The United States has one of the most extensive and robust financial services markets in the world. For most individuals and companies, this can mean low fees when trying to send money abroad. Below are five considerations to consider when finding an institution to send funds to family, friends or workers in overseas locations.

Think Through the Options
First, consider the money transfer options available. The most obvious choice, and probably most cost effective, is to be a customer of an international bank that has branch locations in both your home market and area that you want to send your money. Granting access to the party that will receive money is an option, as is having him or her set up an account where the funds can be transferred to.
Electronic transfer is likely the most appealing and expedient. Sending a check, or even cash, via money transfer shops can be both time consuming and expensive. An intra-bank transfer is probably going to be the most effective. Online sites, such as eBay's PayPal, could allow transfers that are very quick and among the most affordable. PayPal allows free transfers among individuals in the U.S., but charges nominal fees for sending funds overseas.

SEE: The Pros And Cons Of Internet Banks

Plan Ahead
With ample planning, costs can be minimized. Sending funds electronically should be the most efficient and cheapest, but for using shops such as Western Union, last-cost transfers are quite expensive. For a $500 transfer to Mexico, an immediate online transfer costs $35 by phone, $22 online and $14 by visiting a Western Union vendor in person. Walmart's Xoom transfer service lists fees as low as $5, but those required in short periods of time are going to be the most expensive. PayPal again looks to be the most affordable for individuals and estimates only a 20 cent transaction fee by using an existing PayPal account or bank account.

SEE: Choose To Beat The Bank

Shop Around
Simply doing your homework can prove extremely beneficial. Transferring funds to large markets where many banks operate is likely going to be very affordable, but sending money to far flung locations may take some more work. It may be that a provider has certain expertise, such as Banco Santander to other Latin American markets. Smaller denominations are likely to be more expensive as well, and this might again favor online transfers for individuals to make transfers the most cost effective.

Focus on Fees
Fees can really eat up the amount of funds being transferred. Again, smaller denominations are going to be the most expensive on a percentage basis, as are transfers that need to be made as fast as possible. It's also very important to note that some providers make money by converting currencies. When making a transfer, be sure to look up the current exchange rates and make sure that the conversion rate used by the bank or money transfer company is close. Most online sites list the current exchange rate, but be sure to verify this from an outside, independent source.

The Bottom Line
With sufficient time and research, transferring money to foreign locations can be very affordable. Online transfers via large banks or independent firms such as PayPal can be close to free, especially for larger amounts on a percentage basis. It also makes sense to try and make transfers as little as often, which can help save on transaction costs and increase the amount to cut down on fee percentages.

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