Paying off a mortgage abroad, transferring your pension, repatriating your foreign earnings to a bank account in your home country or lending a helping hand to a family member: there are many reasons to transfer currency. And when you arrive in a new country, you don’t always know where and how to exchange your foreign currency for the local currency. At Mondassur, we know that expatriates are always on the lookout for a stress-free solution that will save them as much time and money as possible. So here are a few tips on changing and transferring currency in a new country.
Before you leave, one of the first things you need to do is find out the current currency exchange rates. To do this, you can use a search engine or specialized websites. For example, XE allows you to convert all currencies and find out the current exchange rate. This will enable you to compare the different exchange rates offered by bureaux de change. Each exchange office is free to set its own rates and commissions. For example, to exchange dollars into euros, the exchange rate can vary by up to 10%, depending on the brand. It’s a good idea to exchange your currency before you go abroad. This way, you’ll already have some cash on hand, which you can use to take a cab when you arrive. However, don’t carry too much cash either. This makes you an easy target, because a traveler with a lot of luggage or a full wallet is easy to spot. Once you’re there, use your bank card whenever you can. Today, even in remote corners of the world, ATMs are easy to find. Most of them accept Visa and Mastercard, which means you can withdraw cash anywhere in the world at an attractive exchange rate. Before you leave, be sure to tell your banker to avoid any suspicion of fraud when you withdraw cash. Don’t forget to ask your bank for the maximum amount of money you can withdraw abroad. Finally, take a second bank card with you, in case you can no longer use the first.
Taking out health insurance abroad before you leave
Before you leave, it’s also important to think about your health. Mondassur is here to help, with a range of international health insurance plans. Depending on your profile, Mondassur will advise you to find the right health insurance abroad for your situation. What’s more, most Mondassur plans include health coverage for Covid-19-related expenses.
Where and how to change currency?
There are several places you can go to change your currency. You can go through your traditional bank, as long as you give it enough notice (a few days) so that it has time to collect the required amount in the new currency. Like bureaux de change, banks also have exchange rates, which they set themselves. You can also buy currency from online currency sales sites. You can pay by credit card or bank transfer. Whether in your home country or your destination country, you can go through a bureau de change. All you need to do is request a manual exchange transaction, and the exchange of banknotes or currencies into different currencies will be immediate. Be sure to pay attention to exchange rates in all cases, and to any fees or commissions involved in your transaction. Fees can be particularly high at bureaux de change, as they take advantage of their location. This is particularly true at airports, railway stations and tourist areas. As a general rule, whatever the country, the best exchange rates are found in banks and post offices. You can also use “official” exchange agents. These are very popular, especially in Central America, and often offer very advantageous rates, sometimes much better than market rates. You need to be particularly vigilant in such cases. Beware, too, of counterfeit bills, and don’t hesitate to recount currency. Carry out these transactions in high-traffic areas, not in isolated locations.
What to do if you have foreign currency left over after your return?
As a first step, don’t hesitate to share this information with friends and acquaintances who are planning to expatriate or travel to the same country as you. You can also visit travelers’ forums or applications that enable currency exchange between individuals. This is the case with the WeSwap application, for example, which works with a multi-currency MasterCard. The application charges a commission of between 1 and 1.4%. Alternatively, you can return your foreign currencies to exchange offices or your bank, which will also take a commission but much higher, if the currency is convertible abroad, which is not the case for all currencies.
How do I transfer currency from abroad?
There are a number of legal requirements to be met, depending on the country you’re in. Transferring money to a European country rarely poses a problem, but this is not necessarily the case in all countries. To avoid any penalties, check with the relevant authorities in your host country. In any case, transferring money from abroad to a European account has a cost. Fees vary according to the bank and the country from which you are making the transfer. In general, you need to take into account commissions charged by the sender’s and recipient’s banks, fees charged by any intermediaries, processing fees and the exchange rate applied by the bank. The exchange rate depends on each bank. For example, in 2018, exchange fees averaged 7.1% for a $200 transfer. To find out the rates applied by your bank, ask your bank advisor. When you make a transfer, you choose whether to do it in the currency of your host country or in euros. A transfer from outside the European Union to a European account may incur reception charges, particularly if you want to change currency. For example, if you’re in New York and want to transfer dollars into euros. Receipt fees charged by major European banks range from €15 to €25 per transfer.
The time taken to execute a transfer depends on the bank involved in the transaction. There is no statutory maximum time limit.
Regulations for repatriating funds from abroad
When it comes to transferring funds, regulations are strict to avoid any risk of tax evasion or money laundering. Today, it is possible to freely transfer capital abroad, but only with a declaration. Individuals subject to this obligation are all those entering or leaving the EU and wishing to make transfers of more than €10,000 without going through a bank. This obligation also applies to families, couples or any other persons with an interest in each other, when the sum of their funds reaches €10,000. If you intentionally make such an undeclared transfer, you risk a fine of 50% of the sum transferred, as well as confiscation of the total amount. If you didn’t make a declaration purely out of forgetfulness, you can take advantage of your “right to make a mistake”. In this case, you’ll have to regularize your situation with the Service de Traitement des Déclarations Rectificatives. You’ll still have to pay a fine, but you can negotiate it if you’re acting in good faith. Once you’ve arrived in your host country, you’ll need to declare your currency by completing a customs declaration. If you don’t declare your currency when you arrive, you also risk a fine of 25% of the total amount of currency carried, as well as confiscation of the currency. You can find full details of the situations requiring a declaration, and make your declaration with your country’s customs authorities. Depending on your host country and place of residence, you may also be required to declare any money transfers you have made from abroad. This means that you must declare transfers of funds to or from abroad, as well as any bank accounts you may have abroad. For example, if you return to your home country, you’ll need to declare any accounts you’ve opened or closed abroad. Check with the authorities in your country to find out whether you are subject to this obligation.
What kind of currency transfer can I make?
There are three main types of currency transfer:
– Spot contracts: These contracts allow you to make an immediate currency transfer.
– Forward contracts: Forward contracts enable you to fix a current exchange rate for a transfer that will take place at a later date. Since exchange rates are constantly changing, this type of contract is useful to prevent the rate from being unfavorable to you. With a forward contract, you’ll know exactly how much you’ll receive before the transfer date.
– Regular payments: If you need to transfer your salary on a regular basis, regular payment options may be the perfect solution for you. You can arrange for funds to be automatically transferred on a regular basis (for example, if you convert your salary to a monthly basis).
For a transfer including several types of currency (i.e. taking currency conversion into account) outside SEPA (to a country outside the European Economic Area), you can choose between 3 options:
– BEN transfer (Beneficiary): all transfer charges are borne by the beneficiary. The beneficiary must therefore pay the commissions of the banks involved. Fees are deducted directly from the amount transferred.
– OUR transfer: all costs are borne by the issuer. It is up to the sender to pay bank commissions and intermediaries.
– SHARE transfer: the sender pays commissions and fees to his bank, and the beneficiary pays commissions and fees to his bank. The sender and beneficiary also share the intermediary costs.
Here too, the transfer execution time depends on the bank.
Do I have to go through my bank to transfer currency?
Before you entrust your international payments to your bank, you should be aware that there are alternatives that can save you time and money. Banks are likely to offer you a lower exchange rate and a less personal level of service. A specialized broker, on the other hand, can save you money. The benefits offered vary from broker to broker, but the principle is generally the same:
– better exchange rates;
– reduced or zero transfer fees;
– faster transfers;
– personal, attentive customer service.
How do I choose the right broker to transfer money abroad?
There are many brokers to choose from. So, once you’ve considered the above options, it may be worth speaking directly to a broker to discuss your particular requirements before opening an account. Mondassur recommends that you use a company specializing in buying and selling currency, such as Transferwise, Transfermate, Western Union or others. In addition to the competitive exchange rates and level of service on offer, it is of course essential to ensure that money transfers are carried out in complete security. Our policyholders use this type of platform to pay their international health insurance premiums.
New solutions for transferring money abroad
More and more start-ups are developing platforms for online transactions. Transfers are faster and less costly. These platforms also offer new services, such as multi-currency accounts for payments in different currencies. These neo-banks are remunerated either by commissions on transactions, or by monthly subscriptions. TransferMate, for example, offers this type of international money transfer. The platform applies real market exchange rates, and transaction fees are transparent.
This solution can be particularly useful for expatriates who travel several times a year, or for professionals who frequently travel abroad.
