Is a telegraphic transfer the best way to transfer money?

When to use (and avoid) telegraphic transfers

Telegraphic transfers (TT's) are convenient for Australians sending larger amounts of $10,000 or more overseas. Banks charge a fixed fee so if you send larger amounts, it won't take up as much of the total amount. Small to medium-sized business often use TT's through their bank to make their transfers for international payments. This is often because banks offer companies additional financial products that can make it worthwhile.

However, if you're going to use your bank to make your TT, make sure you understand exactly what all the fees and exchange rates will be for your transfer. There’s not really a “best” bank for international telegraphic transfers, because of the markup that's usually added to the exchange rates. You could be better off using a money transfer specialist.

Best way to transfer money overseas is with a money transfer specialist

Sending money internationally with a money transfer provider is often cheaper and quicker way to do it. It's also as easy (and sometimes even easier) than going through your bank. If you’re sending smaller amounts, you could try Wise. If you’re sending larger amounts, then OFX could be a great choice.

Here is a summary of details required for Australia's major banks:

Bank Name	SWIFT / BIC Code	Branch Address Locator
Commonwealth Bank of Australia	CTBAAU2S	CBA Branch
Westpac Bank	WPACAU2S	Westpac Branch
ANZ Bank New Zealand Limited	ANZBNZ22	ANZ Branch
National Australia Bank	NATAAU3303M	NAB Branch

Plus remember, the transfer will take a few days to get to you and you may need to pay an incoming telegraphic transfer fee.

Altogether, there are 4 fees you can be charged for telegraphic transfers including:

Your bank transfer fees - you can decide whether to pay for the whole transfer cost (including 'correspondent fees' and 'receiving bank fees')
Intermediary bank fees - middleman or corresponding bank fees for transferring money usually via the SWIFT network
Exchange rate margin - banks add a margin to the exchange rate to cover their own fees or make profit
Receiving bank fees - foreign banks may charge you a processing fee, which is deducted from the amount of money sent

We said earlier that making a telegraphic transfer through your bank can be expensive. Australian bank fees also vary depending on:

Where you pay: Online banking is cheapest $5-15; branch and phone is most expensive $20-30
Currency exchange: Converting Australian dollars to a foreign currency. Without conversions the fee is typically $10-25

Combine the telegraphic transfer fees with the exchange rate margin, and you could be overpaying for your transfer by over 5% even before it leaves Australia. So on a $1,000 transfer, you can pay over $50 in telegraphic transfer and exchange rate costs. That's not even taking into account other fees like:

Correspondent bank fee $10-20
Receiving bank fee $20-30

Make sure you get your transfer details correct and you're ready to go ahead with your transfer. For cancellations, amendments/refunds or investigations into your telegraphic transfer, banks can also charge $20-30 per request - ouch!

Most banks provide a currency calculator which show exchange rates for telegraphic transfers on their websites. However, banks tend to quote the market rate, not the actual rate you'll get for your international transfer.

This makes it tricky to compare the exchange rates and total costs that banks offer against other international money transfer options like specialist money transfer providers. Our comparison table accurately does this for you.

Our table shows Australian banks quote exchange rates that are typically 2-3% worse than the base exchange rate.

Compare the best deals to transfer money overseas

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Banks in Australia are safe and legitimate. They have an Australian Financial Services License (AFSL) and are regulated by the Australian Securities and Investment Commission (ASIC). Banks have to follow very stringent guidelines to send your money overseas.

In terms of online security, banks protect your personal data from fraud and theft. They encrypt your data and create secure connections with your website browser when you're providing your personal details.

While telegraphic transfers through your bank are safe, it doesn't mean it's completely free from scammers. The problem is once your money is transferred, you have almost no way of getting it back and it can take a long time. Many complaints about telegraphic transfers come from victims of fraud.

Australian banks only have limited responsibility for a transfer once funds have left the country. This can be a problem, because you don't know what's happened to your money until the very end of the process. I.e. when your funds haven't arrived into the overseas account.