How to transfer money within Germany and abroad

Money transfer is transferring money from one bank account to another through one special transferring form. Usually, you receive bills with specified amounts of money and relevant bank details of the recipient. It is a good idea to keep a copy for yourself whenever engaged in transactions.

Depending on where you transfer money – either inside your country or abroad – there are corresponding methods to perform the procedure.

Methods to transfer money within Germany:

Standing Orders

Are typically used to pay rent, mortgage or other types of fixed and regular payments. For this reason, standing orders are not suitable to pay variable bills like credit cards or electricity bills. In other words, it is an instruction given by the bank account holder to his/her bank on when to pay a set amount of money to another’s bank account. It is also called a banker’s order. You can change specifications, like the amount of money as well as the date when the money may be taken from your account.

Direct debit authorization

A direct debit authorization is a permission given to a company to take money from your bank account automatically. The amount and the date when the money may be taken is specified by the person or the organization the money is intended for. However, you must be informed days before about when the transaction will be executed. By signing a Direct Debit Mandate form with the firm, you can set up a direct debit arranged between you two. It can be set up for payment on particular dates, every month, quarter or year.

Methods to transfer money abroad:

Transferring money within your country, in this case – within Germany, is quite fast and direct, but it is not the same for international transfers as these may take weeks, particularly when the specified banks are non-affiliated.

Below are mentioned some of the alternative methods of international transfer:

SWIFT transfers

SWIFT (Society for Worldwide Interbank Financial Telecommunication) is an internationally recognized code comprised of 8 or 11 alphanumerical characters and is most often used by banks for international wire transfers. The SWIFT is a network that enables worldwide financial institutions to send and receive information upon financial transactions in a reliable and secure environment. However, it is not responsible to hold member’s accounts, nor to perform clearing or settlement forms and it also does not facilitate fund transfer, it only sends payment orders which are settled by both correspondent accounts. Comprehensibly, in order to enjoy banking transaction exchanges, both correspondents must have a banking relationship.

Bank Drafts

Is a payment on your behalf, guaranteed by the issuing bank which will immediately debit the payer’s account for the specific check’s amount and withdraw the amount of money from his/her account. Bank drafts are commonly used by banks when dealing with other banks as well as when a creditor or a seller does not accept an ordinary check from a debtor or buyer in another city or country. In addition, a fee is charged by your bank for the transaction. In normal circumstances, a draft will certainly be paid, and it is generally accepted as a cash equivalent – also known as banker’s draft.

Money Transfer Agencies:

Another way of transferring money abroad is through international money transfer agents like the MoneyGram and the Western Union. Originally, these methods were designed for usage by people who do not own bank accounts. Being generally faster and reliable than the traditional bank transfers, they are of great use. Commissions withdrawn for these methods are quite high, usually around 7 to 10% of the amount of money you send. Completing this transaction is very easy: you pay your money in cash to the agency office and give the details of the receiver and where they will pick the money up – as simple as that. The receiver then goes to the same agency’s office in their country with their identification and receives the money in cash, instantly.

MoneyGram

Is the second largest provider of money transfers in the world. The company operates with individuals and businesses by a network of agents and financial institution customers.

Western Union

A company for financial and communications services spread around the world, providing products like: person-to-person money transfer, money orders, business payments and commercial services. You can deposit money at one of Western Union’s kiosks and then the receiver can pick that amount of money up from Western Union’s kiosk in their country.

PayPal

Is an electronic commerce company facilitating payments between parties through online transfers. You, as a customer are allowed to establish an account on PayPal’s website which is connected to your credit card or checking account, and in this way you begin sending or receiving payments to and from other PayPal accounts. By not having to disclose credit card or bank account numbers, PayPal makes online purchases safer.

TransferWise – Cheapest and safest way to transfer money abroad:

Is the best and newest option out there for money transfers – based on their transparency and small conversion fees. Exchange rates are kept fair, real and transparent – it costs up to 10 times less than what banks charge. For amounts up to £200 TransferWise charge £1, whereas for amounts over £200, the charge/fee is 0.5pc of the total. A clever way to convert money and send abroad and a safe method, as it is regulated by the UK’s Financial Conduct Authority, verifying its users to protect from unnecessary fraud. A peer-to-peer system with technology possibilities of finding individuals who want to convert their pounds to euros and giving access to real mid-market exchange rates, helping you avoid traditional banking fees altogether as well as money loss by unfair rates.

Another great and additional thing about TransferWise is allowing customers to send proof of other companies’ charges. If another company charges less than them, they will want to beat their price!

Up to now, over  £3 billion have been transferred through this platform, with every transfers being done within one day!

Importing and exporting money:

Importing and exporting money is completely regulated and allowed. You are obliged to report to the Bundesbank for transfers over 12,500€, only. Preferably, learn about the country of destination and origin before initiating transfers, in case of applicable restrictions.

 

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