Overseas Banking

If you own a property overseas, you'll probably need to make a range of ongoing payments to cover, for example, bills and mortgage fees. So, it is important that you are aware of what to look out for with your bank transfers. When dealing with an overseas bank there are many factors to take into account. Banking rules and regulations are different in each country and the level of service you receive varies between banking institutions.

UK Banks

All banks in the UK have unique packages for transferring monies abroad. Check the following points to make sure you are getting the best service:

Ensure that payments are sent quickly and safely -preferably via SWIFT (Society for Worldwide Interbank Financial Telecommunications). This is a global platform for instant wiring of domestic and international money transfers and is the safest method available.

Most banks will have a £10k-£20k limit when making a telephone banking transfer, so allow plenty of time for large transactions. It is also worth checking that you can authorise these from abroad as some banks require a letter to sanction large transactions or even that you visit the branch in person.

TT (Telegraphic Transfer) fees charged by UK banks can be as much as £40 per transfer. So shop around to find the cheapest option. On monthly transfers you could save up to £480 a year.

Exchange rates for transactions under £20k are likely to be the same or similar to those you receive for your holiday money. Make sure that you don't take the first rate offered to you - consider using a foreign exchange specialist to transfer your currency instead.

Overseas banks

The services that you receive from your bank can vary dramatically according to its location. Here are some tips to ensure you receive the best level of service from your bank.

Ask your bank for a Single Euro Payments Area (SEPA) payment when sending funds overseas. SEPA will allow customers to make non-cash Euro payments to any beneficiary located anywhere in the Euro area using a single bank account and a single set of payment instruments. Most banks in the EU should be able to do this and it works in the same way as a local transfer.

Open a local bank account and make sure that there are no language barriers with staff in your nearest branch. This will make it easier for you to discuss any of your queries. Read all the terms and conditions provided to you in English if possible so that you understand all the small print.

Check whether the bank has internet or telephone banking; can you arrange transfers from overseas? These facilities will save you time. You need to compare a number of local banks to ensure that you are receiving the best deal.

Some banks will require regular banking fees just for keeping an account open, unlike in the UK where the majority of accounts are still free. Check all the costs involved.

Check whether there are charges for receiving and sending funds or for withdrawing cash from an ATM. Check whether these charges vary depending on which bank's ATM you withdraw your money from.

Identify any charges for cashing a cheque. What are the clearing times? DO NOT cash a foreign currency cheque in your account; the bank may levy a charge and convert your funds at a poor rate of exchange. Instead open a bank account in the same currency as the cheque.

Bank holidays differ in each country, so take these into account when planning payments.

IBAN and BIC explained

The International Bank Account Number (IBAN) was developed to facilitate hassle-free cross-border transfers throughout Europe. The IBAN is not a new account number: it is a series of alphanumeric characters that incorporates the ISO country code, two check digits and the bank branch reference number, which precedes your own account number at that bank.

The Bank Identifier Code (BIC) is a universal method of identifying financial institutions to enable the automated processing of telecommunications messages (SWIFT messages) in the banking system.

When you make a payment to most countries, you are subject to bank charges once the funds arrive at the destination account. These charges differ from country to country and from bank to bank. When you provide the full IBAN and a valid BIC you can reduce charges significantly, as using both of these limits the need for the bank to manually process the payment. When sending funds abroad it is a good idea to contact your beneficiary bank and check that you have the correct IBAN and BIC. Without these, your money could take over a week to transfer. It is also worth noting that, in certain circumstances, the level of receiving bank charges can be negotiated by you with your bank.

Foreign exchange specialists

Foreign exchange specialists provide a cost-effective alternative to using your bank to make your international payments. Not only can a specialist provide you with a more competitive exchange rate for your transactions, they can also help to eliminate any receiving charges levied by your overseas bank.

Back to Oversesa Property