The Best Ways To Do International Money Transfers
Opting for a foreign currency or exchange broker can help you send money overseas with the best rate possible. Many of them charge little to no fees, with a much better exchange rate than that of your high street bank. Let’s take a look at how they work for you.
We’ll start with an example: you want to send 10,000 Euros from the UK to France for the deposit on a property purchase in the country. Your bank’s service is going to be expensive and the charges for a money transfer firm are extortionate. It’s time to look at a foreign exchange broker instead.
Start With an Account
Before you use any broker, you will need an account with that broker firm. The dealer can then get in touch to talk about your transfer needs, including the costs and current exchange rate. Once you’re happy with that, you can give all the information to the recipient and pay the full amount. Most payments will be completed directly from your UK bank account.
When your broker account gets the funds, they’re automatically transferred to the recipient. The process will take a day or two, depending on the currency and the country. It can take less than 24 hours for the more popular US dollars and Euros.
Check the Exchange Rates
You will usually find that transferring £3,000 or more will mean no fees and better exchange rates. The rates will be far better than a high-street bank. Sending the 10,000 Euros with a broker can mean you sending £8,410 instead of the £8,850 your bank wants to charge!
Banks usually have a fee as much as £40 involved when transferring between currencies. You’re losing out on £450-£500 just by not choosing a currency broker!
Different Types of Transfers
There are other benefits from the broker when it comes to the movement in exchange rates. You usually get the choice of three different transfer types, so you can find one that better suits your needs. The spot deal involves choosing the current rate and is the most straightforward and popular option. You send the funds immediately and take that day’s exchange rate.
Opt for a Forward Contract
The next option is to do a “forward” contract. This allows you to take the day’s rate but the transfer is set for a date sometime in the future. This is excellent for those who fear the exchange rate will get worse in the future, but want to start the process right now. Currencies are volatile and you may find the opposite happens—the exchange rate changes to one better in your favour.
Using a Deposit for Your Exchange
Since the forward contract uses the current rate but not the current day, there will be other terms needed to secure the transfer. A broker should go through all the terms and conditions, but do ask questions if you have any. You should never have to put the full amount down. Most brokers will ask for a deposit on the day and then the rest due on the transfer date.
Limiting Your Orders
Another option is to limit your orders, so you can play around with the currency markets. You can limit the amount that you want to send, nominate the exchange rate that you would prefer, and then allow the broker to take control. The broker will automatically buy the new currency once your rate is reached.
This type of transfer doesn’t work for small amounts. Some brokers have a minimum of £30,000 to make it beneficial.
Set Up Regular Payments
It is possible to send regular payments to somebody overseas. This can help pay off school fees, mortgages, or other regular payments. You will usually need to send £500 or more for this.
Check Your Broker Is Authorised
The Financial Conduct Authority will regulate and authorise some brokers. Make sure any broker you choose is regulated. This will ensure that the firm operates within the guidelines set by the FCA, and you will have access to the Financial Services Compensation Scheme. If something goes wrong, you will get your money back.
Because the cost of currency exchanges differ between brokers, you need to compare your options. Finance.co.uk compares brokers completely free and independently, so you can find the best deals within minutes. We’ll search all the major brokers to help you get the most for your money.