Are you an Australian expat living in the USA? Maybe an American living in Australia? If so, you’ve probably found out the hard way that how much it costs to send money from the USA to Australia, or from Australia to the USA.
Banks in both Australia and the US are notorious for charging high fees while offering the worst foreign exchange rates. You might end up paying more than USD20 for a small international transfer to the USA. Which is why there has been a recent surge in the usage of commercial foreign exchange firms. They can transfer your money at the best exchange rates without charging high fees.
Have a look below at the best option for transferring money between USA and Australia:
Money transfer when buying property in the US
You’re not necessarily spending only on your day to day needs. There are great ways to make a passive income in American investments. Real estate is one of them.
Real estate costs in the US have increased exponentially since the subprime meltdown in 2008. Investing in a prime location in Manhattan will cost you more than USD900,000. But that investment will turn in great profit. Rental fees in Manhattan should generate around USD4,000 every month.
However, an investment of this size will require you to send regular transfers to the USA. And, if you’re still living in Australia, you’ll need to regularly transfer your profits back home.
The problem is that, in order to transfer that money from AUD to USD through your bank, you’ll end up paying a staggering amount of approximately USD18,000!
Independent money transfer companies, on the other hand, will offer you an exchange rate markup of around 0.5% or less for a transfer this big, meaning you will spend only USD4,500 in fees.
Australians in USA – a report
There are approximately 160,000 Australians living in the US. A large percentage of these expats live in the Northeast region. Around 40,000 live in Los Angeles, with a further 20,000 living in New York.
Many Australians move to the US for entrepreneurial opportunities. The startup community in the US is more extensive than that in Australia. However, over the past few years, Australia’s tech startup community has been blowing up, while America’s is slowing down.
Part of what makes it possible for Australians to move to the US is that the cost of living is significantly lower. Australia is one of the most expensive countries in the world to live. Furthermore, many Australians feel somewhat isolated from the global community. America is at the forefront of Western culture, making it an attractive destination.
Although getting a US Visa for business travel or tourism should not present too many problems, getting permanent residence or work visas is notoriously difficult. It can be a very lengthy process, and Australians planning to apply should ensure they do so as early as possible. Also, entering the US with a criminal record, no matter how minor, will present a problem even for short trips.
Americans in Australia – a report
Conversely, many Americans are moving to Australia. While the cost of living is significantly higher, so is minimum wage. However, if you work in a very senior role, you will probably earn more in the US (and pay much lower taxes). Welfare and public services, including public health, are far more freely available in Australia.
While the US has been a hub for tech startups, Australia is fast becoming a popular startup destination.
Getting a tourism or business visa in Australia is much easier than the converse. For those wishing to work in Australia on a more permanent basis, a range of options are provided. Applying to live in Australia as a permanent resident is far easier if you have a close relative who is a citizen.
The AUD/USD pairing
The USD is the most traded currency in the world, while the AUD is the fifth most traded. The exchange rate from USD to AUD, and from the AUD to USD, has remained relatively stable over the past ten years. Having dropped to USD0.45 for 1 AUD in 2001, it had recovered to above USD0.96 in 2008. In 2010, the two currencies were equal for a few seconds, and then recorded higher levels for extended periods in 2011.
Over 160,000 Australian citizens are living in the US. For these Australians, as well as those wishing to invest in American real estate, money transfer fees and exchange rates are very significant. With banks charging exorbitant rates, expats stand to lose high amounts of money. FX transfer firms charge far lower fees, making it more affordable to live in comfort as an expat.
Citizens of the USA are also moving to Australia, especially considering the boom of startup tech companies in the country. With a relative stability in the AUD/USD pairing, there should be no problems in transferring from one country to another, and working or investing can be very lucrative.
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