The majority of teachers who are working in China will at some point want to send money back to their home country. For some teachers, this may be a monthly occurrence, whereas for others they may simply want to access money that they’ve saved when their time in China has come to an end.
In a previous blog post, we showed you How Much Money You Can Save by Teaching English in China. In this post, we will now break down the different methods of converting your hard-earned Chinese Renminbi into a currency of your choosing and sending it back home.
One of the most common methods used by teachers in China to send money home is to do it the traditional way – via the bank. This method is both very secure and reliable but does have a couple of downsides.
Foreigners in China have a $500 limit on how much money they can withdraw, before having to provide certain documentation. For any amounts over $500, proof of ownership and proof that tax has been paid have to be provided to the bank. This means that any teachers who want to send home a large amount of money will have to go through a very time-consuming process at the bank, and ensure that they have all the required documentation, in order to do so.
Another downside to this method is the fees. In order to send money out of China via bank transfer, a rather expensive bank fee needs to be paid on every transaction, along with a fee of between 2% – 4% for currency exchange. This means that sending a large amount of money home via bank transfer can be quite expensive.
One of the cheapest and quickest ways to get money out of China is through the help of a Chinese citizen. As shown with bank transfers, foreigners have a limit of $500 that they can send out of the country before having to provide documentation. Chinese nationals, however, are able to transfer money overseas with a lot more ease, and overall are allowed to send up to $50,000 every year!
If you have a close Chinese friend or colleague that you trust, then a way to reduce transfer fees, along with time spent at the bank is to directly transfer them the money you want to send home, and they can transfer it to your overseas account for you. They can do this either via bank transfer or with the use of Alipay. Alipay is certainly easier, as they can transfer the money straight to your home bank account from the Alipay app, without even having to enter the bank. We mention Alipay and its uses in our 5 Must-Have Apps When Moving to China blog post.
A relatively straightforward method of getting your money out of China is through the use of Paypal. In order to do this, you’ll need to create a Chinese PayPal account and link it to your Chinese bank account, there are several steps to do this, but once done you can transfer money to either UK or US Paypal accounts. The main downside of using this method is that there is typically a 2% – 3% international transfer fee, along with a currency conversion fee, which makes it an expensive method.
Fly With Cash
If your time in China has come to an end, or you’re just visiting home and have some money that you want to get out of the country, then a simple method is to take some cash on your flight back with you. This is obviously straightforward to do and will save on international transfer fees.
There is, however, a legal limit on how much cash you can take out of China, and any individual exiting with more than 20,000RMB is required by law to declare this with customs. Also, as we showed in our blog post ‘How Much Money Can You Save by Teaching English in China?’, most teachers tend to save far more than 20,000RMB over a year of teaching. So, although this is a nice, easy method for taking a small amount of money home with you, it’s not an effective way of getting all of your savings out of the country.
If you return to your home country from China, and you still have money in your Chinese account that you’d like to retrieve, then one method of accessing it is to simply withdraw the cash from an ATM using your Chinese bank card, otherwise known as a Union Pay card. There are a couple of issues with doing this though.
Firstly, not all ATMs outside of China will accept Union Pay cards. Certain big banks do allow withdrawals from their ATMs, such as Barclays in the UK, but finding and accessing specific ATMs like this may be a pain.
The next problem is the withdrawal fees. Withdrawing cash using a Union Pay card outside of China has a large withdrawal fee associated with doing so, along with a currency conversion fee. There is also a limit on how much cash you can withdraw at one time, meaning that if you want to access a large amount of money then using an ATM is simply not a viable option. This method is only useful if you have a small amount of cash that you want to obtain.
The four main methods that we have listed so far are the most popular with teachers in China. An alternative method to these four is through the use of the platform Swapsy. With Swapsy users can transfer different currencies to each other via Alipay, WeChat, and Paypal, but the money doesn’t actually leave the country of its origin, so it saves on international transfer fees!
Here’s how it works. Let’s say there is an American citizen who is based in China and wants to convert some RMB to USD, and send it home. Swapsy could partner this individual up with a Chinese citizen who wants to do the opposite, and convert some USD into RMB. An amount is agreed and both users send the money to each other, with Swapsy policing the transaction.
This platform is very easy to use and certainly saves on a lot of fees that are encountered during other methods of getting money out of China. However, there are a couple of drawbacks to using Swapsy. The first being that you can’t exchange the exact amount that you want to, as finding someone who wants to exchange an identical value of a different currency is extremely rare. In addition to this, there is a limit on how much you can transfer in one transaction, with $300 being the maximum, so multiple transactions will be required in order to send large amounts of money.
In conclusion, although it’s not straight forward there are several different channels that you can take in order to get your money out of China. But, as we have shown in this article, some methods are more expensive than others, depending on how much money you want to send.
The best method is without a doubt to have a Chinese citizen transfer your money out of China and into your home account for you. This is the cheapest method, as fewer fees are paid, and it is also the quickest method for sending large amounts of money home, as it can all be done in one single online transaction. In this scenario though it’s important that the Chinese individual helping you is completely comfortable in doing so, and is someone you know and trust!
The next best method is to send your money home via bank transfer. Although the fees can be expensive, this method is secure and reliable. One thing that you need to ensure when teaching English in China, is that your employment contract is legitimate, and the correct tax is paid on your salary. Having proof of this will make sending money home via bank transfer possible, and will make getting your money out of China easier in general!