How to Save Hundreds of Dollars on Money Transfers to Mexico

You may be about to close a real estate investment in Mexico. Perhaps you are planning a destination wedding in Puerto Vallarta. Maybe you have other needs that require you to transfer a significant amount of money.

Most of your focus will be on the actual investment. But when the time comes to make the payment, you’ll have to figure out how to transfer all this money from the United States or Canada to Mexico.

When you transfer this money, you want to make sure you’re not getting ripped off with money transfer fees which can be hundreds or sometimes even thousands of dollars in unnecessary costs. Think about what you can do with that money instead!

So at Limón, where we live and breathe money transfers, we’d like to offer some tips to help you avoid unnecessary costs.

Understanding your options

When you need to send a large amount of money to Mexico – whether you plan to do it just once time or several times a year – the first option that may come to mind is to send money through your bank. Although this is a very convenient option as your money is already there, your bank will charge you for this convenience.

It turns out, there are other, cheaper alternatives. Unlike banks, where money transfers are not their core business, there are specialized cross border money transfer companies whose sole purpose is to offer the cheapest, fastest way for you to send money across borders.

Calculating the true cost of each provider

Two components make up the total cost of money transfers: the fee, usually a flat dollar amount, and the exchange rate. It’s critical to add the two together to figure out the true price of the transaction because companies have different approaches and tactics to advertise their service. While some like to market a super competitive exchange rate, but charge you a high fixed fee, others advertise no fees but may offer you a worse exchange rate.

When assessing the total cost, take the exchange rate and fee together calculate the amount of pesos that will result from your dollars and use that number to compare options.

Other factors to consider

There are other factors than cost that are important to consider when comparing options. Here are some worth having in mind:

Speed: How long will it take for the money to arrive in Mexico?

Track record: Can the transfer provider be trusted? How long have they been in business and what are their reviews and ratings?

Account opening requirements: Will it be simple to get up and running and execute the transfer quickly?

What you could save on a $20,000 transfer

It is simple to calculate how much you could be saving with a dedicated transfer service rather than your bank today, as money transfer companies display their latest exchange rate and fees publicly on their websites.

For this analysis we assumed a transfer from a United States bank account to a Mexico bank account and chose two of the leading companies that specialize in these types of transfers, OFX and Wise. Here’s how they compare to Bank of America on May 6th, 2021.

On a single transfer of $20,000 to México, you could save $200 – $300 using either OFX or Wise rather than going through Bank of America. Notice that even though Wise charges fees, they offer an extremely competitive exchange rate.

If you plan to transfer more than $20,000 – whether in one transfer or several over time – you can easily get a sense of how much this can add up to.

See for yourself how much you can save by logging in to your bank’s online portal and starting a test transfer to find out how many pesos they would offer. Don’t forget to look out for both the exchange rate and any fees they may charge on top. Finish by visiting the website of one of these money transfer companies to know exactly how many more pesos they could give you for the same amount of dollars.

Here, we’ll make it easy for you.

Let us know how it goes and reach out to hola@limonfinancial.com if you have any questions!