Transfer money abroad and change currencies

Paying a home loan abroad, transferring your retirement, repatriating your foreign income to a bank account in your home country or helping a family member: there are many reasons for transferring foreign currency. And when you arrive in a new country, you don’t always know where and how to change your currencies against the national currency of the country where you are. At Mondassur, we know that expatriates are always looking for a solution that will save them as much time and money as possible without stress. So we offer some tips for changing and transferring your currency to a new country.

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How do I get foreign currency before going abroad?

Before leaving, one of the first things to do is to do some research to know the current exchange rate of currencies. To do this, you can go to a search engine or to specialized websites. For example, XE can convert all currencies and know the current exchange rate. This will allow you to compare the different exchange rates of the exchange offices. Indeed, a bureau de change is free to set its rate and its commission. For example, to exchange dollars for euros, the exchange rate for different brands can vary by up to 10%. It is advisable to change your currency before going abroad. This will allow you to have cash already on site that you can use in particular to take a taxi on your arrival. However, don’t take too much cash with you either. This makes you an easy target, as a traveler with a lot of luggage or with a full wallet can be easily noticed. Once there, as soon as you can, use your bank card. Today, even in remote corners of the world, automatic teller machines (ATMs) can be easily found. Most accept Visa and Mastercard, allowing you to withdraw cash anywhere in the world while benefiting from an attractive exchange rate. Before you go, be sure to tell your banker to avoid suspicion of fraud when you are withdrawing money. Also remember to ask for your authorized withdrawal limit abroad, you can take the opportunity to negotiate it. Finally, take a second bank card with you, in case you can’t use the first one anymore.

Take out health insurance abroad before leaving

Before leaving, it is also important to think about your health. Mondassur is there to support you, with its various international health insurance formulas. According to your profile, Mondassur advises you so that you find the right health insurance for abroad adapted to your situation. In addition, the majority of Mondassur insurance companies include health coverage for costs related to Covid-19.

Where and how to change your currencies?

Several places are available to change your currencies. You can go through your traditional bank, as long as you notify it sufficiently in advance (a few days) so that it has time to raise the requested amount in the new currency. You should know that like exchange offices, banks also have exchange rates and set them themselves. You can also buy currency from online currency trading sites. You can pay by credit card or by wire transfer. Whether in your country of origin or in your country of destination, you can go through a currency exchange office. All you need to do is request a manual currency exchange transaction and the exchange of banknotes or currencies in different currencies will be immediate. Pay attention to exchange rates in all cases and fees or commissions during your transaction. Fees can be particularly high at exchange offices as they take advantage of their situation. This is mainly the case at airports, train stations and tourist areas. Generally, regardless of country, the best exchange rates are found at banks and post offices. You can also use “official-unofficial” brokers. They are very popular especially in Central America and often charge very advantageous rates, sometimes much more advantageous than market rates. You must be particularly vigilant in these cases. Also watch out for counterfeit banknotes, don’t hesitate to recount the currencies. Carry out these transactions in high traffic areas, not in isolated places.

What if there is foreign currency left after the return?

First of all, do not hesitate to share your knowledge with them if some people are planning to emigrate or travel to the same country as you. You can also visit travel forums or apps that allow currency exchange between individuals. This is the case with the WeSwap application, for example, which works with a multi-currency mastercard. The app charges a commission between 1% and 1.4%. Otherwise, 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 to transfer currency from abroad?

A certain number of legal obligations in accordance with the regulations in force depending on the country where you are located, must be observed. Transferring money to a European country is rarely a problem, but it is not necessarily the case in all countries. To avoid any penalties, check with the competent authorities in your host country. Either way, transferring money from abroad to a European account comes at a cost. The fees vary depending on the bank and the country you are making the transfer from. In general, it is necessary to take into account the commissions of the banks of the sender and the recipient, the fees applied by any intermediaries, the handling fees and the exchange rate applied by the bank. The exchange rate depends on each bank. For example in 2018, the exchange fee averaged 7.1% for a transfer of $ 200. To find out the rates applied by your bank, check with your bank advisor. When you make a transfer, you choose whether you want to do it in the currency of your host country or in euros. A transfer from abroad outside the European Union to a European account may incur reception costs, especially if you want to change currency. For example, if you are in New York you want to transfer dollars into euros. The reception fees applied by the main European banks vary from € 15 to € 25 per transfer.

The transfer execution time depends on each bank involved in the transaction. There is no maximum time limit set by the regulations.

Regulations for the repatriation of funds abroad

Regarding the transfer of funds, regulations are strict to avoid any risk of tax evasion or money laundering. Today it is possible to freely transfer capital abroad, only with a declaration. The individuals subject to this obligation are all those entering or leaving the EU and who wish to make transfers of more than € 10,000 without going through a bank. This obligation also applies to families, couples or any other person having interests towards each other, when the addition of their funds reaches 10,000 €. If you intentionally make this type of unreported transfer, you risk a fine of up to 50% of the amount transported, as well as confiscation of the total amount. If you have not made a statement purely by forgetting, you can bet on your “right to make mistakes”. In this case, you will have to go and regularize your situation with the Corrective Declarations Processing Service. You will still get a fine, but you can negotiate it if you are in good faith. Once you arrive in your host country, you must declare your currency by completing a customs declaration. If you do not declare your currency upon arrival, again you risk a fine of 25% of the total amount of currency transported and also currency confiscation. You can find all the details on the situations subject to a declaration and make your declaration to the customs of your country. Depending on your host country and your country of residence, you must also declare money transfer transactions that you have carried out from abroad. You must therefore declare transfers of funds to or from abroad as well as any bank accounts you have abroad. For example, if you are returning to your home country, you must report any accounts you opened or closed abroad. Check with the authorities in your country to find out if you are subject to this obligation.

What kind of currency transfer can I do?

There are three main types of currency transfer:
• Spot contracts: These contracts allow you to make an immediate currency transfer.
• Futures contracts: Futures contracts allow you to fix an exchange rate instantly 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 futures contract, you will know exactly, and before the transfer date, how much you will receive.
• Regular Payments: If you need to transfer your salary on a regular basis, the 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 monthly salary).
For a transfer including several types of currencies (that is to say taking into account a currency conversion) outside SEPA (to a country outside the European Economic Area), you have the choice between 3 options:
• BEN transfer (Beneficiary): all costs for the transfer are the responsibility of the beneficiary. He must therefore pay the commissions of the banks in question. The costs are directly deducted from the amount paid.
• OUR transfer: all costs are the responsibility of the issuer. It is up to him to pay the commissions of the banks as well as the intermediaries.
• SHARE transfer: the issuer pays the commissions and fees related to their bank and the beneficiary pays the fees and commissions related to their bank. The issuer and the beneficiary also share the intermediary costs.
Here too, the transfer execution time depends on each bank.

Do I have to go through my bank to make a currency transfer?

Before you entrust your international payments to your bank, you should know that there are alternatives that can save you time and money. Banks will certainly offer you a lower exchange rate and a less personal level of service. On the other hand, a specialist broker can save you money. The benefits offered vary according to each broker, but the principle generally remains the same:
• better exchange rates;
• reduced or even zero transfer fees;
• faster transfers;
• personalized and attentive customer service.

How do you choose the right broker to transfer money abroad?

There are a lot of brokers. Also, after considering the above options, it may be helpful to speak directly with a broker to discuss your specific requirements before opening an account. Mondassur advises you to use a company specializing in buying and selling currencies like Transferwise, Transfermate, Western Union or others. In addition to the competitive exchange rates and the level of service offered to you, it is of course essential to ensure that money transfers are safe. Our policyholders use this type of platform in particular to pay their international health insurance contributions.

New solutions to transfer your money abroad

More and more start-ups are developing platforms for carrying out online transactions. Transfers are faster and cheaper. These platforms also offer new services such as multi-currency accounts that allow you to pay in different currencies. These neo-banks are remunerated either by commissions on operations, or by monthly subscription. For example, TransferMate allows this type of international money transfer. The platform applies real market exchange rates and transaction costs are transparent.
This solution can be particularly useful for expatriates who travel several times a year or for professionals who frequently travel abroad.

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