Select Page

Stuff You Should Know About Wiring $10,000 Overseas

Stuff You Should Know About Wiring $10,000 Overseas

When sending and receiving money abroad in amounts of $10,000 or more, you will need to be up to date with the international rules sending/receiving large sums through digital transfers. If you are transporting cash in the amounts of $10,000, then you will simply need to declare it at customs when you leave; beware that you may need to prove that you earned/own the money legally and legitimately, plus you may need to explain why you are taking such a large sum of cash out of the country. Wiring $10,000 overseas requires more paperwork and more checking than with smaller amounts.

Wiring $10,000 Overseas

There is less to worry about if you are sending small amounts because international and national laws are typically less strict when dealing with small amounts. Obviously, as common sense would suggest, you cannot get around the $10,000 (or more) regulations by sending multiple smaller transfers.

There is no real reason why you cannot send a high-value international transfer, but rules and laws exist to prevent problems, reduce tax avoidance, and crime. All transfers that are highlighted as high value are always checked by the IRS, who are informed in most cases by the issuing transfer bank or customs.

Why The Number $10,000? Where Did That Amount Come From?

The amount $10,000 came from the United States, but is now a standard benchmark around many parts of the world. Under the Bank Secrecy act, government bodies such as the IRS, must report all cash transaction that are over the value of $10,000, and wire transactions that are over $3,000. As a side note, just because a transaction is reported at/over the amount of $3000, it doesn’t always mean extra checks or paperwork.

As you can imagine, if the bank(s) suspect any suspicious activity they will report the customer to the IRS. For example, they may consider it suspicious if the customer tries to split the payments so he/she won’t hit the $10,000 mark. The banks will also keep an eye out for people who are trying to avoid paying taxes, people who are funding terrorism, who are money laundering, or who are committing financial crime.

What Fees Exist For Larger Transfer Amounts?

The method you use to transfer your money will dictate the fees you pay. Fees are simply the amounts you pay for the transactions themselves, and different companies/organizations/banks have their own fees/rates. There are also higher and lower rates depending upon which country you send your money to, and how quickly you send your money. Finally, do not forget that fees have nothing to do with exchange rates. Fees and exchange rates are separate, which means you may come across companies that have no fees, but offer a terrible exchange rate, and visa-versa.

For international transfers, you have the option of:

The Three Fees You Pay (Usually Without Realizing It)

Remember that when you are sending/receiving international transfers, you need to know what you are being charged. There are three ways that transfer companies charge you for your transaction. Whenever a company says that it doesn’t charge a transaction fee or any fee, it just mean they are taking their profit from your Swift fee or from your exchange rate. There are only two companies that explicitly tell you where they are making their money, and they are Transferwise and CurrencyFair.

Fee 1: Poor Exchange Rates

If you are instigating an international transfer, you will need to check your exchange rates, (and the upfront fees and SWIFT fee) that may be applied to your international transfer. Having a poor exchange rate will mean you end up with less money after the transfer.

If you want to know if you are getting a fair exchange rate, then you should check the mid-market rate. A mid-market rate is the real exchange rate; it is the average amount that people are paying for a currency right now. The mid-market rate is the one you find online on Google, Bing, and with currency converters such as Transferwise and CurrencyFair.

A mid market rate is the best rate, but most currency converters, including banks, do not use the mid-market exchange rate for international transfers. Instead, all currency converters (except Transferwise and CurrencyFair) add an average of 3% to 6%, so they can make a bigger profit when you make a transaction. It is easy to miss this sort of thing when you are exchange-company hunting, but missing the exchange rate may cost you more in the long run. For example, a common trick is for a converter to say, “Hey, we don’t charge a transaction fee, and there are no upfront fees.” Sound’s good right? But, they have a terrible exchange rate so that what you save on fees is lost on the actual exchange.

The Bank Of America Example

For example, if you contact the Bank of America, they will be able to tell you how much they gain from the exchange rate; they call it a rate return. Sadly, their rate is not listed when you look at their charges. Many currency converters will state a fee and then tack on a profit onto your exchange rate too without being upfront about it.

With the Bank Of America, the fact they do not give a mid-market rate is buried in the 4th footnote on their international transfer fact sheet. Here is what it says on their fees sheet, and I have highlighted in bold the bit where they tell you they are charging whatever exchange rate they desire:

Excerpt From The Bank Of America International Transfer Fact Sheet
The exchange rate that Bank of America offers or assigns to your transaction will be determined by the Bank of America at our sole discretion based upon such factors as we determine relevant, including without limitation, market conditions, exchange rates charged by other parties, our desired rate of return, market risk, credit risk and other market, economic and business factors…. We provide all-in pricing for exchange rates. The price provided may include profit, fees, costs, charges or other markups as determined by us in our sole discretion.”

I am not pulling down Bank Of America for making whatever profit they wish. I am pulling them down for not being transparent. They could easily come out and say they do not provide a mid-market rate and that they create their own exchange rate. For example, Western Union and MoneyGram are not cheap currency converters, but at least their kiosks and stores have their exchange rates written on their walls or boards. Even their small print, shown above, it not transparent. They could have easily said, “We tag on 3% to the mid-market rate” or something along those lines, but instead they say their rate is based on “Our desired rate of return.

Exchange Rates Are Easy To Hide

Banks will generally tell you that the mid-market rate, like the one you find on Google, isn’t available to regular customers, but Transferwise and CurrencyFair are able to charge mid-market rates, and they make all of their frees clear and easy-to-understand. Services like Transferwise offer a real exchange rate to customers and make sure their fees are all set out upfront, rather than being hidden in the small print.

Fee 2: SWIFT Fees

Any Swift fees will be added from the start by your bank. Transfer companies may add fees such as these at the very end when you have already started to create your transfer. Most banks use the Swift network when they are sending international transfers. The global intermediary banks will then work together to transfer your $10,000 overseas.

Most banks will normally take their own fees from the transfer, and such fees will depend on which bank the customer is with. Each bank may charge between $15 to $45 for a transfer, but prices can climb much higher for transfers of $10,000 or more.

In most cases, the main bank you use won’t hold all the information you need, so they will not be able to tell you all the charges you will have to pay until you have started your transfer. Don’t be surprised if the Swift fees are buried deep, as this is normally how the banks catch you out so you will have to pay into the correspondent or intermediary banks. This is because they don’t expect people to read the small print, so you are left paying the extra charges.

When making a large transfer using your bank, it is always best to ask about the SWIFT fees before you confirm anything. If you are still not happy about the hidden costs then, I suggest you don’t use your normal bank and instead you can use an international transfer service like the ones listed earlier.

Fee 3: Upfront Charges

Upfront charges change, such as with PayPal and how it offers free transfers that are low for sending money domestically though private PayPal. The international fees for PayPal transfers don’t give you much option, especially when you are dealing with businesses whereupon the fees get even higher.

Many other banks will have much higher international transfer fees that will be fixed whether you transfer a small amount of money or a large amount. Most people use TransferWise to send money because Transferwise are very transparent about fees, and will tell you upfront about charges or better exchange rates to look out for.

Is There A Best Way To Send Money Overseas?

Whichever money-transfer company or bank you go with, you have to remember to do your research as the banks are thinking about their profits and not what is best for you. They are hoping you will take the most expensive deal. In most situations people use their own banks to transfer money overseas because it is easier than signing up with a currency converter money transfer company, but people are losing money because of this. If you could save hundreds on your international transfers, then why not pick the transfer company with the best exchange rate. Think of it another way, would you consider signing up with a transfer company if somebody paid you $250? That is the amount you may lose if you wire $10,000 overseas with your bank rather than a transfer company.

If you are going to go with your bank, then the first thing you will need to do is check your bank’s international upfront fees for the wire transfer, and then calculate the exchange rates that your bank offers. You can do this by going online and comparing charges using Google.

The second thing to do is to check any SWIFT charges. Secondly, check to see if your bank wants you to go into your bank branch, and if you can make wire $10,000 overseas using their online services.

You will find it easier to use Transferwise because it gives you a transparent fee structure, and you also get to compare the rates you see to the ones that are on Google; your Transferwise rate will be the same or better than what you see on Google.

All transfers pushed through local markets, which will stop the addition of any fees that international banks try to charge you with. You get TransferWise online convenience, bank-level security, no hidden fees, and fast international transfers. TransferWise even offers a borderless multi-currency account where you can manage, spend, receive and send money at any time of the day or night. In addition, you can swap between dozens of currencies for a tiny price, and you are able to receive/send local bank transfers from across the world.

About The Author

Ash The Great

After a varied career in different industries from the hospitality industry to the financial consultancy industry, Ash now spends his days working as a professional writer.

Leave a reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Popular Posts