Did you know that Indian migrants sent US$5.71bn to other countries in 2017? There is a sizeable diaspora population of Indians in Australia—Australia is one of India’s top destinations for further education. Some students find it difficult to get established in Australia, as they must only work a certain number of hours per week and the cost of living is high compared to other countries. Likewise, successful Indians send money home for Holi and Diwali each year. So how can you move money to and from Australia without losing too much in the process? We show you how.
What not to do—using banks or credit cards
Banks and credit cards normally use whatever exchange rate is available for that particular currency at the time you send or receive money. Spot conversions or spot prices are two terms used to describe this kind of conversion. Oftentimes, this results in a poorer exchange rate, which means less money is left over when all is said and done.
Even worse, it passes through a millstone of fees and levies. Your credit card company could charge an international transaction cost of 1% to 3% on your money, which is then further reduced by an additional foreign exchange fee. The beneficiary will receive even less money if the payment processor additionally charges a fee at the other end. Note that there are some cards that don’t charge foreign exchange fees.
Instead, seek out a specialised currency transfer merchant, who will typically provide much more affordable costs or margins.
Using foreign exchange and money transfer companies
The best thing to do at first is compare international money transfer options. There are many on the market and have their own fee structures—some may work on commission; others may charge set fees or percentages. Ensure they are reputable by looking up independent reviews online.
On the whole, specialised foreign exchange brokers or money transfer companies rank among the best in terms of low fees and customer support. Some exchange broker sites will only execute trades at certain times, so you get the best possible rate. Here’s how it works.
If you know that you’re going to send money at a certain date—let’s say Diwali—you can set a stop or limit order to automatically execute the exchange when the market is at its lowest rate, so your recipient gets the highest possible amount at the other end.
Large amounts of money—over $10,000AUD
Consolidating your transactions and waiting for a favourable rate is one way to ensure more of your money ends up in the hands of your recipient, as they may even offer more favourable rates or lower commissions; but this can be complicated in some cases.
Big amounts of money either coming in or going out of Australia will be reported to AUSTRAC to ensure the transaction is not for criminal purposes. You also have to look out for Australian Government GST or if it attracts income or fringe benefits tax—although most gifts are tax-free.
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