In the current economic climate, finding the best foreign exchange is more crucial than ever. With exchange rates regularly fluctuating, it can be hard to know where to even begin when sending your money abroad.
However it is important to note that we are not talking about holiday money, or travel cash. In this article we are tackling the topic of sending regular sums (such as paying tuition fees or salary repatriation) or one off large transfers (such as buying holiday property).
Consumers should first cut through any nonsense about “no fees” or “no commission”. Your key question should be: “After all the charges, how many euros/yen/dollars etc will I get for X pounds?” To do this, check how much you are offered against the mid-market “interbank rate”.
Now, you may wonder, what exactly is that? You may notice that often there is a ‘buy rate’ and a ‘sell rate’ for currencies when you visit a currency exchange. This is the rate at which the banks will allow you to buy or sell the currency of your choice (with a margin). A mid-market rate is the midpoint between the buy and sell rate of two currencies. This rate is used so that the rate is not weighted towards a buying or selling.
Consumers, or even most companies are not able to get this rate. Essentially this is the market price, and is often used as a reference. You can check the live interbank rate on XE.com. Most currency brokers, would offer you a rate that includes a small margin over this rate. You can be reasonably certain that the deal offered by your high street bank will be pretty lousy, unless you are a “premier” type customer transferring very large sums.
Almost all major banks charge substantially for transferring money overseas, and offer a dreadful exchange rate to boot. The good news is that a number of alternatives offer you much better value.
Currency experts, such as Currency UK, can help you ensure you are making the most out of your currency transfers. We recommend checking out a company’s Trustpilot reviews, as well as if they have any awards to their name. If you are transferring over £5000, most FX providers won’t charge a fee.
Since currency is all they do, it’s highly likely that these providers would be able to provide you with a better exchange rate than your bank. They usually have money in the recipient’s bank within the same or following day, but can also set up regular payments.
What information do I need to make an international payment?
- the recipient’s full name and address
- the recipient’s IBAN (International Bank Account Number) or account number
- the name and address of the recipient’s bank – including the BIC* (Banking Identifier Code) / SWIFT code / clearing code
- the amount you want to transfer
What will making an international payment cost?
There are typically two types of cost when transferring money abroad – banking fees and exchange rates differences.
Usually you are charged a fee for international payments and these will differ according to the service used and the bank or building society that is providing the service.
There may also be fees charged by any agent banks involved in the payment transmission before a payment reaches its final destination account.
If you’re sending payments overseas and the recipient’s account is in a foreign currency, you’ll need to consider exchange rates for the currency conversion. This will affect what is received by the recipient.
If you’d like to speak to us, about how we can help you transfer money overseas, call our office, or alternatively book a free 15-minute consultation with one of our currency experts.