With millions of expats sending money home each month from the Emirates, the remittance market is big business.

It is estimated that expatriates transfer $30 billion (AED 110 billion) annually, according to the Foreign Exchange and Remittance Group website, and one company operating here, UAE Exchange, alone claims to hold a six percent share of the global market.

At the end of last year, there were 134 money-changing companies with 786 branches, according to the Central Bank’s 2013 report. With that much choice, how do you make sure you get a good deal?

Shop around at exchange houses

The first rule is to shop around for the best exchange rate. Some foreign exchange companies advertise their rates online – although they can change frequently, so it is best to visit the branches in person.

It is worth comparing them because rates can differ considerably. For example, one Monday evening, Al Fardan Exchange was selling one Indian rupee for AED 0.063, while Al Ansari Exchange was selling one rupee for AED 0.0613 and UAE Exchange was offering one rupee for AED 0.06410.

The differences don’t seem big, but when you convert AED 1,000 with the various rates you could have bought 15,873.02 rupees through Al Fardan, 16,313.21 through Al Ansari and 15,600.62 rupees through UAE Exchange – which is a not too modest difference of 713 rupees between the highest and lowest rate.

And just because one exchange house offers the best rate on one currency, doesn’t mean they offer the best on them all. For example, using data from the three exchange houses at the same time, converting AED 1,000 to pounds sterling (GBP £) on the Al Fardan Exchange rate (6.022) will buy you GBP £166.06, on the Al Ansari rate (6.06) the same amount will buy you GBP £165.02 and using the UAE Exchange rate (6.03251) you will get GBP £165.77. In this case, Al Fardan Exchange offers the better deal.

  Rupee rate AED 1,000 buys… GBP rate AED 1,000 buys…
Al Ansari Exchange 0.0613  ₹16,313.21 6.06 £165.02
Al Fardan Exchange 0.063 ₹15,873.02 6.022 £166.06
UAE Exchange 0.0641 ₹15,600.62 6.03251 £165.77

The difference is obviously smaller with the stronger currencies but, as the British saying goes, every penny counts.

The exchange rate can also vary considerably depending on what is going on in the politics or economy of a particular country so, if you can hold onto your money and transfer it in bulk when you get a better rate, you will save money.

Transfer rates and best days

After the exchange rate, the next important consideration is the transfer rate, which varies depending where you are sending your money.

Experts say it costs typically AED 15 – 25 to send money to South Asia, but charges for Europe and North America can be around AED 60 or even higher – so you should shop around for the best deal.

Be sure to also ask about “back end” fees, which are costs paid in some markets when the money is transferred to the other country.

Those in the know say the best time to transfer your money is during the Western working week, from Monday to Friday, which ensures you get the live rate, and not just an approximate rate, which can often be higher.

Remittance prices comparison

The World Bank has a remittance prices comparison calculator to compare both fees and exchange rate margins on USD $200 and USD $500 in all the most popular remittance ‘corridors’ in the world and from all exchange houses.

For the UAE, that means comparisons of transfers to Egypt, India, Nepal, Pakistan, the Philippines, Sri Lanka and Yemen; and for Saudi Arabia, transfers to Bangladesh, Egypt, India, Jordan, Nepal, Pakistan, the Philippines and Yemen.

Online transfers

Online transfers are another option, as there is less chance for human error, they can be faster and cheaper – and of course you can also avoid the queues.

Banks offer online transfers for customers, often with special deals to specific countries:

[Compare UAE bank accounts]

Do watch out for the exchange rates, however.

There are also other online exchange sites:

  • One option is Money2anywhere.com, which is run by UAE Exchange. Benefits, according to the website, include “bank-beating” exchange rates and discounted charges.
  • You could also try WorldRemit, which claims to have low fees, instant transfers and feature industry leading security technology.
  • And if you are sending money to India, you may want to try the online service remit2india.com, which offers expatriates the opportunity to use their credit and debit cards to send money home in real time. [Related: New online remittance service for UAE NRIs]

There is no shortage of options out there but, as always, be sure you compare them first.