receiving a wire transfer with the "big four" banks.
| Bank | Fee for sending a wire transfer online | Fee for receiving a wire transfer |
|---|---|---|
| NAB | $0 | Up to $30 |
| ANZ | Up to $9 | Up to $15 |
| CommBank | Up to $6 | Up to $11 |
| Westpac | $10–$20 | Up to $12 |
If you're sending an international wire transfer, the other cost you'll need to consider is the exchange rate markup. Unfortunately, banks and other financial institutions don't convert your Australian dollars into foreign currency at the "real" (or mid-market) exchange rate. Instead, they add a margin of 3–6%.
Let's take a look at how that can affect the cost of a transaction when you're sending $10,000 overseas. As you can see in the table below, a 5% exchange rate markup means your recipient will get £265 less than if you got the mid-market rate for your transfer.
| Mid-market exchange rate | Bank international wire transfer | |
|---|---|---|
| Transfer amount | $10,000 | $10,000 |
| Exchange rate | 1 AUD = 0.5300 GBP | 1 AUD = 0.5035 (5% markup) |
| Amount received | £5,300 | £5,035 |
A wire transfer is a safe and convenient way to send money overseas, but it's usually not the cheapest. With lower fees and better exchange rates available elsewhere, not to mention faster transfer times in some cases, compare international money transfer services to get the best deal on your next international payment.
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