How to Save Money When You Need to Send Money

I will be honest. If I suddenly needed to send someone money, outside of looking up "Western Union" online I would have no idea where to begin. I also wouldn't have any idea how much it would cost me to send money to someone else, which means I would likely overpay. While it certainly isn't possible to scope out the cheapest and best options for every possible future wrinkle in life, with my brother and his family headed to China in a few weeks (they are adopting a baby boy—amazing!) I thought now is as good a time as any to learn more about sending money. I hope you can benefit from what I have learned as well!

1. Wire transfer

Fees are steep even when the amount of the transfer is minimal—and often assessed for both the sender and receiver.

• National wire transfer: Expect to pay between $20-$25 per transfer if you are the sender, and between $5-$15 if you are the receiver (some services also assess a fee as a percentage of the amount being sent—here, expect to pay between 10-20% of the amount).
• International wire transfer: Expect to pay $35-$45 depending on the currency being transferred. Recipient rates vary by country, and you can also expect to pay an exchange rate for transferring funds internationally.

Tip to save: Transferring funds from same-bank to same-bank typically incurs no fees for either sender or receiver. If the receiver can wait a day or two for the funds, you may also pay less in fees for a second-day transfer than for a same-day transfer.

2. Money order (cashier's check, bank draft)

You can purchase money orders through many retailers (grocery stores, post offices, banks, etc.) and cashier's checks or bank drafts at a financial institution. Bank drafts are the most expensive, and money orders are the least expensive.

• Bank draft: Varies by the amount being sent (since these drafts are used typically only for large transfers).
• Cashier's check: Expect to pay $10-$15 per check.
• Online money order: Expect to pay a $3-$4 flat fee plus a percentage of the sent amount (usually 4-6%).
• Money order: Expect to pay between $3 (grocery stores, post offices) and $10 (banks).

Tip to save: If you can manage it, a physical money order obtained from a non-bank retailer is always cheapest—but also check with your own bank first to see what they can offer you.

3. E-Commerce payment

Using a service like PayPal falls right in the middle of the fee spectrum for sending (and receiving) funds. For individual senders, the transfer is free. The recipient pays $0.30 per transaction plus 2.9% of the amount sent. Fees increase slightly for larger transfers and international transfers (add an extra $0.50 for larger transfers, and an extra 1% plus exchange rate fee for international transfers).

Note: PayPal also has a handy app (iTunes, Android, Windows) for mobile transfers, and fees are the same.

Tip to save: This is obviously a great deal for senders, but just be sure the recipient understands the fees before choosing this option. Also, both sender and receiver must have a PayPal account.

Want to send and receive funds for FREE?: Try Amazon payments instead of PayPal. You’re allowed to send money to individuals using your bank account, credit or debit card, or Amazon payments account, and both sending and receiving funds are free! 

4. E-Check

Fees are assessed only for senders at most financial institutions, but check with your bank or credit union for specific costs. In some cases the fee will be a percentage of the amount being sent with minimum and maximum caps (such as 1% of the amount sent, with a minimum cap of $10 and a maximum cap of $1,000).

Tip to save: Try to send via your own financial institution, where you’re almost guaranteed to be charged less—and the service may even be provided free to account holders! Also, transferring from same-bank to same-bank often has lower or no fees.

5. E-Transfer

Some banks and credit unions offer e-transfer (A.K.A. bill pay) services free to account holders, while others may charge a nominal fee. There may be account minimums to qualify for free e-transfers. For institutions that charge, a $1-$3 per transaction fee is typical (higher for international transactions).

Tip to save: Find out whether your bank offers free e-transfers. If not, and you anticipate needing to make frequent transfers and to use bill pay online, you may consider transferring your accounts to a bank who does offer these services for free!