International money transfers
Money transfers – choosing the wrong option for a currency exchange can be costly, so it’s good to be aware of the options.
Transferring money between banks accounts in any one country is generally easy these days, the days of the cheque and post or queuing in the bank are long gone.
But if you’re transferring to or from abroad using your bank they may make a high charge for the pleasure both in terms of a fixed/fee cost and the margin they add onto the currency conversion rate. There could also be a differential between online or going into a branch.
Another way is to use a specialist currency or FX broker.
Factors you need to take in account are; fees and exchange rates offered, which can vary between all providers.
Other factors are, the speed you need the money to arrive and if it’s regular transactions or a one off.
Be careful though – deposits held in a bank or building society are protected under EU law, with protection up to €100,000.
With other money transfer services, the rules are slightly different and make sure you use an FCA “authorised” company. Authorised is very different to the term “registered” which gives you no protection. Those that are simply registered, may offer lower rates so it’s your decision regarding the risk element.
You may also want to consider a forward exchange contract (FEC) to protect against (future) fluctuating exchange rates. For example if you’re paying for something in instalments. A property build is a good example of this.
Spot contract. This can be good for people who need to transfer (and buy) money quickly.
Stop loss order. Here you can protect your losses if the exchange rate movements work against you.
Regular payment plan. This plan is suitable for those making regular transfers where the exchange rate is fixed for a period, such as making mortgage payments.
Be careful for the scammers – here maybe it’s more about what you are moving your money into in the first place. For example a dodgy property or investment deal might end with your money being sent to a scam bank account.