Forward purchasing currency

Mikeedeedee

Grateful for advice. We am thinking of purchasing $2,000 dollars at $2.0075 = £1.00 guaranteed, when we will receive the $ by registered post in July. This would of course mean stumping up £1,000 in advance - and with a company that doesn't seem to offer any financial backup when things go wrong (eg they go bust).

Would anyone recommend this, and would anyone endorse the company we are proposing using: Interchange (retail / wholesale foreign exchange).

Are there any better options out there? We fly to California in September hence the apparent attractiveness of this arrangement. Our main concern is the apparent lack of security with our money in the meantime.

Mike & Denise
:rotfl: :A

jonesMUFCforever

I think you can get a rate of about 1.85 dollars to the pound now from a bank so $2000 would cost you £1085.
Is the £85 you gain by using this company enough of an advantage to take the risk? Only you can make that decision.
I mean by July the rate could be 2.10 and you lose out?
(or of course it could go the other way and you make more money but only if they are still in business!)

IoweIoweitsofftoworkIgo

Why not just open a US dollar account with your bank?
This will give you the option then to purchase dollars as/when the rates suits you. You will just need to remember to give your bank a few days notice when you wish to withdraw the currency as they may need to order it in.
HTH

linbadd

Reuters are currently quoting $1.9781 to the pound. I presume this is the 'interbank' rate, which is higher than the rate at which banks and currency firms sell to the public.

The rate you've been offered sounds a bit too good to be true.

Lin

Mikeedeedee

Thanks for the replies. We are still thinking about the option. I suspect they make their money by lending out ours and securing a better rate than the £85 difference. My instinct is that the dollar will strengthen against Sterling and this deal is, therefore, seems attractive, albeit that you are tying money up for six months which could just as easily be paid against the mortgage - perhaps securing bigger savings than the £85.

Grateful for any other postings before finally deciding.

Thanks

Mike & Denise

jonesMUFCforever

IoweIoweitsofftoworkIgo wrote:

Why not just open a US dollar account with your bank?
This will give you the option then to purchase dollars as/when the rates suits you. You will just need to remember to give your bank a few days notice when you wish to withdraw the currency as they may need to order it in.
HTH

Try checking the costs from a major high street bank before advising this.
The bank I work for will charge you £60 per year just for having the account 2% + £10 for paying in dollars (cash) and the same for withdrawals!

jonesMUFCforever

Mikeedeedee wrote:

Thanks for the replies. We are still thinking about the option. I suspect they make their money by lending out ours and securing a better rate than the £85 difference. My instinct is that the dollar will strengthen against Sterling and this deal is, therefore, seems attractive, albeit that you are tying money up for six months which could just as easily be paid against the mortgage - perhaps securing bigger savings than the £85.

Grateful for any other postings before finally deciding.

Thanks

Mike & Denise

To be honest with you I don't think it is worth it for $2000 or £1000.
I know this is not very MSE like but if it was me I would be putting say £250 aside and buying from your bank or Post Office or bureau (eg wherever you get the best rate) on a monthly basis as this will average out your gains and perceived losses.

IoweIoweitsofftoworkIgo

comments withdrawn

jonesMUFCforever

OP wants cash not cheques.

budgetflyer

Another one who do this is http://www.crowncurrencyexchange.com/

rates are marginally lower than the interchange company mentioned.

rates between now and July could rise or fall so this is a good way of fixing a decent rate.People do this when buying homes abroad for 2-3 years in front to fix their costs, they now seem to be moving into the "holiday money" market.

mrsv69

budgetflyer wrote:

Another one who do this is http://www.crowncurrencyexchange.com/

rates are marginally lower than the interchange company mentioned.

rates between now and July could rise or fall so this is a good way of fixing a decent rate.People do this when buying homes abroad for 2-3 years in front to fix their costs, they now seem to be moving into the "holiday money" market.

I can vouch for this company, I've used them in the past and they are completely legit and deliver the money, so no worries :T . You order in advance and guarantee great exchange rates.