There’s a well-known saying that the world is getting smaller and smaller, and with low-cost airfare and an increasing number of people leaving their home nations to find new job opportunities in further flung corners of the world it’s certainly as relevant as ever. Our increasingly international lives may mean that we’ll be making more international transfers, and at this time of year sending sums to family members across the globe as Christmas gifts seems a safer option than trusting a package to arrive in a timely fashion.

International transfers, however, can be a costly affair and charges may differ when transferring from and to different countries. What follows is not a comprehensive guide, but it will hopefully provide you the framework for making informed decisions when choosing your transfer method.

There are generally three options for transferring money abroad, each with their own inherent strengths and weaknesses.

• Banks
• Money Transfer Operators (MTOs)
• Post Office

Banks

Commercial banks are the most costly type of transfer vehicle. The average cost of making an international transfer using a commercial bank currently stands at 12.86 per cent, significantly higher than the global average of 8.93.

Whilst you may believe that commercial bank transfers are therefore the dud of the group, think again. It is widely held that MTOs present a far greater risk of criminal activities such as money laundering, although MTOs staunchly deny this. Whilst the most expensive means of transfer, banks are reliable and offer a wider-range of insurances and products for making international transfers.

Money Transfer Operators

MTOs have been making their prices far more competitive since the 3Q 2011, bending to pressure from the international community. However, the pricing structure can shift dramatically depending on the destination country and provider, as the table below, which charts the costs of making £120 same-day transaction, demonstrates.

Whilst MTOs may seem like the cheapest route, it’s important to shop around find out which provider is giving the best rates for the country and currency you’re transferring to.

Post Offices

The cost of transferring money through post offices is by far the most cost-effective choice, and 3Q 2013 saw costs fall to 3.99 per cent, a lifetime low for the service.

However, there are drawbacks to using these services. Firstly, Post Offices don’t offer anywhere near the wide range of transfer options that MTOs and commercial banks do. For instance, they do not carry out cash to cash money transfers.

Also, Post Office international payment services are geared towards moving larger sums of money (£5,000+), and speedy movement of smaller sums is not catered for. However, when transferring far larger sums, the Post Office’s services you potentially save you a great deal of money..

Ultimately, your choice of transfer method should fall down to your particular situation. If the person you’re sending money to has an account with the same bank (or a sister bank), then a commercial bank may be your best option (as fees will fall in this instance. If you want speed and flexibility, MTOs are the way to go. If you’re transferring a large sum of money, then Post Offices offer the best value.