Currency conversion. Are you getting the best deal?
March 9, 2019
By Jessica Cook
Whether you are comfortably settled as an expatriate in Dubai, just about to make the big move to the land of sand, or perhaps thinking of repatriating home, making and receiving international payments can often be a laborious task.
For many, international money transfers not dealt with efficiently through poor exchange rates and high transaction fees will cost you a hefty sum.
Getting the best rate for your currency can make a huge difference and in the majority of cases these losses are almost entirely unnecessary. With the right planning and due diligence, they can be avoided.
For a start, it will do you good to bear in mind that not all banks and foreign exchange brokers are created equal, providing opportunities for the savvy expatriate to minimize FX fees and even secure preferential exchange rates months in advance.
Timing is absolutely crucial -It’s important to choose the right time to convert your money. Exchange rates move all of the time and this will have a great impact on how much currency you end up with. Movements play a big role in transfers and that’s where a specialist currency broker can help.
A currency expert such as currencies4you or IFX will be able to give you guidance on the markets and help watch the movements in the exchange rate. They can even set up market orders where you can define the desired rate you want to achieve. Some currency specialists also offer forward contracts where you can lock into a rate for up to 2 years.
A word of caution to all – As a general rule of thumb it is the banks that usually have the highest fees and worst exchange rates. Using a high street bank may seem like the easy option, but using a specialist foreign exchange company is just as easy and usually works out much cheaper. Changes in the foreign exchange market occur every minute of every day. Unlike banks, foreign exchange currency companies deal with live exchange rates allowing them to get much closer to the interbank rate.
On average, mystery shops undertaken in the media show that the high street banks charge up to 4% more to exchange your money.
There are also likely to be additional bank charges, which can include commission fees of up to 2% of the amount your transferring, as well as possible transfer charges. Most currency specialists will transfer your money abroad completely free of charge.
Making regular payments – The difficulty arises when trying to budget your expenses with fluctuating exchange rates. It can be an impossible task. As an expat you may need to make regular money transfers back home, for example if you own a property and need to repay your mortgage in your home currency. Currency specialists will allow you to lock into favourable exchange rates protecting your money from adverse currency movements.
Making the most of your money – Fluctuating currency rates can seriously affect your wealth. Whichever country you’re living in, the advice is simple. Shop around. You financial adviser will also be able to help get you the best rates possible and often can secure a preferential rate for you. Finding the best and cheapest way of transferring money is extremely important especially in today’s economic climate where it’s more important than ever to make the most of your money.
Exchange rate movements impact returns when a change in the value of one currency against another currency leads to a rise or fall in the value of an asset. [...]
Published On: March 2, 2021|4.5 min read|
Investing and Home Country Bias
Home country bias happens when investors are over-exposed to domestic equities in their investment portfolio. Home country bias refers to investors' tendency to favor companies from their own country [...]
Published On: September 3, 2020|4 min read|
Goldilocks & the Bulls & Bears…. Is the Stock Market Just Right?
Who would have predicted the stock market rising to record highs, in the middle of a recession, with US double-digit unemployment? At the close of March 2020, Warren Buffets Berkshire [...]
Get our latest financial blogs and articles straight to you inbox.
In partnership with
AES Financial Services Ltd which is Authorised and Regulated by the Financial Conduct Authority under registration number 464494. You can check this on the Financial Services Register at http://register.fca.org.uk. AES Financial Services Ltd (“AESFSL”), trading as AES International, is registered in England no. 06063185, its registered office being at 7 Bell Yard, London, WC2A 2JR