Whether you’re new to sending money abroad, or a seasoned expat experienced with interbank transfers, it’s always beneficial to choose a smart method of transferring money. Similar to other financial services, there are ways you might both lose or gain value in your currency exchangings.
It’s crucial to recognize that free money transfers are virtually non-existent. The costs associated with such services are inescapable, as banks and money transfer firms must sustain a profit for operational continuity. However, understanding how these profits are made can safeguard you from excessive charges.
Don’t fall for ‘0% Offers’ or ‘Free Transfer’ enticements. Many money transfer companies use these as marketing tactics, luring you in with appealing offers but compensating with unfavorable exchange rates.
Instead, investing time in locating a reliable non-bank currency exchange expert that offers nearly interbank rates is an advisable move. These interbank rates, reflecting real-time currency market values, are in constant fluctuation and can be considered the ‘true’ exchange rate.
An authorized financial conduct authority (FCA) money transfer expert can offer competitive rates, expert advice, and clarity on charges. They would also facilitate access to currency-related contracts like forward contracts, which guarantee additional savings.
Consider locking in your exchange rate through a forward contract. This enables you to fix your exchange rate for up to a year in advance, assuring your regular transactions align with your budget. This is a valuable option if your currency experiences dramatic weekly fluctuations. You can typically fix your rate for up to 12 months, with just a 10% deposit.
Remember, money-saving is pertinent to all financial transactions. Unfortunately, currency transfers often suffer from hidden costs. The realm of foreign exchange is notorious for its lack of transparency, making it difficult for customers to determine their actual costs due to the inherent confusion surrounding exchange rate designs.
The silver lining is that partnering with an authorized FCA money transfer expert can potentially save you considerable amounts. In fact, you could save up to 5% per transaction versus the traditional banking approach. To put this into perspective, a transfer of £100,000 could yield savings of up to £5,000. Unlike banks which set their exchange rates only once or twice a day, currency brokers interact with live markets, accessing real-time, wholesale exchange rates.
