Sending money abroad / receiving money from abroad
Many of us will either need to send money abroad at some time or, hopefully, receive money from abroad! The different methods used to transfer cash can sometimes be confusing and the British Bankers' Association has produced this fact sheet to help clarify some of the issues involved.
How do I arrange to send money abroad?
Your bank will ask you to complete a form giving details of the beneficiary and if possible the name and address of their bank (this will be used by the bank to help ensure that the transfer is routed in the quickest way). You will need to sign the form as your authority and the bank will either send the transfer direct or hand you a draft drawn on a bank abroad, according to your preferred method of transfer.
What options do I have to send money abroad?
Banks will normally offer a standard transfer or an express transfer. The express transfer will usually be slightly more expensive but should reach the recipient more quickly. In both cases, the bank will make the payment direct to the bank abroad. For gifts, you may prefer to send a bank draft which will be handed to you to send on to the beneficiary.
How can I send money abroad in an emergency?
You will need to use some form of express transfer. This will be sent electronically between your bank and either its overseas office or its agent abroad. Although the money will normally be sent from the UK the same day, and will be received immediately at the overseas destination, local conditions such as banking hours, local holidays and time difference may mean that the transfer cannot be processed until the following day.
The time the payment takes to reach the recipient's bank account will again depend on local payment clearing methods in the country to which the money is being sent.
Do I send money in sterling or foreign currency?
The choice is yours. Generally speaking, it will be cheaper for the beneficiary for the transfer to be made in local currency. There may still be local bank handling charges to pay however. Transfers to the USA will normally be sent in US dollars.
What will it cost me?
This will depend on the method used and the amount transferred. The actual cost will vary from bank to bank. With transfers direct from bank to bank you can specify whether you wish to pay any foreign bank handling charges, which will mean that the beneficiary will be paid the full amount of the transfer.
Can I just send one of my cheques abroad?
While, in theory, there is nothing stopping you doing this, in practice foreign bank charges (and possibly UK bank handling charges) for handling your cheque would probably not make this an economical option.
If I receive a cheque drawn on a bank abroad, how can I exchange it?
Most banks will be able to present the cheque for payment on your behalf, but handling charges could be expensive as your bank will need to send the cheque to the bank abroad and claim payment on your behalf. Always ask your bank how much it will charge for this.
How quickly can I draw against a foreign cheque after paying it into my bank?
This depends on how the cheque is handled by the bank.
There are two methods which the bank can use to obtain payment on your behalf:
if the cheque is for a relatively small amount or if you have arranged a facility with your bank, it may be able to negotiate the cheque for you. This will be credited to your account immediately and you can draw against it straight away;
the bank will not however receive payment for this for perhaps two or three weeks and will probably charge interest for this period. If the cheque is returned unpaid your account will be debited and you will have to stand the loss;
- alternatively, the bank may collect the cheque on your behalf. The cheque will be sent to the bank abroad for payment and your account will be credited with the sterling equivalent on the day the proceeds are received. It could be several weeks before payment for the cheque is received by your bank.
How much will it cost me to exchange a foreign cheque?
This will depend on the method used and the amount involved. It is not normally cost effective to exchange cheques for small amounts.
Surely if a cheque is drawn in sterling I can pay it into my bank in the normal way?
Only if it is drawn on a bank which is a member of the UK clearing system. If the cheque is drawn on a bank abroad, it will still have to be sent to that bank to receive payment for it.
If I have the choice, what is the best way of receiving funds from abroad?
Either by a sterling cheque drawn on a UK bank (this can then be paid into your account in the normal way) or by a sterling transfer direct to your account through your own bank. Some banks may make a small charge for this, but it will probably be cheaper than either a transfer received in foreign currency or a cheque drawn abroad.
The type and cost of international services available from banks may differ considerably. The information contained in this fact sheet is intended as a guide only. Check with your own bank for specific advice before committing yourself to an international transaction.
For further information on how to prepare your trip abroad, please see "Know before you go", a service by the Foreign & Commonwealth Office (a link is shown below).
Know before you go - Foreign and Commonwealth Office