The five main methods for receiving money from overseas (in no particular order) are:
- Your bank
- Currency broker
- Digital multi-currency account
- Remittance companies (cash pick-up/home delivery)
- Digital wallet
Each option comes with its own set of strengths, weaknesses, and rationales for use.
Which one you choose depends on your situation, but there are very few instances I’d recommend a bank.
In this article, learn about the best ways to receive money from overseas and how to identify the one that aligns with your requirements.
Quick View: The Best Way to Receive
Here I will compare the 5 main methods to receive money from abroad:
What do you need to consider when receiving money internationally?
Your decision should consider factors like:
- Cost
- Safety
- Speed
Consider whether you would like to be paid in your domestic currency or the currency of the sender.
Also, ask yourself: am I in a position to insist on receiving the full amount in my domestic currency?
These factors all influence the best way to receive money, depending on your circumstances.
How to receive money from overseas
This all depends on how and why you’re receiving money.
Let’s explore each of the methods in more detail and when they might be best now.
Your bank (safe - but expensive)
Banks are arguably the safest way to receive money from overseas.
Electronic wire transfers are in themselves one of the safest ways to receive money.
Then, once funds have credited your account, they’re protected up to £85,000 with banks participating in the Financial Services Compensation Scheme (FSCS).
With that being said, specialist money transfer companies accept electronic wire transfers and are also considered to be very safe.
Personally, I don’t necessarily believe banks are any safer, and certainly not to the extent that they’re worth the extra cost and worse service.
There’s only one scenario that I’d recommend using a bank.
I’d only use a bank when the sender has agreed to pay you the full amount in your domestic currency.
With a bank-to-bank transfer there are various fees to be aware of:
1. Fixed transfer fees, charged to the sender
Each international transfer initiated by the sender incurs a standard fee from their bank.
This can range from £10 to £35, or currency equivalent, depending on the sender’s bank.
2. Fees from intermediary banks, charged to you or the sender
International money transfers may pass through one or several intermediary banks.
Intermediary banks usually charge between £10 and £15 for their role in processing the transfer.
Unless the sender proactively opts to cover these charges, they default to the receiver.
3. Charges from your bank to receive money internationally
To receive money from abroad, banks typically charge somewhere between £5 to £10 in the UK.
European banks often charge substantially more.
Why you shouldn’t use your bank
Beyond these fees, there is also the concern of the significantly costlier markup on the currency exchange.
Banks offer lousy exchange rates with a high foreign exchange markup.
When sending money, this tends to start at 2.5%, but is often much higher.
It’s quite normal for the fees of the sender to total 5%+ of the transfer amount.
That’s a lot for them to take on.
If the sender transfers their own currency to your account, your bank will contact you to ask whether they should convert the money or return it to the sender.
I’d strongly suggest against allowing your bank to convert the money.
When the receiving bank conducts the currency exchange, this is often done with a markup of 4% - 6%.
With all these fees, it’s easy to see why I’d only recommend using your bank when the sender agrees to cover all of the costs and commits to you receiving the full amount.
Even then, you’re still having to pay a fixed fee for receiving money from abroad.
It’s also worth considering the impact of asking the sender to accept all of these fees.
If you’re a business, higher transfer costs reduce importers' confidence.
Personally, I wouldn’t want to make it even harder for overseas customers to trade with my business.
There are some better solutions offered by banks like HSBC Expat which offers multi-currency accounts.
With HSBC Expat, you can receive the payment in local currency regardless of which currency it is.
But it is still more expensive than with a currency broker.
Currency broker
Currency brokers are a type of specialist money transfer company.
They’re experts in handling large transfers, whether that be sending or receiving large amounts of money from overseas.
Simply register for your preferred currency broker and explain to them that you want to receive money internationally.
Here’s the likely process:
Rather than providing the details of your domestic bank account to the sender, you’ll provide the account details of the currency broker.
Sometimes, currency brokers have local account details in the country of the sender.
This lowers payment fees for the sender and should help to avoid intermediary bank fees associated with SWIFT transfers.
The currency broker will then process the currency exchange at bank-beating exchange rates.
You provide your domestic account details to the currency broker and they make a local UK transfer to your account.
This avoids the fees charged by banks for receiving money from abroad.
I’d use a currency broker if you’re:
- Receiving large amounts of money from overseas
- Receiving inheritance money from overseas
- Receiving money as a gift from overseas
- Repatriating the income from a property sale
Any scenario where you’re receiving a fixed amount in a foreign currency, like an inheritance, you’ll want to ensure it’s done at the best exchange rate possible.
You can either rely on the sender to do this, or you can put the power in your hands if you opt to do the currency exchange yourself.
Currency brokers are one way to take charge of the process and pay less in currency exchange markups.
Multi-currency account
In certain scenarios, multi-currency accounts are the most convenient and cost-effective method to receive money from overseas.
Fintech giant Wise is perhaps the most known provider of multi-currency accounts.
The company moves £105b each year through its online system and app.
It’s a different kind of specialist money transfer company to a currency broker.
Their account lets you hold over 50 currencies and receive local transfers in 10, without any cost.
This includes currencies like GBP, EUR & USD.
So if you’re set to receive money in euros, you can open a euro account, with full banking details, that’s held in europe.
Meaning the sender can initiate a local SEPA transfer with little to no fees.
If you’re a business, that reduces barriers to trade and makes your offering more attractive.
As an individual, there’s a lot of advantages too.
With a multi-currency account, you can run balances in multiple currencies, make wire transfers, and convert balances to your preferred currency when it's advantageous.
Wise uses the mid-market rate for currency exchanges and instead applies a variable fee that is roughly 0.5% of the transfer.
In practice, this works the same as a markup on the currency exchange.
It’s just a much better deal than the markup applied by banks and usually beats currency brokers on transfers under £20,000.
If you want, you can also link your multi-currency accounts to a Wise debit card, and spend from your balances around the world.
I’d use a multi-currency account if you’re:
- Invoicing clients as a freelancer/SME
- A digital nomad
- Receiving a small amount of money from overseas
- In a position to hold onto foreign currencies until the FX rate improves
The Wise Multi-Currency Account is very easy to set upand use:
Just not that a cheque or bankers draft cannot be paid into a multi-currency account.
They are strictly to receive money online.
Remittance companies
Remittance companies specialise in transfers like UK to India or UK to Pakistan.
These companies often offer cash pick up as a transfer method.
i.e.
You don’t need to have a bank account to receive cash through a remittance company.
Once the sender has paid for the transfer, you can just pick up the cash from a designated pickup point or, with some providers in some countries, have cash delivered to your door.
It’s usually pretty fast. Sometimes, the cash can even be collected instantly.
This is because the money doesn’t have to pass through the banking system first.
The other advantage is there’s no need to register as the receiver. Simply turn up to the pickup point with an official ID.
One of the main limitations is the value you can receive at any one time or over a period of time.
For example, Xoom implements a limit of between £46,500-£120,000 over a period of 180 days.
If you are looking to receive greater amounts than that, you wouldn’t be able to do so.
You have to contact them to up the limit, and it’s not guaranteed either.
I personally wouldn’t receive more than £2000 using a remittance company.
Exchange rates for collecting cash are usually quite a bit worse than when you receive money online.
All things considered, there are just two instances when I’d recommend them:
- You only have the ability to receive money in cash
- You need to receive money from a remote destination fast
Digital wallet
Lastly, it’s possible to receive money from overseas via a digital wallet.
You might know them as mobile wallets or e-wallets.
However, to receive money on a digital wallet, both you and the sender have to register with the same service.
You can’t receive money into a digital wallet from an international transfer.
Popular digital wallets, like PayPal and Skrill, are available in hundreds of countries. So it’s not impossible that you and the sender could both register for the same one.
The question is, is it worth it?
I would say no.
Once you go through the hassle of registering, the good news is that the transfer is almost instantaneous.
The bad news is the cost. Currency conversion with Skrill costs 3.99%, while receiving money with PayPal can see total fees exceed 7% of the transfer value.
Even more expensive than banks!
Digital wallets are a convenient and often free option to receive money domestically, but I wouldn’t ever recommend them as the best way to receive money internationally in any circumstances.
What bank details are needed to receive money from abroad?
To ensure the secure arrival of your funds, it's important to provide the sender with specific details.
To receive an international wire transfer, you should give them:
- Your complete name and address, exactly as they appear on your bank account
- Your bank's name and address, along with its BIC/SWIFT code
- Your bank account number and sort code, often presented as an IBAN
- A reference for the transfer, which will help you recognise it
When using a currency broker, you’ll have to provide their account details.
They’ll then convert the money and send it to your domestic bank account.
If you're opting to collect the payment in cash, the sender will need:
- Your full name (matching the one on your government-issued ID)
- Your country and address (where required)
For deposits into a digital wallet, the required information varies based on the service.
With PayPal, you can receive money from another PayPal user by providing either the email or mobile number you have associated with your account.
How much money can you receive from abroad into the UK?
There’s no official cap on the amount of money you can receive from abroad into a UK bank account.
However, that doesn’t mean transfers are always entirely unrestricted.
Some banks and transfer services apply their own limits. These could be per transaction, per day, or over a rolling monthly or annual basis.
It’s a good idea to confirm these limits with yours and the sender's bank in advance, particularly if you’re expecting a high-value payment.
You may also be asked to provide supporting documentation for larger transfers. Have this readily available to avoid delays.
Keep in mind, if you bring over £10,000 cash into the UK, you must declare it to customs.
You won’t encounter this issue if you receive money via a remittance company.
Do you pay tax if you receive money from abroad?
It depends on why you’re receiving the money.
If you’re a UK resident, you’ll usually need to pay tax on income earned from abroad.
If you’re non-resident in the UK, foreign income and gains are generally not taxable.
Seek official sources for more information.
Gifts of money from overseas are not subject to income tax.
Overseas inheritance may be liable to UK inheritance tax, but double taxation agreements often apply, so you shouldn’t be taxed twice.
We don’t provide tax advice, speak to an expert to be sure of your situation.
What is the safest way to receive money from overseas?
I’ve already explained why banks are regarded as a safe and trusted option to receive money.
But, there are scenarios that a money transfer specialist can be considered just as, if not more safe, than a bank.
When considering any payment provider, be sure to check they’re financially regulated.
The FCA doesn’t just hand out regulations willy-nilly.
It means that the company’s operations are constantly reviewed, audited and scrutinised to maximise client safety.
The FCA requires authorised payment institutions and electronic money institutions to “safeguard” client money.
This is different to the FSCS scheme that guarantees deposits up to £85,000.
In the unlikely event an FCA regulated app or broker goes bust, there is no limit on the amount that can be recovered.
Safeguarded client money cannot be used to settle debts with other creditors.
Only one scenario could potentially jeopardise client funds.
Should the liquidator's expenses surpass the available funds at the payment company, they have the right to offset these costs using client funds.
Your perspective on this matter will shape your opinion regarding which option is more secure.
To make it easy, every payment company featured and on TopMoneyCompare is regulated by the FCA.
Any reputable currency broker, money transfer app or digital wallet is a safe way to receive money online.
Summary
The five main methods to receive money internationally are banks, currency brokers, digital multi-currency accounts, remittance companies, and digital wallets.
The best way to receive money from overseas depends on individual needs, but banks are rarely the best option.
There’s no legal cap on how much you can receive from abroad, but larger transfers may require supporting documents, and banks or providers often set their own limits.
When a currency exchange is required, consider if you want to have any influence over costs which can quickly escalate and seriously dent into the value you receive.
If you’re due to receive money from a will, a gift, or any kind of inheritance from overseas, I would suggest you do.
It’s a good idea to speak to a tax adviser if you’re unsure whether money received from overseas might be taxable.
If you’re a business trading internationally, it also makes sense to consider receiving foreign currencies and managing more of the process yourself.
Banks are safe but expensive due to high fees and poor exchange rates.
Currency brokers are ideal for large transfers, offering better rates.
Multi-currency accounts like Wise are convenient for small transfers and holding multiple currencies.
Remittance companies are fast and don't require a bank account, suitable for small cash transfers.
Digital wallets are quick but costly for international transfers.
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