Read on, because this is exactly what I set out to answer in this guide.
I’ll scrutinise six of the most popular transaction banks in the UK: Barclays, HSBC (as well as HSBC Expat), Lloyds, Nationwide, NatWest and Santander.
Taking a look at their transfer speeds, transfer limits, transfer fees and exchange rates.
In my view, these are the most important factors to consider (alongside safety and indeed all of the banks are very safe).
I’ll then evaluate how these banks stack up against each other across this criteria.
Plus, I’ll demonstrate how banks compare to alternative options for making overseas transfers, such as money transfer apps and currency brokers.
Quick-look: An overview of UK's top banks
The UK’s biggest banks are so vast you have to wonder where you lie in their priorities. In my view, none of the UK's banks are a good option for international transfers.
I mean for me, HSBC Expat is the best of the bunch, because it offers a multi-currency account, card, investing, easy account opening, high interest savings... but there are far cheaper options for international transfers.
Top bank alternatives for international transfers
With alternative payments providers (international money transfer services) you are likely pay less than half the price of what you would pay with a bank for an international transfer.
Actually, you will not just get better fees, better exchange rates, etc., you will be receiving a much more accommodating service than you would get with any bank.
How much do British banks charge for international transfers?
There are two main types of fees when sending money internationally through your bank:
- Transfer fees
- FX markup
With this in mind, we can get a better idea of exactly how much UK banks charge.
UK bank transfer fees
The transfer fee should be easily apparent when you go to set up an international payment through your bank's online banking.
It’s a fixed fee that applies anytime you make an international payment but can vary depending on how you make your transfer, how you fund your transfer and where your money is going to.
They’re not the most important fee to look out for, but they're unnecessary, and I can list you dozens of non-bank providers that don’t charge them.
Here are the international transfer fees charged by UK banks:
In response to the fee-free pricing of alternative providers, a growing number of banks around the world are offering zero fees, should you make your transfer online.
UK banks are not.
In fact, Barclays is the only one to offer this carrot.
But, make your payment in-branch or over the phone and you’ll be charged a joint-highest £25.
With the rest, you’ll incur a fee which ranges from £5 - £25, regardless, with Santander holding the unfortunate crown of charging most.
The better news is that transfers with any bank over the SEPA network, to euro-adopting countries, are fee-free.
This is not so much out of the kindness of their hearts, but EU legislation that UK banks have stuck with after Brexit.
So, if I had to pick one, Barclays is the best choice, based solely on fees.
However, keep in mind currency brokers charge no transfer fees, regardless of where you’re sending money to.
Money transfer apps usually apply fees between £1 - £5, depending on how you make your payment.
FX markup
This is where sending money internationally really becomes a minefield.
Charges are concealed within the exchange rate, making it challenging to compare options effectively.
Thus, the process often leads to confusion.
I’ll do my best to unpick it here.
Whenever you send money abroad through a bank transfer, they'll tack on a fee as a percentage of the amount you're transferring.
It’s wrapped up in the rate they offer you and you won’t know how much it is unless you calculate it yourself.
Basically, it's an extra 'markup' or 'margin' added to the mid-market exchange rate (that’s the rate banks trade at with each other and the rate you see on things like google).
The bigger that margin, the more cash the bank pockets.
High-street banks are infamous for slapping on hefty exchange rate margins.
Let’s see if they live up to the reputation:
It certainly looks like it.
In terms of exchange rate margins Nationwide is the best bank to send money abroad.
But, you’re still overpaying.
Nationwide applied the most respectable margin, 2.18%, while NatWest applied the worst, 4.25%.
They’re eye-wateringly large margins when you compare them to leading alternatives.
Non-bank service offer lower markups
There are cheaper and more efficient ways to send money abroad from the UK than with a bank.
With a currency broker, you’re looking at anywhere between 0.15% - 2%.
With a money transfer app, it’s usually in the range of 0.4% - 1.5%.
This could be the difference of £20 - £40 on a £1,000 transfer but the same applies on even larger transfers.
On a £100,000 transfer? You could make savings of £2,000 - £4,000!
Transfer speed
You might have some uncertainty on the quickest and most effective way to get your money from point A to point B.
According to the banks themselves, an international transfer can take anywhere from 1-4 business days (sometimes even longer).
Doesn’t exactly provide a specific timeframe does it?
I’ll break it down a little.
If you’re sending money to Europe, funds should reach the destination account on the same or next working day.
It depends on whether you send a standard or urgent SEPA transfer and if you meet the cut-off times (usually 2pm offline and 3pm online).
Popular currencies, like USD, should likewise reach their destination on the same, or no later than the next working day.
Transferring money with a bank to a more remote country and you’re generally looking at a little longer.
Let’s take a look at what each of our six banks advertise.
As you can see, the banks are all very vague when it comes to payment times.
NatWest provides no information at all.
Barclays is the only bank to actually provide a country-by-country guide with specific details, letting you know the cut-off time and the date your money should arrive.
Even to remote destinations, it’s usually by the end of the next day.
However, Barclays does say some transfers can take anywhere up to 8 days.
This level of detail is what I like to see. A bank that can at least be held to account to a specific transfer time.
In fairness, for SWIFT transfers, banks have little say as to how long a transfer will take once they’ve processed it on their end.
You’re relying on intermediary and beneficiary banks to do their job on time.
For faster transfers, I’d recommend working with a currency broker or money transfer app.
I’lll explain later why this may be faster.
Transfer limitations
You should be able to send any value with a bank via their branch or even over the telephone (just bear in mind they’ll levy you with extra payment fees for doing so).
Online, however, is a different matter.
Online limits are largely implemented for security purposes but they can be frustrating nonetheless.
The major UK banks set limits as follows:
In terms of flexibility, it’s a definite win for Nationwide here.
If you’re making a large transfer, there’s no need to break it down into smaller ones and achieve a worse exchange rate.
Neither would you have to call their customer support and be levied with a £20 or so payment fee.
NatWest is certainly the most restrictive in this sense. Allowing for overseas transfers of just £10,000 a day.
Depending on how you view safety, you might see it differently, but as long as the required two-factor authentication is in place, I can’t see why you’d go for a limit as low as that.
Now, it’s not just banks that have online transfer limits.
Currency brokers and money transfer apps often have them for security purposes too, they’re just a lot higher.
Here’s the other thing.
When you do need to make a transfer over the phone, they don’t charge you more for the privilege.
Money transfer app Wise lets you transfer up to 5 million in GBP in one online transfer.
Currencies Direct applies a £25,000 online transfer limit per transaction, but you can trade with no maximum limits over the telephone, with no extra charges.
Best bank in the UK for international transfes
Taking all major factors into consideration - transfer limits, transfer speed, and fees & exchange rates - I’d say Barclays is the best bank to send money abroad.
They commit to the fastest transfer times and provide users with the most currency-related information.
They’re also the only bank not to charge transfer fees for online transfers and they applied the second lowest FX margin on our £1,000 GBPEUR test transfer.
Admittedly, their £50,000 online transfer limit is annoying, but there’s not one bank that comes out on top across all variables.
Nationwide also deserves a mention for having no overseas transfer limit and applying the lowest exchange rate margin on our test transfer.
Should I always transfer money overseas with my bank?
Being short, no.
If you're in search of the flat out best way to send money abroad, the reality is that banks are not the ideal choice.
The thing is, a currency broker or money transfer app can beat UK banks across all of the major money transfer metrics.
It’s why currency brokers and money transfer apps have been able to gain such popularity in the first place.
They identified the key pain points that users were experiencing, and solved them.
Sounds simple, and it is.
It's not that banks aren’t aware of them - they offer a top notch service to their mega corporate clients.
But for individuals and SMEs, banks simply aren’t willing to match the competition.
We’re just ‘small fish’ to them unfortunately.
So let’s take a look who you could use instead.
Alternatives to UK banks
As I’ve mentioned, there are broadly two types of money transfer specialists that can help you send money overseas.
Currency brokers
When it comes to sending money abroad, currency brokers offer the best all-round experience.
As currency specialists, their entire focus is on making sure your money reaches its destination smoothly.
Firstly, they don't charge any transfer fees, so there’s nothing to worry about there.
Then there’s transfer speed.
Some brokers have local settlement accounts around the globe that let you bypass the pesty SWIFT network, avoiding both intermediary bank delays and fees.
In terms of online transfer limits, some brokers have them and some don’t, but you’ll always be able to trade as much as you like over the phone, without being charged an extra fee.
This takes us to a whole other matter I haven’t explained yet: service.
To book currency transfers, you'll have a dedicated account manager who will guide you through each step of your international transfers to ensure you're comfortable.
This expert can even help you take advantage of favourable currency swings by timing your trades wisely, and discussing useful products which can protect you against downside movements or possibly achieve a better rate.
They’re yours to call on whenever you need them.
A phone line direct to your own FX expert.
With a bank, you get access to a generic helpdesk with no specific knowledge in overseas transfers.
Most importantly, currency brokers offer exchange rates that beat banks.
By choosing a leading provider like Currencies Direct or Key Currency, you could save 2-4% compared to using a bank.
As you've already seen, this could mean saving thousands of pounds.
Currency brokers are especially apt for larger transfers.
Transferring over £20,000? Use a currency broker.
Money transfer app
If you're sending a small amount of money overseas, compare your bank with a money transfer app before you do anything.
Money transfer apps tend to apply no, or very low transfer fees. Rather than £20, I’m talking £2 or so.
They charge fees because most customers tend to use them for smaller transfers and they charge comparatively low fx margins.
Take a look at money transfer app Wise as an example.
Wise actually provides transfers at the mid-market rate, but then adds a ‘variable fee’ which ranges from 0.4% to 1%, depending on how much you send and the currencies involved.
They also employ similar tactics to currency brokers with regards to speeding up transfers. And given the popularity of apps like Wise, it’s worth bearing in mind that transfers between two users on the same platform are instant.
Money transfer apps are super slick and user-friendly and are designed for the specific purpose of transferring or receiving money from abroad.
Registering through the app is fast and everything around conducting an international transfer is made simple. Whether that’s setting up rate alerts, managing recipients or initiating transfers.
The only downside is that you don’t get any human support along the way.
It’s an (admittedly rather easy) DIY process.
But, given you can’t speak to anyone over the phone they tend to have much higher online transfer limits should you wish to trade more.
I just wouldn’t recommend it.
When you need to send a large amount of money, having specialised support readily available becomes even more crucial. That's why I suggest using a currency broker.
Money transfer apps are the best bank-alternative for transfers under £20,000.
Summary
In conclusion, be careful before calling on your bank to send money abroad.
Overall, on my criteria, Barclays is the best bank to transfer money internationally.
But, I would generally advise steering clear of banks for international money transfers.
Every single one of them imposes hefty exchange rate margins.
What’s more, they obscure the exact charges until the final moment, making it challenging for you to determine the total cost.
You're also pushed to handle your international transfers independently, unless you want to pay more just to speak with generic helpdesk staff.
Instead, I recommend utilising a currency broker or money transfer app.
One broker I’d recommend are Currencies Direct and Key Currency, who are renowned for their outstanding service and low currency margins.
Money transfer apps like Wise and Xe are great for lower amounts depending on your exact requirements.
Alternatively, obtain a comparison quote below through our exchange rate comparison.
For more information on receiving money to a bank account in foreign currency refer to my multi-currency account guide.
Sources:
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