With online and mobile banking platforms getting more and more advanced every day, transferring money between local or international accounts takes only a few clicks of the mouse or taps of your fingertips. However, there are still a few roadblocks you could face while moving your money or receiving funds. Anticipating these bumps in advance could help you plan your finances and manage your payments better.
We speak to a few UAE residents who’ve walked away wiser from their last fund transfer experience:
“My funds transfer was put on a hold due to an internal error”
From security reasons to international anti-money laundering laws, a bank will ensure that all the details related to any money transfer are in perfect order. If you make a mistake with the payee’s name, account number or bank details, it is likely that your request to transfer funds will not go through.
Very often, such mistakes can happen on the bank’s end as well. Samir, a Dubai resident tells us his story, “I was to receive an international payment from a client in Kuwait. The sending bank made a minute error in typing the name of my bank here in the swift code copy. Due to this the transfer was held for a month.”
“My employer’s monthly fund transfer to me doesn’t reflect as a ‘salary credit’ in my statement”
In a situation almost unique to the UAE, where a salary transfer to your lending bank is some times compulsory for taking out a loan or at least gets you a better rate – not having a traditional ‘salary account’ can cause a lot of trouble. Many people working for free zone companies find themselves in a bit of a fix.
While it is mandatory for all other companies here to use the WPS (Wage Protection System) account to transfer salaries of employees, free zone companies have been exempted by the Government. When a salary is credited via the WPS, it reflects in the employee’s account statement as a ‘salary credit’. Without the WPS, it only shows up as a regular funds transfer. It might be a small technical difference but how this is perceived by your lender varies from bank to bank. Most banks are more comfortable offering finance to people that have ‘salary’ accounts, as this offers them a security of the repayment.
[Learn more about WPS in this guide]
Matthew who recently took up a new job with a free zone company didn’t anticipate this speed breaker to his car buying process. After selecting his dream pair of wheels, when he approached the bank for a loan he was surprised to learn that his application could get declined since his monthly salary reflected as ‘internet transfer’ on his account statement rather than ‘salary credit’. He says, “Only after my HR department went through the entire process of getting my compensation reflect as a salary credit to my account for that month did my bank pass my loan.”
“International funds transfer took longer than anticipated as the recipient’s country had public holidays”
When you send money to an account overseas, the bank or money exchange usually tells you it would take two working days for the transaction to reflect in the payee’s account. However if there are holidays in between, in your country as well as the payee’s country – this calculation for ‘two days’ can go for a toss. Be sure to plan ahead and find out if there are any Sundays (generally a holiday out of the UAE) and national holidays in the country you are sending money to.
“Money transfer rates fluctuate based on the rate your bank is charged by the Central Bank”
Don’t assume that the fees you paid last time for a funds transfer would apply every subsequent time. Just as currency conversion fluctuates, the fees you are charged by your bank may also change depending on the rate they are in turn charged by the Central Bank. Always check the cost before completing your transaction.
Also, did you know that an outward remittance made online is usually cheaper than one made from the bank’s branch? We list a few examples:
[Compare bank accounts in the UAE and apply online]