Steps alone

Foreign Exchange Explained — FAQ

Should I be using a Foreign Currency Specialist?

Many individuals and private clients use the services of a bank without knowledge that FCA regulated foreign currency specialists exist. If you are buying property overseas, paying suppliers, importing goods, paying overseas tuition fees, emigrating or simply making a one-off international payment, it certainly pays to get in touch with a currency specialist who can maximise the value of your overseas money transfers. As foreign exchange is the core focus of currency specialists, they buy currency in bulk and can obtain wholesale rates, with these savings passed on to customers.

Why is it cheaper to use a Foreign Currency Specialist rather than a bank?

Given that foreign currency specialists are buying currency in bulk and working with live rates, they can get far closer to the interbank rate than banks, thereby saving clients between 1-5 % per transaction. Remember, customers get hit with ‘two’ fees: the exchange rate (hidden fee) and the transfer fee. Furthermore, banks also charge substantial transfer fees of between £10 - £25 every time you transfer money overseas. If you are making multiple transfers per year this can become a very expensive method of transfer. On the other hand, foreign currency specialists will not charge a fee on your overseas currency transfer, providing you are sending above a certain minimum amount.

What is the ‘Interbank’ Rate?

The interbank rate is the one you will most likely see in the media, on the news and on various currency converters you might come across. This is the rate banks buy and sell currency to eachother. Foreign Currency Specialists will offer highly competitive exchange rates which are extremely close to the ‘interbank’ rate. Banks on the other hand will generate healthy profits on FX by charging high fees and applying a significant margin off the interbank rate. The difference between the interbank rate and the customer rate (i.e. the margin) is how foreign exchange providers make their money.

How much can I typically save using a Foreign Currency Specialist?

Whether you are sending £500 or £5,000,000, it pays to speak with a foreign exchange specialist who can typically save private and business customers between 1-5% per transaction. As our panel of top tier currency specialists are transacting billions in FX per annum (for individual and corporate FX), the margins they take per trade are very tight and pass the savings onto customers. Currency brokers work off a high turnover and low margin principle.

How important is it to select a foreign exchange broker that is FCA (previously FSA) regulated?

It is absolutely essential that your funds are safe and you send money overseas through an FCA authorised currency specialist. At MyCurrencyTransfer.com we carefully vet all providers you see in the comparison tables have full authorisation and regulation by the FCA under the Payment Services Regulations 2009. All companies listed on our site have been checked by FCA and you can find out more information via the FCA's Money Made Clear site. In addition, all currency specialists listed on MyCurrencyTransfer.com are authorised and regulated by HMRC.

Is my money as safe using a currency specialist over a high street bank?

Absolutely. Authorised FCA regulated currency specialists need to safeguard client funds through segregated client accounts and maintain a defined level of capital or ‘own funds’. All funds are deposited in Client Accounts which are segregated from the company business accounts for the sole purpose of exchange and onward transfer of payments. The accounts are all held by UK banks such as HSBC, Barclays, RBS to ensure protection and security of the funds you wish to transfer overseas. Still confused? Check our video on 'Is my foreign exchange company safe and secure?'

I am about to purchase overseas property and read a lot about the benefits of forward contracts, what does this mean?

A forward contract simply means that you can order your foreign currency now, and pay for it later. For example, if you wish to buy £50,000 worth of US Dollars, but do not need to send them for 6 months, you can agree the exchange rate now (perhaps you think the exchange rate is great at the moment), place a small deposit, and pay the remaining balance in 6 months time. This provides excellent protection for individuals and businesses against adverse currency fluctuations in the future. Forward Contracts can be secured for up to 18 months in advance and you can speak to our panel of currency specialists for more information. Still confused? Check our video on 'What is a forward contract?'

Could you explain the difference between an indicative rate a broker will give me and the final dealing rate?

This is a very important point. Once you have opened an account with a foreign currency specialist they will be able to quote you a live dealing rate which will enable you to book a currency transfer. It is free to open an account and you have no obligation to trade through the currency specialist that you have opened the account with. However, without an account opened you will only be quoted an indicative rate. Most companies when quoting indicative rates will give quotes that are either unrealistic or merely the ‘interbank rate’ which will be an unobtainable final dealing rate. Thus, it is extremely important to open an account.

What is a spot contract? I need to transfer money overseas immediately and hear this is my best bet?

If speed is a priority and you need to transfer money fast at the best exchange rates, spot contracts is the right option. Once you verbally or online agree a rate with your chosen currency specialist, your currency can be transferred as soon as you have paid for the contract.

Does it cost me money to set up an account?

It is absolutely free to open an account with any foreign currency specialists and you are not obligated to trade once the account is open. Opening an account should take no longer than 24 hours subject to KYC compliance checks, often only a couple of hours. However, if you want to access a final dealing rate rather than an indicative rate (quoted when you call up a broker without an account opened) it is required to have an account.

How can a currency specialist offer me a rate with no associated ‘commission?’

As long as you are transferring money overseas above a certain amount, the foreign currency specialist you deal with should not charge any commission. However, one should always be careful when they see ‘free commission’ or ‘zero commission.’ The difference between the commercial rate (where brokers buy currency) and the rate at which they sell you currency is the ‘commission’ the foreign exchange brokers are making. At MyCurrencyTransfer, we work with the most competitive currency specialists in the market who are buying currency in bulk (work off high volume) and sell on at a very small margin (extremely tight spreads).

How long do currency transfers take to arrive at my beneficiary?

Foreign Exchange Specialists can get your funds to the chosen beneficiary typically a lot faster than using a high street bank. Once you have agreed a rate with your foreign currency specialist either online or over the phone and funds have cleared into the currency broker’s client account, the funds are exchanged and forwarded to the stipulated beneficiary account. All transfers are sent out the day funds are received Most specialists on MyCurrencyTransfer.com are members of SWIFT (Society for World-Wide Interbank Financial Telecommunications) which acts as the platform for instant wiring of domestic plus international money transfers. As the world’s largest payment and settlements network, this greatly assists with the speed, efficiency and security of your overseas currency transfers. If you still have questions watch our video on 'How long does it take to make a money transfer with a broker?'

What is the minimum and maximum amount I can transfer?

Foreign currency specialists will typically handle any transfer above £500 and do not have a maximum amount you can transfer. Amounts below a currency broker’s minimum level of transfer may be subject to transfer costs

Will I be assigned a dedicated currency dealer?

MyCurrencyTransfer.com has ensured that all customers who open an account through the site will be assigned a dedicated currency dealer. This is particularly advantageous to individual and corporate clients who need to make multiple payments over time. Unlike the often depersonalised nature of dealing with the banks, you want to be dealing with the same person from start to finish when sending money overseas.

Can the foreign currency specialist watch the markets on my behalf?

Absolutely. As an individual or corporate client, you can build a key rapport and understanding with your dedicated currency dealer who can watch the markets on your behalf and provide a first class service tailored to your individual foreign exchange requirements. By strategically allowing an expert to manage your currency exposure, your dedicated currency dealer will assist in getting you the best exchange rates, executed at the right times. Where appropriate, they can also introduce you to certain currency contracts (forward, limit order, stop losses) that can really maximise the value of your currency transfers.

As an example, the Sterling – Euro exchange rate has fluctuated up and down between €1.5279 and €1.4066 in the space of 12 months. On a €300,000 money transfer to purchase property, this equates to a potential loss of £16,900. Not having an expert on board to watch the market on your behalf could be a tremendously costly error!

Can you tell me the best time to transfer my money overseas?

If my priorities are not immediate for sending money overseas, can I wait for the best rate? Currency fluctuations mean exchange rates change on a second by second basis. Whilst it is impossible for any broker to categorically say the ‘best’ time for transferring money overseas, it is worthwhile to have currency experts at your disposal that can watch the markets on your behalf and mitigate against adverse currency fluctuations. You can also instruct your dedicated currency broker to telephone/ e-mail you as soon as the rates changed to your optimal level. Most brokers on our ‘panel’ will also enable you to place an order which will automatically trigger once your desired rate

What currencies do your panel of foreign currency specialists deal with?

MyCurrencyTransfer.com has partnered up with first rate foreign currency specialists who can handle all the major and most minor currencies. Whether you are sending money to Spain, France, Portugal, USA, Canada, Australia, New Zealand or over 150 other countries, we are sure to have a deal that is right for your individual and business foreign exchange requirements.

How do I purchase my currency?

Once you have opened your account and set up a trading facility, you can agree a rate with your dedicated currency broker via telephone or if you find it more convenient, online (check which currency specialist allow you to utilise an online platform). Please note that once you agree a rate this represents a verbal binding agreement with your currency specialist to purchase currency at the agreed rate, and you will need to transfer funds into their segregated client account.