International money transfer from the UAE to the US

I was once told that a good rule of thumb to calculate your salary in the UAE is to take your US salary and multiply it by 2-3. Add free housing (or a housing allowance), and decent benefits, and a standard 8.3% bonus at the end of each year. This means that most people here, from the labourers to execs, are sending money back to their home countries at some point. The poor, uneducated construction workers send money to their families on a regular basis as they work to pay off their expenses incurred just to get to this country. The white collar workers are more likely to stockpile their cash and transfer it out of the country when they leave on their plush repatriation allowances. Whatever the reason, expatriates in this country need a means to move money out of here.

We get a pretty good deal as US expats. In addition to controlling the world’s reserve currency (making it way cheaper for us to borrow money), many countries, including the UAE, have pegged their currency to the US dollar. This may not always be good for business, but it’s great for expats who don’t have to worry about currency fluctuations and the resulting loss from the currency spreads.

I’ve obtained some of the exchange rates of banks and money changers around here and tabulated them below. I included all the sending fees charged to obtain a “bottom line”: how much money do you loose on a transaction of sizes $100, $1000, $10000, and $100000. I included several methods of exporting money including wire transfers, demand drafts, and straight up cash exchange (i.e. carry your cash to the US… but don’t forget to declare it!). Note that there are two types of wire transfers offered: SHA (“shared fees”), where the intermediary banks take a random cut of the money, and OUR (“our fees”), where the receiving bank receives all the money you originally wired. OUR carries a premium of 100 AED. Intermediary banks can take somewhere from US $25-$50, and some occasionally take a percentage as well. There is no way to find out what these intermediary fees are prior to the transfer. I think OUR is the way to go if you must do a wire transfer. Note that the table does not include fees charged by the intermediary or recipient banks.

Spreadsheet in a new window

The numbers indicate that the best way to go is to exchange money for cash at a good rate here in the UAE and carry it to the US, unless you’re sending amounts of well over $100k. The SHA wires appear to have comparable fees as higher quantities are transferred, but they belie the previously discussed hidden intermediary bank fees. Shop around for a good exchange rate by calling the exchanges up. Here’s a list of them in Abu Dhabi.

Happy transferring!

Update: I am now using RAKBANK’s Evantage account, which gives you 1 free international transfer each month. For OUR transfers, they charge a 30 AED fee. I have verified that all the money makes it to the destination account for OUR transfers. For SHA transfers a $25 fee was taken out at the destination by the intermediary bank (Citibank), which is much greater 30 AED. The maximum transfer amount is 100,000 AED per day. The OUR transfers are still not as inexpensive as carrying cash over, but for security, expediency, and convenience I prefer wiring.

Update to the Update: I switched to using Al Ansari exchange. While this was motivated largely by RAKbank being annoying, also for the amounts I was transferring, the losses incurred were lower. The downside is that this is less convenient, and you have to get money to the exchange somehow. I was nervous about my cash disappearing somehow, so I wrote a check to maintain a money trail. Using a check is supposed to result in a 3 day clearance delay, but in reality I received my money in the US the next business day. Be aware that you will need to spend some time with the teller putting in all your bank information. Double and triple check that all the information is correct (especially the SWIFT code and account number, which my teller got wrong). They save this information so that you can look it up with your telephone number the next time. You will need to bring your Emirates ID or passport.

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