How to transfer money from Singapore to Malaysia: 3 best remittance services

Singapore - Malaysia money transfers have always been a sore sticking point for me. You see, my father lives and works in Malaysia, and sending money to either of us was always met with exorbitant bank fees.

Those fees were a real pain during my university days — not only was I a broke uni student, but I was also doubly penalised when my father was going to send me money. $20 telegraphic transfer fees just to wire $250 for the month? What a ripoff!

These days, there are a lot more options if you want to transfer money from Singapore to Malaysia, or vice versa. You can choose from remittance services like Wise (formerly TransferWise), Singtel Dash and InstaRem, which give us a welcome break from the exorbitant fees traditionally charged by banks.

This would prove very handy for the Malaysian expats who are stuck here in Singapore for work due to Covid-19, and want to send money to their families at home.

Which remittance services allow money transfers from Singapore to Malaysia?

Here’s a summary of the more competitive remittance services, along with the 3 cheapest bank remittance rates I found.

1. BigPay — cheapest way to transfer money from Singapore to Malaysia

BigPay is a relative newcomer to the Singapore market, but its arrival should be hailed. Regardless of the amount you send, BigPay will only charge you $1 for transfers between Singaporean and Malaysian bank accounts.

If the person you’re sending to is also a BigPay user, transfers are free, but the downside is that they can’t withdraw those funds into their bank account. However, they can use the funds in that account with their BigPay Visa debit card and earn BigPoints to use for rewards.

ALSO READ: 5 best money remittance services in Singapore

However, there is a limit on how much you can send each day, month and year — it’s $5,000 daily, $10,000 monthly and $30,000 yearly. There’s also the MAS regulation that limits the amount that can be held in any e-wallet at $5,000 at any given time.

The limit does not really matter if you’re sending just a few hundreds to your loved ones every month, and there’s the added benefit of BigPay being a localised Malaysian company with same-day or 1-day transfer to Malaysian banks.

2. Wise (formerly TransferWise) — easiest & best for large transfers

Despite having a dynamic fee structure for using its remittance service, Wise — formerly known as TransferWise — is hands-down the easiest Singapore-Malaysia remittance service to use.

This is because of Wise’s PayNow integration (which BigPay lacks). You can simply input your PayNow details and start transferring money that way. It’s even easier if you’re the receiver, the sender simply needs to input your Singapore mobile phone number or IC number and you’ll receive it in your bank account!

Wise also offers large remittance transactions, you can send up to RM975,000 (S$315,000) per transaction. How many transactions you can make of that amount is subject to Wise’s discretion — for each large transaction, they will ask you for your bank statements and other related documents as to how you got that money in the first place. 

ALSO READ: GrabPay wallet update: You can now make transfers to your bank account. Here's everything to know

You are also unable to hold a large amount of Singapore Dollars in the Wise e-wallet because of MAS regulations (only $5,000), which puts a stopper on those who want to transfer at a later date to take advantage of better rates.

It will also take up to two days for your money to be transferred — which is particularly agonising for anyone sending and receiving that amount of money.

3. CIMB — best for transferring to Malaysian bank account

Many banks charge exorbitant fees for remittance. But CIMB is on the list is because they offer a cheap way to transfer funds to Malaysia.

You need to sign up for the CIMB FastSaver Account (which gives you 0.3 per cent p.a. interest rates, a low entry barrier of only $1,000 for an initial deposit and no minimum balance to maintain). With this account, you can link a Malaysian CIMB account for you to remit funds across Singapore and Malaysia.

Remittance between the two linked accounts are free and instant, but the linkage takes 3 working days to process.

OCBC also has something similar, but the exchange rates and transfer times aren’t as competitive as CIMB’s. OCBC is also not that common in Malaysia — you’d also be hard-pressed to find OCBC ATMs there. So it loses out to CIMB, which is one of the biggest banks in Malaysia and has ATMs everywhere.

If you don’t mind taking the extra step to open a bank account for remittance, CIMB is worth considering. You can open an account easily online.

What to look out for when choosing a remittance service

Remittance — sending money to another person overseas — isn’t a new concept. But since more expats are stuck overseas and want to send money home to their families, the size of the remittance market is expanding year after year.

In the past, you could only remit via a bank or a service like Western Union. But these days, there are tons of digital remittance providers like Wise and BigPay to choose from.

Here are some things to look out for when checking out providers.

• Transfer fee: Banks generally charge at least $10 per transfer, so they only make ¢ent$ when you’re sending large amounts of money. With players like BigPay and Wise charging as little as $1 per transfer, there’s not much reason to pay so much more for the same service.
• Exchange rate: While some providers advertise low transfer fees, their exchange rates might not be favourable. It’s another hair to split, but it’s worth spending a few minutes to check the rates before you send.
• Processing time: Some providers — especially banks — take three days or longer for money to be transferred and reflected in the recipient’s bank account. This long wait can be nerve-wracking.
• Fraud risk: With so many new providers on the market, trying out a new service can be risky. Who knows if your money might vanish into thin air during the transfer?

Digital remittance service providers have stepped it up and have addressed most of these concerns. For Singapore-Malaysia remittance, most of them offer same-day (or at most, one-day service) and charge low rates.

However, security is still a concern, especially when this is not something customers can discern easily unless they learn the hard way. 

ALSO READ: Understanding balance transfers: How much can you really save in interest?

This article was first published in MoneySmart.