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What’s The Best Time To Send Money Home?

October 3rd, 2019

The Best Time To Send Money Home

With countries growing closer in terms of connectivity, the opportunity to move abroad for work or to settle is becoming quite common. Those who shift base to developed nations in search of a better life look for ways to make every penny earned count.

The money expats send back home play a very important role in uplifting their communities. Their remittances help lift people out of poverty, create new businesses, and spur national development.

Sometimes, money sent back to the home country could be influenced by the host country’s exchange rate. A government-managed economic measure, exchange rate fluctuations can reflect a loss of earning when expats send money home.

At Xpress Money, we recognise the commitment these global expatriates show in helping families and friends back home while also building a new life in their country of residence. Indeed, remittances are an important part of an expat’s life.

Looking for a quick guide to make your transactions swift and easy? Here are our top four tips to save time and remittance fees when sending money home:

1. Aim for the middle of the month

Today, the funds that expats send back home help to financially support one in every nine people. However, many a times expats make hasty decisions without considering exchange rate fluctuations. The urgency of their choice may sometimes not give them the best value on their remittances while sending money back home.

Planning your transactions can save both time and money. Most people send money home the minute they are paid. Our records show that 75% of all transactions occur during the last five days of a month and the first ten of the next. This spike in traffic means that branches and outlets are busier. If you can schedule your commitments differently – and if there’s no need to send money in an emergency – it might be worth aiming for the middle of the month to remit, when queues and waiting times are shorter.

2. Weekends are actually a good time

In 2018, over 200 million expats remitted $689 billion to their homes, of which almost $529 billion was sent back to developing countries. By helping families living in the world’s most rural and impoverished areas, expats provide up to 60% of their family’s household income.

So, when it comes to saving on remittance fees, using an expert money transfer provider like Xpress Money can help expats make more informed money transfers Customers may believe that remittance outlets are crowded during the weekends, and quieter during the working week. But the opposite is true – our data shows that customers request transfers through the working week, and the weekend could get relatively quieter. With most exchange houses boasting of a large network of outlets, customers might want to visit a convenient location over the weekend to get their transactions processed quickly.

3. The exchange rate makes a difference

It’s worth clarifying that remittance organisations have absolutely no control over exchange rate movements. Nor does the rate fluctuate based on how busy an outlet is. Exchange rate fluctuations are based on international market movements. For smaller, regular transactions, the fluctuating decimal point may not make much of a difference to the value a consumer gets. Many expats remit money based on a schedule of financial commitments and the needs of their family, so waiting for the exchange rate to drop in your favour may not always be effective.

However, there is an exception to this rule. White-collar expats in high-powered jobs, or people who run their own businesses, often have surplus liquidity they want to send home. In this case, it might be best to save money and send it home as a lump sum when the exchange rate drops in your favour. For example, the recent fluctuation of the Indian rupee saw many customers take advantage of the weakened rupee to send their savings home.

Global economic factors play a crucial role in impacting exchange rates between countries. At times like these, check for transfer options available with providers when sending money home. Business owners can set up a recurring payment structure on a weekly or monthly basis to ensure that both time and money are saved.

Also Read: Factors Influencing Exchange Rates

4. Fees matter more than you think

Most exchange houses charge a flat fee on remittances. According to the World Bank’s Remittance Price Worldwide database, the average global cost of sending $200 was at a high of 6.84% (2019, Q2). Though the UN’s Sustainable Development Goals expect remittance fee to reduce to 3% by 2030, when the math is done, sending money back home is an expensive proposition for expats at the moment. Nonetheless there are better deals at hand as many money transfer brands charge very competitive rates. For regular remitters, finding the right flat fee makes more of a difference to value than minor fluctuations in the exchange rate.

Consider this hypothetical situation: Karl works in the UK as a local businessman. He wants to send GBP 5000 to the Philippines. Since he’s in no hurry, he decides to wait and keep an eye on the exchange rate. He makes a transfer in July when the rate was GBP 1= PHP 61.76. In March the rate was GBP 1= PHP 70.66, while in May it was GBP 1= PHP66.37. If Karl had looked out for a professional money transfer brand like Xpress Money and studied the market he could gain good value on his money transfer.

Urgent situations may be unavoidable, but the best time to send money home is to transfer when the value of the host country’s currency is at its highest. Therefore, it is worth shopping around for brands with the lowest transfer fees and the best exchange rates. This way, you can get the most attractive deal for your money transfer.