Transferring money abroad is something most of us will do at some point in our lives, whether you’re holidaying abroad, buying property overseas, retired expats, parents sending money to children on their travels, foreign workers in the UK sending money home to their families or UK based workers on foreign contracts, who are not paid in sterling. Whatever your situation, there is something everyone who transfers money abroad has in common: paying fees. It can be difficult to transfer money abroad without incurring hefty bank fees or coming up against poor exchange rates. Here we’ll give you all the information you’ll need to make sure you get yourself the best deals whatever your circumstances.
Transfers abroad of £3,000 or more
For payments over £3,000, it may be worth using a specialist currency broker. They don’t normally handle small transactions, but on bigger payments they often have low or no fees and offer a competitive exchange rate. They can help you manage regular payments abroad and many provide travel money, delivered to your door by post.
Buy currency when the price is in your favour
Will Collins, Head of Private Client Dealing at Baydonhill recommends using a specialist foreign exchange provider who, ‘will be able to offer you a ‘rate alert’ facility, whereby they monitor the exchange rate on your behalf and contact you when the price is in your favour. Owing to the fact that there can be dramatic changes in the rate between currencies from month to month, you may wish to take advantage of either a forward contract or market order to ensure that you have your price reserved or guaranteed for your entire purchase.’
Fix the exchange rate for up to two years to secure the cost of currency for when you need it
Will further explains that, ‘Forward contracts allow you to fix that day’s exchange rate up until the time when you are going to need the funds. This is the most secure way of budgeting for the cost of your currency.’ A market order works by you instructing your currency dealer to proceed to purchase a set amount of currency for you if a certain exchange rate becomes available. According to Will, ‘This is particularly useful if you are not able to take the time to monitor the exchange rate daily, as the deal can be done on your behalf automatically if your target level becomes available.’
Shop around and stay informed
For those of you who aren’t sending regular payments abroad and aren’t expats, you might want to spend a bit of time shopping around for the best exchange rates and bank accounts to use. Here are some tips on how to do this:
Find out exactly what your bank would charge you for transferring money abroad. Make sure you understand exactly what fees you will be charged and what their exchange rate is.
Compare what your bank is offering with its competitors and see if you can find a better deal.
Don’t fall for ‘zero commission’ claims from your bank. There will often be other fees and poor exchange rates that mean you’re not getting a good deal.
Look at new companies that specialise in transferring money abroad. Compared to banks, many are offering very competitive rates.
Use comparison sites to check for the best exchange rates available.
Check with companies how long it will take for them to transfer your money abroad. Sometimes it may be worth paying more to have a quicker transfer, depending on your priorities.
With the tips above you should now be able to go out and find a competitive rate for sending your money abroad. The option that’s right for you really depends on your situation, the amount you want to transfer, when and how much. There are huge savings to be made when you choose wisely, so some research now, into the options open to you, could save you hundreds or even thousands of pounds in the long run.