Tag: fx

7 TOP TRADE SECRETS to help you save time and money when sending money abroad

If you are sending money overseas, getting more for your money when buying or selling currency is important. Currency expert Sarah Davie from Moneycorp has listed below some useful tips that will help you when making international money transfers – whether you are making a one-off payment for a property, making ongoing mortgage payments or even repatriating funds back to the UK.

Tip 1: Don’t use the Bank to make your transfer

Many people leave foreign exchange in the hands of their bank. This is a big mistake.

It’s not a widely known fact but it’s certainly a costly one; currency exchange is one of the easiest ways for the bank to pick your pocket; and for larger transactions the losses can amount to hundreds, even thousands of pounds.

A specialist broker is much better placed to help you achieve a better rate of exchange when making a currency transfer. Although they trade currency in exactly the same way as a bank, as they solely deal with foreign currency and operate with reduced overheads they will be able to help you achieve much more for your money.

Another benefit is that the banks can charge up to £30 per transfer, foreign exchange brokers tend to offer a much lower transfer fee or in some cases no transfer fee at all.

Tip 2: Bigger Savings with Bigger Transfers

Typically, the larger the transfer, the bigger the saving; so if you are buying or selling a property abroad or you need to make a large overseas payment for any reason you are more than likely to benefit from a better exchange rate.

That said, you are still likely to see a considerable saving when making transfers with a specialist broker if you are exchanging a few thousand pounds or more.

Tip 3: Lower Fees with Regular Transfers

By setting up a regular payment plan for your regular payments, a foreign exchange specialist can work with you to ensure you make a saving every step of the way.  They will collect your GBP/Sterling via Direct Debit and then automatically send the foreign currency abroad.  The transfer fees can be as low as £0-£4 (in comparison to the typical £25 charged by the banks) per transfer – which makes a noticeable difference when considering monthly mortgage payments or pension transfers. Here is a recent bank comparison:

BANK

BROKER

Exchange rate*

1.1809

1.225

Amount sent in € per month

€ 1,000

€ 1,000

Amount you pay in £ per month

£846

£816

Saving in £ per month

£30

EXCHANGE RATE SAVING PER YEAR IN £

£360

Transfer fee per month (subject to bank and broker)

£25

£0

Possible receiving charges per month

£5

£0

Total Charges per year

£360

£0

CHARGES SAVING PER YEAR IN £

£360

TOTAL SAVING PER YEAR IN £

£720

*Exchange rate based on a bank comparison on 28/09/2012

Not only will a specialist be able to give you more flexibility than your bank, they have options that allow you to secure the price to protect you against adverse rate fluctuations and save you money. A specialist will be able to offer you 3 easy options for transferring your regular payments:

Option 1
Fix the Sterling amount and the amount of foreign currency you will receive will vary according to the exchange rate at the time of transfer. This is great for pension transfers.

Option 2
Fix the foreign currency amount and you will know how much foreign currency will arrive in your overseas account every time. This is great for mortgage payments.

Option 3
Fix both and you know exactly how much sterling will leave your account and how much foreign currency will arrive in your overseas account. This option fixes the rate; securing the cost of your payments over a set period.

Tip 4: Overseas Banks May Charge Extra

You will need to be aware that some overseas banks may charge you a handling fee of up to 1% of the value of the transfer.  This can add up depending on the regularity that you send money overseas.

You can however negotiate this issue with the receiving bank prior to transferring your money to try and minimise costs. You can also speak to a foreign exchange currency specialist to discuss possible options/solutions they can offer you.

Tip 5: Click here for greater SAVINGS

It is often cheaper to send money overseas via online systems provided by brokers as the costs are generally reduced.

The process is straight forward – you literally select the desired currency rate and then enter the amount you wish to transfer.  Payment can be made with a UK Debit card or a bank transfer; you then complete the deal by entering the beneficiary bank details for complete independence.

Tip 6: Don’t leave your transfers to the last minute

The longer you have to arrange your currency transfer, the more flexibility you will have to en­sure you get the best deal.

Although your broker will be able to offer you a same day transfer, the longer you have to manage your exposure the more options are available to you for example:

Forward contract
This allows you to fix an exchange rate today for a future date. Forward contracts can help protect against adverse currency movements and can be used to lock into favourable exchange rate with a 10% deposit up to 2 years in advance.

Limit Orders
You can specify a higher price at which you would like to trade at, if the market moves to this level your order will be fulfilled automatically.

Stop Loss Orders
Set a minimum level at which you would be happy to buy/sell your currency. Your order will be fulfilled automatically if this rate is reached in the markets. Ultimately, your worst-case-rate is being protected should the market move against you.

Tip 7: Get “FREE” Expert Advice

As exchange rates are continuously changing. It is important to discuss your requirements with a currency specialist; they will offer free expert guidance and be able to help you through the money transfer process step by step.

There are various options available to you, so it’s important to plan ahead. One of the main benefits of using a currency specialist over a high street bank is that the expert guidance and personal service you receive comes at no additional cost, so you are able to discuss your situation over a long period of time before you transfer your money.

This will give you much more control over your money and give you confidence that you have made your transfer at the right time and, therefore, at the right exchange rate.

[This article was provided by Sarah Davie of Moneycorp.]

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