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Transferring Money: Study Abroad Students/ Gap Year Travellers

If you’re going to study abroad or take a Gap Year then you should look at the possible ways of transferring money as you don’t want to be leaving the country with a bundle of cash in your backpack. You should also put a contingency plan in place in case you get caught short while you are away so you may wish to discuss this with your parents.

The first thing to consider is:
Will you have or do you already have a bank account abroad?
If so then you can look into options and costs involved in relation to transferring money to this account. It is always a good idea to do the research before you travel even if you do not plan to transfer money from your UK bank account. You never know what the future holds so having a contingency plan in place is a wise move, otherwise you could incur higher charges than if you had taken a few minutes to plan. It might just be having a system in place where that kind parent can top up your account directly if you run out of money.
By doing the research before you go away you will be able to minimise the costs that you may incur from bank charges for wiring the money. When doing the comparison you should consider the following:
  1. How can I send money aboard? / Or get sent money whilst I’m abroad?
  2. How much will it cost to transfer the money?
  3. Don’t have a bank account abroad - what other options are there?
How can I send money abroad? / Or get sent money whilst I’m abroad?
There are various options such as:
Banks: — A number of banks allow you to transfer money to linked banks overseas without a fee. You should do some research into banks that have an operation in the UK and one in the Country where you’re going to be staying /travelling to. HSBC is one of a few banks that offer free worldwide transfers between HSBC accounts. Another alternative is Citibank who can also offer fee free transfer between accounts subject to terms and conditions click here for more info.
You should look at the method of transfer that you use as there may be charges for telephone or in branch transfers that might be free via online banking.
Other transfer options:
Online money transfer companies such as Transferwise – Relatively new to the transfer market and allows you to trade over 20 different currencies. Fees start at an incredibly low £1 on transfers up to £200 and then 0.5% after.
This is a method I have personally used. The money does take a few days to transfer but with a good exchange rate and low fees it is definitely worth the wait. Click here for more info
Western Union: — If you need to send money instantly then Western Union is a good option.
You will need to make sure that there is an agent or branch near which you can then go to to pick up the cash. You will be able to transfer money via a branch or online, or you can also transfer straight into a bank account. Please note that this method can be expensive.
How much will it cost to transfer the money?
This is usually broken down into 2 key areas –
  1. Fees – These can be charged to both the sender and recipient.
  2. Exchange rate – Please note that “Commission Free” might also mean a lower exchange rate as company’s offset the fee against the rate they offer.
You should always judge the cost based on the combined cost of Fee + Exchange rate.
You can do this by simply saying to each provided after fees and exchange rate how much money do I get in the relevant currency?
IE: How many Euros will I get for £xxx?
Don’t have a bank account abroad — what other options are there?
There are various Credit Cards on the market that don’t charge fees when using them abroad. Places that offer these types of Credit Cards tend to change so you should do some research into this.

At the time of writing this article the Halifax –Clarity card and the Post Office Platinum card offer no fees on overseas purchases.

In addition you could also set up an automatic direct debit to pay the bill in full each month so you don’t incur interest charges or any late payment fees. Alternatively you could get your parents to settle the bill each month or do this via online banking.

If you’re coming to the UK from abroad then you should look into transferring money from your account in your home country to your UK one using the same principles above.

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