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Transferring large sums of money

Useful Tips for Expats Transferring Large Sums of Money To and From Central America

Most expats at some point find themselves transferring large sums of money either to their new home or back to their old home country. In this article we offer some tips to make this task easier.

For expats, the ability to manage cross-border finances is critical. Whether you’re purchasing property, launching a business, or relocating savings, transferring large sums of money internationally efficiently and securely is essential. Understanding this process can save you thousands in fees and unfavorable exchange rates.

The average cost of transferring money overseas from the United States is around 5.52% of the transfer amount. For those sending money regularly or moving substantial sums, these costs can quickly accumulate. This guide will walk you through the best practices, potential pitfalls, and most effective methods for moving large amounts of money between your home country and Central America.

Understanding Your Options

Bank Transfers

Traditional bank transfers, while secure, often come with higher fees and less favorable exchange rates. The Society for Worldwide Interbank Financial Telecommunication (SWIFT) system, established in the mid-1970s, typically takes 3-5 business days for international transfers. Both sending and receiving banks may charge fees.
For example, if a customer wants to send money to Costa Rica, they need to have enough funds to cover the transfer amount plus the bank’s SWIFT fee. The receiver might also need to pay a fee. These fees can vary widely between banks and countries.

Online Money Transfer Services

Online money transfer services offer a competitive alternative to traditional banks. Services like Wise, Revolut, and PayPal provide lower fees and more favorable exchange rates. Wise, in particular, is known for its transparency and mid-market exchange rates, which are the fairest rates available. These services are user-friendly, with the convenience of making transfers from your smartphone or computer.

Comparing the fees and exchange rates of different services can save significant amounts of money. Wise often provides the best rates, followed by Revolut and PayPal. It’s crucial to check the rates and fees before making a transfer. Many of these services have fee calculators on their websites, making it easier to estimate costs.

Other Money Transfer Operators

Western Union offers fast transfers without requiring bank accounts. However, their exchange rates are often less favorable. For instance, when sending $1,000 from the US to Costa Rica, the market rate might be $1 to 512 CRC, while Western Union might offer $1 to 431 CRC.

TeleDolar (partnered with MoneyGram) is often cheaper and more efficient than Western Union. They offer competitive exchange rates and quick transfers, though recipients might face longer wait times for withdrawal. MoneyGram fees are generally lower than Western Union but more expensive than services like Wise.


Cryptocurrency transfers can be fast and potentially low-cost, but come with challenges. Both parties need crypto wallets, and there are “gas fees” for transactions. While the transfer itself might be quick, converting crypto to local currency can involve additional fees and complexity. Platforms like OKX or Coinbase are needed for conversion, and the process can accumulate various fees.

Factors to Consider

  • Exchange Rates: Even small differences in exchange rates can significantly impact large transfers. Use comparison tools like Monito to find the best rates and lowest fees across multiple providers in real-time.
  • Transfer Fees: Fees can vary widely between services, structured as flat rates, percentages, or a combination. For large transfers, services with a flat fee structure often work out cheaper than those charging a percentage.
  • Speed of Transfer: Transfer times can range from minutes to several business days. Faster services often come at a premium but might be necessary in urgent situations. Consider whether you need the funds immediately or if you can wait for a slower, potentially cheaper option.
  • Security and Fraud Prevention: Ensure the service you choose is regulated and has strong security measures. Be wary of any service that asks for sensitive information through unsecured channels. Verify the legitimacy of the transfer service with appropriate financial authorities in both sending and receiving countries.

Practical Tips for Expats

Documentation and Legal Considerations

Be prepared to provide extensive documentation for large transfers due to anti-money laundering regulations. This might include proof of identity, source of funds, and the purpose of the transfer. Generally, any transfer over $9,999 comes under this type of scrutiny. Understand the tax implications of large transfers in both your home country and Central America.

Setting Up Local Bank Accounts

Consider opening a local bank account. Be aware that some countries demand you have legal residency in order to do this. For example, expats in El Salvador, Guatemala, and Honduras need legal residency to open a local account. Costa Rica is a bit more vague – it’s much harder than it used to be for foreigners on tourist visas to open accounts, but sometimes possible. Most non-resident accounts are very restrictive in terms of how much money you can move in or out each month. Meanwhile, banks in Belize and Panama both allow foreign non-residents to open accounts.

Having a local account allows you to receive international transfers directly, often at better rates than using intermediary services. Moreover, local accounts give you access to local payment systems. In Costa Rica, the SINPE (Sistema Nacional de Pagos Electrónicos) system allows for easy, low-cost transfers between Costa Rican banks. Some banks offer multi-currency accounts, allowing you to hold both US dollars and local currency. This can be advantageous for managing exchange rate fluctuations.

Regular vs. One-Time Transfers

For recurring transfers like pension payments or salaries, setting up a regular transfer with a service offering competitive rates for frequent users can save money long-term. For one-time large transfers, it may be worth using a specialized forex service or negotiating rates with your bank.

Common Mistakes to Avoid

  • Overpaying on Fees: One of the biggest mistakes is not comparing options and overpaying on fees. Take the time to research and compare different services for each significant transfer. Don’t assume your bank or usual service always offers the best deal.
  • Not Considering Tax Implications: Don’t forget to consider the tax implications of large transfers in both your home country and Central America. Consult with a tax professional to ensure compliance with all relevant regulations.
  • Using Unreliable Services: Be cautious of using unreliable or unregulated services, even if they offer attractive rates. The security of your funds should always be a top priority.

Transferring large sums of money as an expat in Central America requires careful consideration of various factors including exchange rates, fees, transfer speed, and security. By understanding your options and doing thorough research, you can ensure that your money moves efficiently and cost-effectively.

Remember, what works best can vary depending on the specific amount, the countries involved, and your personal circumstances. Always stay informed about the latest transfer options and regulations to make the most of your expat financial experience.

CA Staff

CA Staff