Pay attention to the hidden charges in money transfer transactions, not just the transaction charges.
There’s nothing simpler than banking in the UAE. Banks in the country have made all their transactions extremely easy for customers, leading to hundreds of people opening new accounts every day, while thousands more use Internet banking and phone banking for all their personal and business needs.
While in the UAE, you may be an expat on a work assignment or a resident with ties abroad. In either case, or even if you’ve got your entire family settled in different parts of the country, there will be a time when you will need to transfer money. Transferring money from your bank account in the UAE to other Emirates-based accounts or accounts in other countries is very simple – but you must know how much you are being charged for the same.
Most customers seek information solely on how much the bank charges them per such transaction. However, there may be other charges that you are not aware of when you transfer money. Look out for these:
Exchange rates: The bank will deduct fees for exchange rates per transaction. These fees will be applicable on transactions in certain markets. How this works is: if the exchange rate between UAE and another country is say, 20 units per Dirham, and the bank’s transfer rate is 20.50, then the bank will charge a margin of 0.50 units per Dirham. Ask your bank what its exchange rate is when you transfer money, and make your enquiries before you undertake the transaction.
Remittance fees: Most banks in the UAE will charge remittance fees ranging from Dh 15 to Dh 25. Find out the fees your bank charges.
End destination fees: This is also informally known as ‘back end’ charges, where the customer is charged for the transaction, but the end beneficiary is charged for processing and delivering the money. Hence, you may find that every time you transfer money, there is an additional fee being tacked on once the transfer is complete. The end destination fee may be charged in the currency of the country that you are remitting the money to, i.e. if you are transferring funds to the Philippines, you may be charged the back end fees in Philippine pesos. However, these charges are not charged by most countries entering into transactions with UAE banks.
A sum of all these charges (and any more, depending on the bank) will leave you with a lesser share of the money you originally transferred. Before entering into any such transactions, take stock of all the charges levied and whether the money transfer model is making fiscal sense to you and the end beneficiary.