Sending money home: how to compare the real cost
In short: the cost of sending money abroad is the transfer fee plus the exchange-rate markup, so look at how much will arrive, not just the fee. In the US, most providers must show you the exchange rate, fees and amount to be received before you pay, and you usually have 30 minutes to cancel.
The two costs in every transfer
- The fee: a fixed amount, a percentage, or both.
- The exchange-rate markup: the difference between the rate you get and the mid-market rate (the rate banks use between themselves, shown on most currency websites). A provider with no fee can still cost more if its rate is worse.
The fairest comparison is the amount the person at home receives for the same amount sent. Our remittance cost comparer works this out for two options side by side.
Your rights when you send from the US
Under the Consumer Financial Protection Bureau's remittance rule, most banks, credit unions and money transfer companies must:
- Give you a disclosure before you pay showing the exchange rate, fees and taxes, and the amount that will be received.
- Give you a receipt with that information and the date the money will be available.
- Let you cancel within 30 minutes of paying for a full refund, as long as the money hasn't been picked up or deposited.
- Investigate if you report an error within 180 days of the promised delivery date.
Send safely
- Use a licensed provider: a bank, credit union or registered money transfer company. Informal channels, such as hundi or hawala, can be illegal and leave you with no protection if money goes missing.
- Double-check the recipient's name, account number and bank details before you confirm.
- Never send money to someone you haven't met in person who asks for it online or by phone, or to anyone who says you must pay to receive a prize, job or loan. These are common scams.
Sending to Bangladesh or India
- Bangladesh: Bangladesh Bank has offered a cash incentive on remittances received through formal banking channels. The rate and rules can change, so ask the receiving bank what applies today.
- India: money can be received into a bank account in India, including an NRE or NRO account if the recipient is a non-resident Indian. Ask the bank which account suits the purpose.
- For both, compare a few providers on the same day: rates move, and offers for first transfers often end after the first one.
Handy tools
- Remittance cost comparer: see how much arrives and the real cost, markup included.
General information, not financial advice. Rules, fees and rates change and depend on your situation. Check with your bank, the provider or a qualified professional before you decide.
Sources
- CFPB: Sending money abroad (remittance transfers)
- eCFR: Regulation E, subpart B: remittance transfers
- FTC: Sending money abroad
- World Bank: Remittance Prices Worldwide
- Bangladesh Bank: Official website (remittance circulars)
- Reserve Bank of India: Official website (NRI accounts)