Sending Money Overseas article discussion



  • Mich13
    Mich13 Forumite Posts: 1 Newbie
    Hi everyone,

    I'm completely new to this AND was happily unaware of how difficult it would be to send some money abroad - unreal! My question is this... what's wrong with sending a cheque in the post OR sending via the post one of these travel money cards and then just topping it up on-line once my relative has used up the money? It's just going to be small amounts... isn't that much easier?
  • Hello, As you can tell from my name, I work for a foreign currency exchange company, this isn’t for the intention of advertising, but to give genuine inside information. I am going to give you a transparent Insight into the industry, which is a very competitive industry indeed.

    I am actually writing a post because it does seem so many people are confused with how, where AND when individuals (and companies) can actually get the unbeatable rates, security, and avoiding fees and charges. Im am talking about transfers from account - account, for example £ account - $ account, Regular small international transfers up to large purchases

    Transfer Fee - Banks and some brokers charge same day, TT (telegraphic transfers), CHAPS, unless a BACS payment - 2-3 days free of charge. Banks will charge £15 - £50 a time with 2-3 day international transfers, whilst Brokers can charge £10 TT. However some brokers do not charge the client the fees, they will take it out of their profit, no matter how small the transfer. You can find by you using online or telephone banking, funds will move in a matter of minutes up to 3 hrs via Fast Payment system from UK bank - UK bank, subject to the bank providing FPS and is free of charge. Finding out your daily limit and each transfer limit will benefit you.

    Commission - In my personal opinion, in these days charging commission is over charging because banks and brokers make enough profit just by doing the transfer, taking what rate they buy it and sell it to the individual. Most people have caught on and the majority offer 0% commission, But please don’t fall into the trap that this is a special offer, it isnt at all special.

    Set Limits - This is a brokers preference, however, you won’t need to look real far for a broker who will not set limits, and still handle with no fees and charges, no matter how small or large the amount.

    How do banks/ brokers make money on a trade? - Banks buy and sell using interbank rates, which you can see on-the-spot rates on financial TV channels. Banks will take a set large profit margin, whilst brokers can vary their profit margin, but take a much tighter one. for example, if the Interbank rate for GBP-EUR is at 1.15. Banks will sell to individuals, on average 1.10-1.12, whist brokers will sell around 1.1450-1.13. Brokers will buy their currency from banks and tight spreads from banks at commercial wholesale rates, which can be around 0.002-0.005 off interbank.

    When to buy? - Banks won’t tell you, some brokers won’t tell you, but top brokers will guide you with data when it can be a good time to transfer. There are 2 times to trade, at the right time, or at the last minute, which can possibly be a difference of 2 points (a possible example during a matter of days = GBPUSD 1.67 at right time - 1.65 at last minute) on a £100,000 pound transfer, that is $2,000 difference. Make sure your broker cares about when is the right time to transfer. There is a fine line for giving advice though. FSA regulated brokers CAN advice you, non-FSA regulated brokers CANNOT advise you, however they can lay out what is happening in the markets and INTERPRET what will happen, but you make up our own decision.

    Financial products - Limit orders, stop losses, forward contracts, can be handy. Your broker will recommend them if they would benefit you. If you want to transfer currency at a later date but like the current rate, forward contracts are useful and 5-10% deposit is required and can last 2 years, depending on the broker. Limit orders and stop losses are used to reduce the risk of missing a target rate (limit order) and rate going below a certain point (stop losses). these two are commonly used if a vital transfer has to be done after the weekend. It is common for brokers to provide a rate alert or a limit order forward option, so when it hit a good rate, they will contact the client, then you have to option to complete the transfer or agree a forward contract.

    Security – A very important word in financial services sector. Due to recent turmoil in the banking system many brokers have changed bankers. 100% guaranteed safety and compensation of client funds is ideal. Banks such as Bank of Ireland are protected 100% by the Irish government. Always make sure the account the broker has is a segregated account to separate client funds. All money services Businesses should have a MSB number so you can verify them via HM Customs and Excise, and they will monitored by Serious Organised Crime Agency (SOCA) who work closely with FSA for the prevention of money laundering. So your broker, to open an account will ask for photocopies of ID and address verification as well as sign to agree their Ts and Cs. This would only take minutes on your side. Make sure you find out if their calls are monitored and recorded. You can even ask for the recording of the call to be sent on email to you, just for your peace of mind.

    I really people should ask around 2 or 3 different brokers for rates, If you have a rate that is better than the 2nd broker, saying so will only benefit you. It maybe a great idea to get into a Group Booking, but I have only heard of two other companies that provide them. Smaller fx brokers, don’t have the big marketing budgets and big expenses and I have only heard of three companies will actually write 'unbeatable' rates. This doesn’t meant to say smaller to better, because the 'big' fx companies can provide travel money, prepaid currency cards and pay on credit card for example. Some brokers don’t even work on a commission basis. I’m Not!

    Ashley Ingle
    Excel Currencies.
  • DC01
    DC01 Forumite Posts: 6 Forumite
    par wrote: »
    I am new to foreign currency exchange. I thought I was getting a quote but have ended up having a contract because I ticked the Terms & conditions box. I did not want to proceed and have ended up owing thousands of pounds. They said they would defer the date of transfer but I did not send a deposit and did not put anything in writing. I was told they had bought the currency and that I had agreed to it verbally . Now they have sold the currency as I have not paid a deposit and am not prepared to do so - they did this before they put me through to the compliance team to discuss. They said if I paid a deposit even though they had sold the currency, I could keep it at a fixed rate for 2 years. I had always said I was new to this and wasn't sure I wanted to proceed and didn't understand how it worked. They are going to send me tapes of conversations and give me 14 days to pay up. Do I have any chance of getting out of this?

    Ticking terms and conditions should only mean that you have registered with them to trade and agreed to their terms however if over the phone you agreed the contract quote (for them to execute the deal) you should have received a contract note which is the confirmation of the contract struck between you and your broker (what currency you bought and sold, how much, the value date and rate of exchange, any deposit required (if a forward) and balance date and bank details for you to send your funds to) - this can come by email or post. I suggest you get a copy of the tapes and listen to them carefully - you asking for a quote and agreeing to going ahead with the deal are two different things but if you are new can be difficult to differentiate. Verbal quotes agreed across the phone are binding if you accept them because iot turns from a quote to a deal!!

    Might be two late but going forward you need to make sure that the broker is aware that you are only interested in a rate to compare with other brokers (this usually makes them quote better prices) and only when you have compared quotes (dont forget to include rates and fees) then make the call to agree to buy/sell your currency.

    If this has put you off speaking to a broker- both fttcurrency and have "real" rate calculators on their websites which will give you a good idea where the market is that an individual can buy or sell at (most others calculators are useless as they quote indicitive interbank which you cant get unless your name is Barclays Bank!!). HiFX, CaxtonFX and have decent online systems which are easy to use and it is very apparent whether you are getting a quote or accepting/confirming the deal - difficult to make a mistake and no "dealer" in your ear pressurising you (ftt's system is very 1980's but I would only advise an advanced user using it) - best rates I get are from but this was only recently as they were on par/slightly worse previously. The good thing with HiFX, Caxton and are that their minimums are very low (down to £100 with Caxton, £250 with HiFX and no minimum with as some other brokers will only deal with you over £5000, so if like me you need to top up a foreign bank account these are great with good exrates - that said HiFX only allow you to call in for deals over that amount and advise you to go online for better rates.

    good luck with reviewing those tapes
  • DC01
    DC01 Forumite Posts: 6 Forumite
    Kallisti wrote: »
    I'm transferring quite a lot of cash to the states and thought I'd put in my $0.02 (ahem). The brokers typically seem to use either pips or percentage to work out how far off the inter-bank rate they'll give you. In order to get a real quote 'spot' rate, you have to have an account set up, but to be honest, this is dead easy - sometimes a form to fill in, sometimes an email of your passport and a utiltity bill.

    Once they've done that, call around and see what rates each is offering, and also what pips. Pips are the smallest unit the currency exchange can move at. For instance, £:$, a pip is $0.0001 eg, 100th of a cent.

    So far I've been quoted anywhere from 120pips (1.2c below the inter-bank rate) from Moneycorp and as good as 50pips by Foreign Currency Direct. HIFX came in the middle at about 80pips.

    When you're talking about small amounts, that's pretty trivial, but when talking about $100k, it works out at almost £300 difference on the transfer. Moral of the story, as ever, shop around. To me, pips seem to be a good way of sorting the wheat from the chaff, but the advice on the front page is important too, "After all fees and charges, how much X currency will I end up with?".

    Especially well hidden charges could include your bank charging to receive the deposit. My US account charges $15 for incoming international, no idea if this is going to count as one though!?

    Kallisti - really good tip - as you say whether its percentages or pips, fees/no fees, the acid test is how much money to you get/save when all is said and done and to shop around. Dont forget that your "client" money needs to be in segregated accounts to the brokers own money so if they go bust they dont take your cash with them.

    There are hundreds of brokers out there but regardless of whether they quote fees or not (and if they dont it is usually lost in a worse rate) they all have to make money by taking a spread between what they buy/sell from you and what they buy/sell from the wholesale market. Typically the bigger players like HiFX, Moneycorp etc like you mention above transact billions per year (according to their annual reports/marketing) and should get better rates and can pass that on (or some of it) - that said some of the electronic players lile Xoom,, and fttcurrency dont have dealers to pay and can offer better rates too.

    If you are new to this then use a broker with a reputation for service like HiFX, Moneycorp, Halo etc otherwise if you have done this a few times and happy with the mechanics then use one of the electronic guys like and if you do shop around (which, like Kallista I advise you to do) use currencyonlines calculator on their home page - it gives real updating rates every few seconds (with pipage/spread included so not interbank like others) and allows you to enter any competitive quote you have got to compare against and tells you whether you save or loose against them.

    I normally get three or four quotes and compare them manually - now I run them through this compasion tool (which I only learnt about the other week) - write the answers down and then make a decision.

    Kallista - I am not sure how to work things out in pips but would be interested to see how CO compare against the others you mentioned above. Also if you use HiFX - try their online system as it gives better quotes for the smaller stuff than over the phone.
  • Zillbhill
    Zillbhill Forumite Posts: 1 Newbie
    I expect to receive a payment from the residual estate of a deceased Canadian relative. The Will Executor should be able to specify the best currency to use for the UK beneficiaries. Obviously, we would like to minimise the cost to the Estate and beneficiaries.

    Although an electronic transfer might be the most efficient option, I believe the Executor in Canada would prefer to simply issue cheques to the beneficiaries.

    Will I get the best value by converting the amount to Sterling in Canada or the UK? i.e.

    (a) Ask the originating Canadian bank to issue a Sterling cheque
    (b) Get the cheque issued in Canadian Dollars and convert in the UK

    Any advice on the best way to do this gratefully received.
  • NichStuff
    NichStuff Forumite Posts: 514 Forumite
    Hi guys - Its more than likely I'll need to transfer approx 70,000 euros from a spanish bank account to the uk in the next month or so. Thus obviously I am very interested in the best option to do this (i.e. whats going to ultimately get me the most gbp back to the uk).

    I'm delving through the info here and googling around about forex accounts (I already have a HiFX account) but any heads-up info from people who have done this before (preferably recently) with sizeable amounts would be much appreciated to help weigh-up options ;)
  • bigtallblonde
    bigtallblonde Forumite Posts: 2 Newbie
    Hello Martin
    My sister and father are UK citizens living in NZ, I live in the UK. My sister has inherited £40,000.00 which has unfortunately been paid into her NZ account. As the exchange rate has dropped so much recently this has reduced her inheritance by NZ$20,000. She'd like to transfer the money to my UK account to help pay off my mortgage for a while with the interest (I have a one account) and then I'll send it back to her account once the exchange rate improves. What is the cheapest/best way to do this and are we breaking any rules by doing so?
  • heloid
    heloid Forumite Posts: 472 Forumite
    Talk to at least 3-4 forex brokers and get quotes.
    I've used and and both have given me good service, others may suggest ones to check out as well.
    It's a bit tricky to find out which ones are reliable without trying them or going on others anecdotal evidence though.
  • blueberrypie
    blueberrypie Forumite Posts: 2,394
    Part of the Furniture 1,000 Posts Combo Breaker Name Dropper
    I've used for years and have always been impressed with their service. I've yet to hear a negative review of them here, and they're a solid, reliable company.
  • osmosis_dave
    osmosis_dave Forumite Posts: 10 Forumite
    Hi all,

    New to this particular thread and need some advice please.

    Am soon hopefully to be taking employement abroad and my employer is also a non UK company. They pay in Euro's monthly. What are the steps I need to take to basically ensure I get paid the best rates etc? What are the best banks to use for this? I have a UK bank account (Lloyds TSB) but they want ridiculous ammounts to set up off shore account in Isle Of Man.

    Any advice greatly received
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