Sending Money Overseas article discussion

Tarian

For FX, there are three things to think about - and they should be kept separate.
1. The market FX rate.
2. The broker's FX rate (margin versus Market)
3. Transfer fees

1. is the most important.
Selling GBP for AUD at 1.9000 is way better than getting 1.8000 - even with broker's margin and fees ( opposite if you are selling AUD)
BUT - nobody has a crystal ball.
(There are techniques to improve the odds of a better rate over time - but you must accept the risk of rates going the wrong way.)

2. The intermediary often sets their own FX rates - and most of brokers mentioned in this Forum offer rates way better than a High Street Bank.
BUT several are NOT transparent.
i.e. They do not publish actual FX rates that you can deal on - or are amount/size dependant.

e.g. Transferwise (TW) rates only apply for smaller amounts - sometimes up to around £1,000.

If you wanted to sell AUD 50,000, TW would post a rate.
You enter amount and click "sell".
One of two things happen depending on which route you take - either A) "your" rate or TW's rate:

A) You get (say) AUD 2,000 done at "your" rate.
The rest has to wait until the underlying market moves in your favour

You get the whole AUD 50K done at an average rate less than you expected (unless the market happens to move rapidly in your favour).

TW are not ripping you off. Their model depends on the "other side" i.e. other customers doing the opposite of what you want.

By contrast CurrencyFair post actual FX rates offered - and crucially the amounts that they are good for. (You have to find CF's "Market Place")

So if you don't want to "play the market" (i.e. wait for a better rate), CF can give you absolute certainty.
The "cost" is typically a rate 0.6% off the wholesale market - plus a transfer fee of (IIRC) AUD 4.50.

But GBP/AUD is a popular market at CF, with a good chance of getting a rate better than wholesale minus 0.6%.

3) The impact of Fees depends on the amount selling.
Unless trading "pocket money", any fee up to ~£10 may be secondary - but still better than most High Street Banks with £25-£35 - on top of crap FX rates.


Disclosure:
I have an account at CF but am not employed by them.
And IMO, their latest interface (website) sucks compared with their previous version - but what you see is what you get FX-wise.

robatwork

Tarian wrote: »

e.g. Transferwise (TW) rates only apply for smaller amounts - sometimes up

By contrast CurrencyFair post actual FX rates offered - and crucially the amounts that they are good for. (You have to find CF's "Market Place")

So I just put in £40,000 into both site.
Transferwise will actually transfer 45,348.37 Euros
CurrencyFair will actually transfer 45,285.00 Euros

So TW is best even for larger amounts at the moment. I didn't really get much of your diatribe - the bottom line is that CurrencyFair isn't better today. Unless I'm missing something.

Your disclaimer is also a bit...odd.

Preedyboi

hairypitz wrote: »

I think if I use OFX I have to transfer £50K for that rate. So I can’t do it in stages with them.
Also I know the rate could go up, but what if it goes down? I’d be kicking myself.
How much would I be safe transferring in one go? A really small amount, just to see that I’m doing it right?
Cheers

I would urge caution with OFX. The rates displayed are interbank rates and not the ACTUAL rate!

I use Thomas Exchange UK,as they give good rates, and another big benefit is that you dont have to convert the AUD into Sterling immediately, they can hold the Aussie funds in their AUD Client ac until you are happy to book a rate (i prefer this as it gives me more control during these volatile Brexit times). If you go to the Buyback page on their site there's some info there.

robatwork

Preedyboi wrote: »

I use Thomas Exchange UK,as they give good rates, and another big benefit is that you dont have to convert the AUD into Sterling immediately, they can hold the Aussie funds in their AUD Client ac until you are happy to book a rate (i prefer this as it gives me more control during these volatile Brexit times). If you go to the Buyback page on their site there's some info there.

They are FCA registered - good
"It cannot be determined if FSCS cover would apply to this firm. Please contact the firm directly to understand whether their products/services would be covered by FSCS." - not so good

Worth clarifying what happens if you have £50,000 in their client ac and they go bust. Would urge caution keeping funds in an account that isn't FSCS covered.

hairypitz

So I’m in the middle of registering for OFX, Currency Solutions, Transfewise and FreeMarket as these seem to come up well on Xompare.com for changing AUS $ to GB £
Strangely OFX are offering £700 less than it says on Xompare.com. Which makes them less of a good deal. Is this what you mean Preedyboi about the interbank rate rather than the market rate?

Consumerist

hairypitz wrote: »

So I’m in the middle of registering for OFX, Currency Solutions, Transfewise and FreeMarket as these seem to come up well on Xompare.com for changing AUS $ to GB £
Strangely OFX are offering £700 less than it says on Xompare.com. Which makes them less of a good deal. Is this what you mean Preedyboi about the interbank rate rather than the market rate?

The interbank rate is the rate of interest charged on short-term loans made between banks and has little to do with money market wholesale rates which is what the banks pay for currency. The banks then load the rate by about 3% when selling to its customers.

Not sure why your quote from OFX was so different to that quoted on Xompare.com unless the amount involved was quite large.

The money markets are closed over the week-end so it might be better to try again on Monday.

Nardge

I wrote this some months ago for the benefit of others, whilst wanting to change Euros to Pounds at the best rate. (SINCE THE TIME OF WRITING, I'M ACTUALLY READING UP ON "REVOLUT" - WHO WOULD APPEAR TO BE EVEN BETTER!)

It describes getting the Euro money here in the UK as Pounds, at a MAXIMUM YIELD.

‘Reuters mid-market rate’ is that which banks use amongst themselves when lending money to each other across borders.

When high-street banks change your money e.g. from Euro to Pound, many state there is no Fee, their service is "free"... However, they apply a 'mark-up' on the exchange rate to compensate - Usually 3-5% (£50 of every £1000). Mainstream banks are thus best avoided!

This leads us to consider the international foreign currency exchange services...
‘Transferwise’ is the best of the crop - not only does it pin the exchange rate at the ‘Reuters mid-market rate’ at the time of exchange, but it states transparently that it will take a nominal fee of 80p + 0.3%. This was 80p + 0.5% at the time I made the comparison below.

I registered with a number of exchanges, to compare, and you'll see from the table below which ranks the best:

The following Foreign Currency Exchanges would exchange 20 000 Euro to:

TransferWise
£17,432.84

CurrencyFair
£17,412.83

OFX
£17,406.00

Currencies Direct
£17,328.00

FairFX
£17,318.00

MoneyCorp
£17,272.00

I thus went on to use TransferWise myself for exchange of 20,000 Euros, without glitch or issue...

I have since opened a ‘Borderless Account’ with them, so I can:
- Hold funds in different currencies at the same time
- Make currency exchange (e.g. Euro to Pound) whenever, at a fixed rate and time that suits me...

It is clear as detailed above that TransferWise outclass all others, even when exchanging large sums.

It seems I might be able to go one better with 'REVOLUT' however, either at 0% for £5,000/month (0.5% thereafter),
or at 0% for greater sums provided I pay a small one off monthly fee which can then be cancelled!

I will endeavour to keep you posted with developments!

With Kind Regards

jonesMUFCforever

Were you using a small phone when you typed that out LOL?

MikeyHM

Just tried to look at MoneyBookers. They are now called Skrill. Unfortunately you have to sign up to see what you could get in a foreign currency, so didn't bother

I had some problems with Azimo, who are the number one site for MSE. Firstly their default way of sending money is by using your card. You get charged by your card provider for this as though you’re taking a loan. They say this is the quickest and easiest way. Card charges can be substantial, so beware. Azimo say nothing about this.. They are not FCA regulated and it takes a couple of days for money to be transferred. I also had problems getting cashback through Topcashback(who I thoroughly dislike) as they claim I clicked through MSE. This was true though I didn’t sign up or make a transaction.

My number 1 is now TransferWise. They are FCA regulated giving a bit more piece of mind. On this occasion their exchange rate was better than Azimo and the overall sum sent was 10 Euros higher than Azimo, despite charges being higher. I’m not sure how long the money took to arrive at the recipient’s bank account, but it was certainly less than an hour. Not sure how long it takes for other currencies.

It's got to be TransferWise as confirmed by Nardge above.

Butch_Dingle

MikeyHM wrote: »

I had some problems with Azimo, who are the number one site for MSE. Firstly their default way of sending money is by using your card. You get charged by your card provider for this as though you’re taking a loan. They say this is the quickest and easiest way. Card charges can be substantial, so beware. Azimo say nothing about this..

Maybe you sent the funds to Azimo by credit card instead of debit card? If so, its hardly surprising that you were charged extra. I've sent funds both by debit card and by bank transfer (faster payments) to Azimo and never been charged extra by my bank.