When making cross-currency payments, you have three options: a bank, an online trading platform, or a currency broker.
Direct bank payments are often the most expensive way to move money internationally. On one hand, it might feel easier to simply stick with your bank. On the other hand, there are often fees and the exchange rate is usually poorer, which means you are too. For example, when selling a property abroad, if you ask the overseas solicitor to transfer the funds directly to your UK account, the conversion is likely to be done by their bank, which means you have no control over the exchange rate. On average, a high street bank can charge between 2% and 4% of the amount transferred.
Online currency transfer platforms typically offer better exchange rates, which means your money goes that little bit further. However, it’s unlikely that you will get the cheapest currency transfer possible: because online trading platforms operate a fixed spread, once your payment or transfer edges beyond a few hundred euros, you’re likely to see a dramatic decline in value for money.
Currency brokers have access to the same wholesale exchange rates as banks but they work on lower overheads, which is why they can offer you much better rates and no transfer fee, no matter the amount or currency. As well as saving you money, a broker will be able to provide you with in-depth knowledge of the currency market and its trends, and offer a more strategic approach to currency transfers. This could include tools like forward contracts, which let you fix a rate now for payment at a future date. Having your own dedicated account manager is particularly important when currency rates are volatile, as they are now.
For complete peace of mind, make sure you pick a broker that is authorised by the Financial Conduct Authority, you can check this on the FCA register (www.fca.org.uk). This means that your funds should be safeguarded when conducting an FX transaction.