Finance and money play an important role while on your Working Holiday in Australia. If you work in Australia, you should also open an Australian bank account. But what if you want to get your money from home over to Australia? Or what if some of your family/friends want to send you some cash? Especially at the end of your trip, you will get to the point where you want to tranfer your Australian Dollar without losing too much through fees and exchange rate! This topic has many hidden costs that you should be aware of. Let me tell you how I solve this problem on my trips!
Have fun with today's article! Transferring money from Australia at low cost?
- When are foreign bank transfers necessary?
- Why are traditional bank transfers not suitable?
- Transfer money online from and to Australia
- Travel Hack: Use a free credit card
- Transfer Money from Australia with TransferWise!
- What alternative money transfers service are available?
When are foreign bank transfers necessary?
- The most common reason is at the end of your Working Holiday time in Australia. You want to close your Australian bank account and transfer your Australian money back home.
- While you are in Australia, you may want to send money to yourself or some of your family/friends want to sned you money.
- When getting back your australien tax, but you already left Australia or closed your bank account.
- During your trip you may want to send money to another traveller who has his account not in the same Country like you.
- If you work online as a freelancer or digital nomad and your business partners / clients are scattered around the world.
- If you lose bank cards and cash, you can have cash sent or transferred to Australia.
Why are traditional bank transfers not suitable?
Traditional bank transfers usualy work the best inside of your country. For example, if you live in Europe than transfers within the whole EU and in Euro is completely free and also fast. But this is completly different when it comes to international bank transfers.
So this applies to the typical Working Holiday destinations like Canada, New Zealand and Australia.
For international transfers you pay very high fees + the exchange rate is usually much worse than when you use one of the money transfer services (e.g. TransferWise).
In addition, bank transfers take longer and the exchange rate is not accurately quoted in advance for international transfers. This is because traditional banks always wait until the end of the day to determine the exchange rate. This means, you don't even see beforehand how much money you will lose/pay.
It's different if you use a money transfer services. The exact exchange rate will be shown before the actual transfer. So you will know exactly how much you pay/lose.
Important: Watch out for hidden fees!
For international bank transfers you have to pay attention to two large cost factors:
1. The fees or transaction costs that are charged by almost all banks and financial service providers for international money transfers.
2. The currency exchange rate! Most of the time, the service providers actually earn a lot more from the exchange rate than from the transaction fee. In general, the more exotic the currency, the more expensive the transfer. Unfortunately many banks do not show the exchange rate. Check it with your bank before you transfer.
Transfer money online from and to Australia
So what is the cheapest way to send your money from Australia? The first time I asked myself this question was 2017 when I finished my first Working Holiday in Canada. I saved more than $20,000 CAD and I quickly realized that I could lose up to 1,000 CAD due to the different exchange rates from banks.
I compared the providers and quickly came to the conclusion that I save the most money by using one of the online money transfer services.
When it comes to money transfer, its good to check the current exchange rate. This is the only way you will get a feeling of how much money you are losing on your transfer.
Tip: Try to avoid international bank transfers. Because you will always lose money. But you lose the most, if you use traditional bank transfers!
To save the most money, I have two options for you, how to Transfer Money.
Travel Hack: Use a free credit card
During my Working Holiday in Australia I never sent money to myself! From the very beginning, I took my money out for free from ATM's. How?
Since you anyway should get a travel credit card for your time abroad, why not get one that is perfectly tailored to the needs of backpackers?
Attention: Your normal bank debit card does not work in Australia! In addition, you will get horrendous fees for withdrawing and paying abroad with the credit cards of the “usual” banks.
When I look for a travel credit card, this is important to me:
- No international service fee! If you pay using your credit card in another currency, you don't want to pay any fees (the most banks charge 1 – 2% per transaction as a fee)
- No withdrawal fees when withdrawing cash worldwide! A good travel credit card does not include any fees for Withdrawal withdrawing money worldwide.
- No annual fee for your credit card and account! Many credit cards have an annual fee or hidden costs. When travelling to Australia you don’t want any fees.
- 24/7 Good customer service! In case of problems, money fraud or credit card loss. Very important for your time in Australia.
,,For 2020 we recommend Travel Credit Card from Revolut.
No Annual Fee, withdrawling cash abroad is free"
Find out more in the article:
Best Travel Credit Card for Working Holiday!
Transfer Money from Australia with TransferWise!
The best way to send your money worldwide is with an online-only service like TransferWise*. This is not only much cheaper than traditional banks, but also much faster! With TransferWise, the recipient receives the money directly into their bank account.
a) How does TransferWise work?
Not only is your money sent faster and cheaper, but there are no hidden costs. Because the exchange rate is shown to you right before you send it. Maybe you are wondering how this is even possible?
Simple, TransferWise* has bank accounts in the appropriate countries in each currency, which they offer. So, when you send money from your home Country to Australia, you transfer your money to bank account in your home country. TransferWise then transfers the money directly from their account. This way you receive your money immediately and TransferWise can decide themselfe when they use differen exchange rate to multiply their money.
To use TransferWise you need a sender and a receiver bank account. As an alternative to the receiver account you can also just use an e-mail address. TransferWise will then send the receiver an e-mail with instructions on how to enter bank details. More information about the e-mail procedure hier.
b) What is the fee with TransferWise?
TransferWise currently charges a fee of 0.5%, which is displayed to you before the transfer is made. This fee is approximately 50% less than if you would use a regular credit card with fees. The fees of traditional banks are usually even higher!
c) TransferWise convinces through simplicity!
I already tried several different providers (including PayPal). But the easiest and fastes way to transfer money is via TransferWise. Uncomplicated and simple – What more could you want?
I mention PayPal, because without a canadian residential proof I was not able to send my remaining money of about 2.500 CAD from Canada to Germany. Why is this a problem? Because I have not lived in Canada since 2017 and therefore I do not have a residential proof. PayPal is not interested. So I could not use their service at all. -> This will not happen to you with TransferWise.
d) TransferWise also offers a exchange rate alert
You don't like the current exchange rate? No problem. TransferWise also offers a exchange rate alert* and will inform you when the exchange rate reaches your desired level.
Register for free with TransferWise* and set the exchange rate alart, so you can transfer money directly when your desired exchange rate is reached.
What alternative money transfers service are available?
In general you should avoid international money transfers, because you will always lose money. But you will lose most money if you use the traditional banks and credit cards with fees. Therefore, make sure you travel with a free travel credit card like the credit card from Revolut* with which you can withdraw cash from ATM's worldwide free of charge. In addition to the credit card, you can also use the TransferWise* online service. This is not only the cheapest, but also quick and easy and has no hidden costs if you want to transfer money from Australia.
What should you do next?
Did you know that you can also participate a second and third time in Australia? Read on here: “The second & third Working Holiday Visa for Australia“
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Ciao Daniel 🙂
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