Ben Todd | Jun 2, 2017 | 1
Cheapest Ways To Send Money Online
There are many ways to transfer, send and receive money online. One cannot say which will be the cheapest for you because it depends on your location, your currency, the amount you wish to send, where you wish to send it, how quickly you wish to send it, which bank you are with, which accounts you have, and which accounts you do not have.
If you want our #1 choice right away, consider using Transferwise to send money abroad. It’s by far the easiest and, if you are converting between currencies, gives the best exchange rate vs all the other methods.
There are a lot of variables that will affect the cost of your transfers and receipts, so here is a comprehensive list of all the modern and applicable ways you can use the Internet to send, transfer and receive money.
But, we can’t tell you which one of these will be the cheapest for YOU personally, because that’s really depending on the factors given above.
Your Bank ‘Should’ Offer The Cheapest Fund-Transfer Options
The precursor “Should” was inserted in the header because there are plenty of banks that will charge you fees for sending money, and there are plenty of accounts that add large fees onto funds transfers.
If you are transferring money from one of your accounts to another, then it should be free in most cases. If you are transferring money to another private citizen within your own country, then that is usually free too. Quite often it is free to transfer money to companies too, either via transferring it or via paying a bill via the banks Bill Pay system (whatever that may be).
If you are transferring money from a savings account or from a business account, then you are probably going to be charged a fee. However, your bank should offer very competitive fees for transferring money within your own country, which should help steer you clear of using other online accounts to transfer your money.
The takeaway here is that while you may think your bank will give you the best deal on transferring money online to another party, they may not…and in fact, transferring money through your bank may be one of them ore expensive methods. So you need to research the exact details about what your bank will actually charge you and compare.
Certainly for large amounts OR for transferring money to other countries where there is an currency exchange, your bank will likely be one of the worst options.
Bank Transfers Overseas
(Often Cheapest between Same Bank to Bank Transfers)
If you are transferring money between individuals who both have accounts with the same bank in the same country, this may be the cheapest option. And for some banks that have banks branches in different countries, they won’t charge you to send money.
However, it can be complicated and this depends on the BANK.
There are some banks that allow you to transfer money overseas for free, and many that allow you to do it all by yourself without needing verification or help from their bank staff. Many times, there are fees and problems you may encounter.
The key here is that you can send the money online by logging in to the bank’s website and directly do the transfer yourself.
One of the biggest problems is that your account is not set up to transfer money abroad, and so there are no options available to you. There are many times when bank accounts are not set up to receive money from other countries, which may hold up the money being transferred.
One of the biggest and most common problems revolves around currency exchange. Usually you are going to take a hit in terms of conversion fees, and there are some banks that simply will not allow you to transfer money in anything other than your own currency, which means the recipient’s account must be set up to receive your country’s currency.
Nevertheless, there are many specialized banks that have very attractive fees and rates for sending money to other countries, which means transferring or sending money via your bank is often rather cheap when compared to other online options. You may encounter problems transferring money to certain countries. For example, there are often restrictions against sending money to Russia because they keep using it on their war machine to oppress and invade smaller countries. Plus, there are restrictions on sending money to countries that harbor terrorists and such.
Keep in mind though, you need to look at what sort of exchange rate your bank gives you. Unless you have a specialized bank account, you probably will pay a not-so-good exchange rate. To transfer into another currency, you should either look at a Currency Exchange Dealer, which gives good exchange rates, or a Peer to Peer Currency Exchange system such as Transferwise. These companies can literally be 90-95 percent cheaper to transfer money from one currency to another than OTHER options.
Read our article on the best ways to send money abroad.
Peer to Peer Currency Exchange Markets
(absolute cheapest way to send money abroad)
This is a brand new, novel way of transferring money abroad via online. Specifically, this works if you have one currency and need to convert to another currency at or almost at the interbank currency exchange rate. Sometimes you can even get a better rate than the interbank rate (which is impossible anywhere else).
And of course, you do this ONLINE from the company’s website.
The way it works is these companies allow two individuals who are in different countries to exchange money without actually having the money cross the border. The way this works is the company acts as an intermediary and has bank accounts in both countries. Individual A sends money in their bank account to the company and individual B sends money in their country to the company bank account. The company then just directly gives each person the exchange at the best market rate directly. Keep in mind, no actual money has crossed the border here.
There are two big players here:
Both are similar, though between the two, currency fair offers a slightly better rate if you are willing to wait for longer transfers. Both options offer you at least 90% cheaper exchange rates. Currency Fair, in some cases can even give you a better than market exchange rate. If you are transferring large sums, this can save you a lot of money.
- Read our article on the best ways to send money abroad.
- Read our CurrencyFair review
- Read our Transferwise review
Pay A Bill Online
(cheap way to pay bills without costing anything)
One way to move money from one account to another is to pay a bill. Let’s say you need the money in your online account to pay your utilities bill but you do not have the money in your account and you cannot get it in there. Simply pay the bill with your other account or other card.
This is especially handy if you usually pay your bills with your checking account but don’t have the money, so you use your credit card instead.
If you want to send money to a friend or associate and have no way to do it, then have them issue you a bill via an online payment system and pay them that way. If your friend or associate has an eBay account or maybe an eCommerce website, then you can pay through there without them sending you something in return.
The only issue here is that there is some extra work involved. If you are trying to use this to transfer money to an individual, they must issue a bill to you both need to be using the same bank network for the bill issuing to work — so this may not be a practical solution for some.
Move It from Your Credit Card By Paying An Online Account
Let’s say you want to get money out of your credit card. There are few stores that will allow you cash back if you pay with a credit card, so you will have to draw it from an ATM and pay the fees. However, this is not going to work if you want the money moving online. You may need the money in your account because you are about to overdraw, or maybe you have snapped your card and need money now. Or, maybe there are no ATMs nearby and you need your money in your bank account—what do you do?
You could call your credit card company and ask if they will put some of your credit card money into your bank account, but most are going to refuse, so another option is to pay an account that you can withdraw into your bank account. For example, you can use Skrill or PayPal and create an invoice that you send to another PayPal or Skrill account you set up. The accounts will need to have different cards linked to them and each will need a different email address.
Send an invoice or payment request from one account to the other, and use your credit card to pay for the invoice. They are going to charge you a payment receipt fee, but you will have the money in your PayPal or Skrill account that you may withdraw to your bank account.
Do A Balance Transfer Between Credit Cards
A common method for shifting money from one place to another is to transfer it from one credit card to another. Many times a credit card company will not allow you to move money to your bank account, but will allow you to transfer money from one credit card to another.
You should be able to do this from the credit card company website (if you have this access) or your bank’s personal banking website for customers.
There are numerous reasons your credit card company will not allow you to move money from your credit card to bank accounts, with the most prominent reason being that it may be used as part of a money laundering scheme or as a black-hat money stealing scheme. However, there are plenty of cards that offer no interest on balance transfers because they know people use such functions to save on interest and transfer debt.
Transferring money from one credit card to another may be free if you find the right credit card offer, but the problem is they are often one-time deals that expire after a few months. It is rare to see credit cards that offer transfer-fee free services for the lifetime of the credit card.
E-Transfers Via Different Financial Institutions
You will need the account number and the bank routing number. If you want to send money abroad, then you will need the SWIFT or IBAN number. You will need the name of the account holder as it appears on his or her bank statement or ATM card.
This service, if it is offered, can be done through your online banking interface. Keep in mind, your bank must support this sort of transfer.
Financial institutions and companies offer e-transfers with better rates or different perks. For example, some try to compete with the rates the banks give you. Others charge lower fees if your account sets up direct-debits or direct transfers that send money on a regular/routine basis. There are also companies that offer lower rates for sending money abroad.
Transferring money online via your bank may be cheaper overall in many cases, but there are numerous particular circumstances where you can get a better rate and a better deal by sending/transferring your money via an online institution or financial company.
Online Payment Processors
(easiest way to send money online, but not the cheapest or easiest to get that money out)
There’s a lot of companies that allow you to send money online. These companies allow you to hook up your checking account or a credit card to your account, then withdraw funds into your account with the company, then send money via that account to someone else, online.
The money transfer stays within the payment processor ecosystem (i.e. you are not transferring from one bank account to another, so you must withdraw the amount from the payment processor into your actual bank if you want to get the cash).
The big players are Google Wallet, Amazon, Paypal, and Skrill. We’ll talk Paypal and Skrill for now.
Send And Transfer Money With PayPal
With PayPal, you are able to send money in a variety of different currencies. You are also able to receive money in a variety of different currencies, and you can set up your account to receive the money as it is, or you may have the account convert it right away into your currency. There are charges for converting your money, and they are paid by PayPal skimming from the conversion rate. They offer you a poor conversion rate because part of the rate is kept by them.
They will charge you if you receive money in many circumstances, but if you are transferring it to another of your PayPal accounts or are sending it to your friends via their own PayPal account, then you can transfer money for free so long as you do it via the “Send to friends and family” function.
Transfers Money With Skrill
The rates with Skrill are sometimes better than PayPal, and they can often send and receive money from countries that PayPal will not deal with. Plus, they are less likely to freeze your account and keep your money if you happen to oppose Putin’s regime in Russia. PayPal has proven time and time again that it will keep your money and cancel your account if you do not support Putin and/or the Russian agenda. They do not mention it in their terms and conditions, and yet there are only a few times where they have lost in court with regards to keeping people’s money and cancelled/froze their accounts.
Skrill doesn’t play games such as this, but it is less popular than PayPal, which means if you want to transfer money to people you know, then you will have to have them sign up with Skrill and make an account. This can make the transfer process last a little longer than you may have hoped, but it may be worth it in some cases.
Money Transfers With Western Union or MoneyGram
(easiest way to send money abroad to another party who needs that money ASAP, but not the cheapest)
Western Union and MoneyGram allow you to send money to people in your own state and your own country, and they have a flat rate for transferring money, with may suit some people more than others. You can pay different fees for having the money sent faster or slower, which may also suit a lot of people and make their accounts more viable and cheaper than the alternatives. If you transfer the money with an agent (offline), then they will charge you more than if you do it online.
The location may have an effect on the fees you pay, especially if you are sending money abroad. A great many people turn to Western Union and MoneyGram to send money abroad, which is an indication they do a good job and offer good fee rates. They do not offer very good exchange rates, but that is true of many transfer companies (including the aforementioned PayPal). Western Union and MoneyGram have proven to be very reliable and convenient, plus they have not had any public cases brought against them in the same way that some other online transfer companies have.
Checks And E-Checks
E-Checks are simply viewed as another name for online funds transfers these days. Sometimes if a transfer is called an e-check, it means that the money will not clear for a few working days, unlike many online transfers that clear between anywhere from a few seconds to two hours.
It is possible to get money into your account using a paper check and without having to visit a branch or post it away. In this way, you are technically getting your money transferred online, but you do need to get or write the check and have it in your hand.
You can transfer money from other people’s accounts to your account by getting a paper check from them. There are banks, financial institutions and companies that allow you to photograph the check with a dedicated app. The details of the check are entered into the system and the money is passed over to your account within few minutes, a few hours or a few days.
There are some people that have accounts that allow them write a check to themselves from another of their accounts and use their check-cashing app to enter the check to their account.
Email Money Transfers
Some financial institutions such as larger Canadian banks are able to offer email money transfer services. It is a little like a blend of Skrill and PayPal with an electronic check system. The transaction is initiated via email, and the user has to overcome a few hurdles before the money is released. Such hurdles may include a username and password, and may include security questions that the user has to answer correctly to make the funds available. The funds are made available from one person to another, but the transaction uses emails instead of other notification and confirmation systems.
The service will often cost the recipient, the sender, or both, a fee. Sometimes the fee depends on the size of the transfer, and sometimes it is a flat rate for simply using the service. The biggest problem with this service is that it relies on emails, and many people receive phishing emails that may convince them they have money to release if they enter their details and passwords and such. A similar thing happened with the PayPal scam by PayPal, where the “i” on the end was capitalized so that it looked like it said PayPal. With email transfers, a scammer may create an email that looks just like the one you would receive when you have money to release, which may then trick people into giving away their details to scammers.
The Final Word
It’s hard to pick out the ‘cheapest’ way and give you a single solution because it depends on where you are sending the money from, where you are sending the money too, how fast you want the money to arrive, how secure you want the transfer to be, and if you are transferring from a bank account or another type of account.
For more specific recommendations that are more focused, look at our other sending money articles.
- Look at our Best Ways to Send Money to an Individual
- Best Ways to Send Money Online
- Best Ways to Send Money Abroad