In the UK, there are a few hundred specialist foreign currency brokers who offer their service to both individuals and businesses trading internationally. With the huge growth in Brits buying second homes abroad and emigration levels at an all time high, more and more specialist foreign exchange companies like are entering the market. Businesses also increasingly need to pay suppliers abroad. With the banks seemingly offering uncompetitive exchange rates, being able to save up to 5% on large money transfers can lead to significant real money savings. This is where currency brokers fill a void in what was a very expensive personal finance service.
Price: Better-than-bank exchange rates
As foreign currency brokers trade in huge volumes daily and buy from the live market, they are able to offer tight ‘markups’ off the real rate of exchange. All banks and foreign exchange companies make money the same way. How? By adding a ‘markup’ to the interbank rate of exchange. On a medium size account, you could expect to be saving anywhere between 2-5% by using a currency broker as opposed to a bank whose spreads are considerable and often only set their rate once a day. The general rule of thumb is the more you are looking to transfer, the tighter the markup. FX (foreign exchange) companies will often have a minimum international money transfer amount of £2000 and above.
On a £100,000 property purchase that needs to be converted into Euros, expect to save anywhere between £2-5000 by using a non-bank foreign exchange broker. The account opening process is normally online, free, and takes around 10 minutes to complete.
Top Tip: Open a live account to get an accurate & live exchange rate quote. Pre account opening, you will only be quoted an indication rate.
Service: Private banking style service
Most reputable, FCA authorised foreign exchange companies like MyCurrencyTransfer.com offer a personalized, private banking style service. In other words, the level of service and currency contracts you will likely receive from top tier currency broker is comparable to what large companies trading in the hundreds of millions would likely get from their bank.
When you transfer money abroad, this facility can be very useful in deciding the best time to transact. Most currency brokers will allocate you a dedicated dealer who will watch the market on your behalf and help execute you transaction at optimal timing.
Top tip
It’s worth asking about: forward contracts (buy now, pay later), rate watch, limit orders and stop losses (watch the market on your behalf and execute transaction if a rate hits a certain level)
It’s certainly wise to hunt around for the best deal and compare money transfer services. If you are comparing ‘apples with apples’ make sure to take into account both transfer fees and exchange rates.
Above a certain amount, most foreign exchange companies will waive any fixed transfer fees and factor in their cost into the exchange rate
For a live comparison of the best money transfer deals, visit MyCurrencyTransfer.com