Euro Sterling Current Account Fx Rate

jotpilot

So I'm starting a job soon which will pay me in Euros. I'm based in the UK. Been investigating the options. Checked different rates for today to discover:

First Direct (my current account), if I pay direct into it, gives 1.222.

Citi, if I transfer between their Euro and Sterling accounts, will give me 1.2272866.

XE gives today as 1.198.

I was surprised as most people seem to be suggesting the Citi option which is worse than my current account...

Any other options?

Thanks

Ben8282

Who are these 'most people' who seen to be suggesting the Citi option?

I am also curious as to how you have established the exact rates that you will get by having Euros paid into a UK sterling account. Where did you get your figures? Are you sure about these rates? They look like selling rates not buying rates ... i.e. £1 will buy 1.222 Euros, not 1 Euro will get you £1.222. Or do you mean you will get £1 for Euros 1.222. This is a strange reverse way of expressing a buying rate.

The difference between these rates - Euro0.005 for every £ exchanged. 50c difference for £100.00. Do you really care about getting an extra 50c for each £100.00 you change. Is it really worth changing your bank for??? There may be other factors to take into account when deciding which account to use beyond which gives the very best exchange rates.

As you will be based in the UK, can you not ask your employer to be paid in UK currency?

RetiredInThailand

You should be looking for a bank that will offer a much finer rate when you convert from EUR to GBP, and the best way to do this would probably be to have a EUR account and do the exchange to your GBP account once a month at a booked rate which will be much closer to the interbank rate quoted by XE.

You also need to watch out for the charges for receiving EUR transfers, which are often around GBP6 or more even when the transfer is into a EUR account.

It's true that many people suggest Citibank for these sorts of accounts but I have never understood why. They are not the cheapest, they dont pay much interest (if any) and the exchange rates they apply are not very good.

jotpilot

Ben8282 wrote: »

Who are these 'most people' who seen to be suggesting the Citi option?

I am also curious as to how you have established the exact rates that you will get by having Euros paid into a UK sterling account. Where did you get your figures? Are you sure about these rates? They look like selling rates not buying rates ... i.e. £1 will buy 1.222 Euros, not 1 Euro will get you £1.222. Or do you mean you will get £1 for Euros 1.222. This is a strange reverse way of expressing a buying rate.

The difference between these rates - Euro0.005 for every £ exchanged. 50c difference for £100.00. Do you really care about getting an extra 50c for each £100.00 you change. Is it really worth changing your bank for??? There may be other factors to take into account when deciding which account to use beyond which gives the very best exchange rates.

As you will be based in the UK, can you not ask your employer to be paid in UK currency?

Search for "Euro" in the post titles on this forum and you will see what I mean.

I called First Direct and Citi today and asked what their rates would be, simple.

The rate differences between Citi and FD would be £30 a month, between Citi and XE would be £130, so yes I care.

I am not transferring my banking wholesale, I need a Euro account where ultimately some currency will remain in it, but most will be transferred to Sterling, at no particular time.

No I cannot ask to be paid in Sterling, it is not a UK business.

RetiredInThailand wrote: »

You should be looking for a bank that will offer a much finer rate when you convert from EUR to GBP, and the best way to do this would probably be to have a EUR account and do the exchange to your GBP account once a month at a booked rate which will be much closer to the interbank rate quoted by XE.

You also need to watch out for the charges for receiving EUR transfers, which are often around GBP6 or more even when the transfer is into a EUR account.

It's true that many people suggest Citibank for these sorts of accounts but I have never understood why. They are not the cheapest, they dont pay much interest (if any) and the exchange rates they apply are not very good.

Thanks, you mean via money broker?

jotpilot

I've just answered my own question. Called up CurrencyUK (I am not connected to them in any way), and the rates are:

Euro 10k = 1.2085, 20k = 1.2065, 50k = 1.2040.

Makes the UK banks rate look like a sick joke (including Citi, note everyone). Therefore, I am going to open a Citi Euro account, get paid into that, and use the above guys to transfer to my UK account.

RetiredInThailand

jotpilot wrote: »

Thanks, you mean via money broker?

That's one option, but banks will offer better rates if you negotiate the transfer in advance rather than just pay the foreign currency in and take pot luck. They normally call this a "booked" rate and I usually manage to get something similar to the rate offered by brokers, and this usually represents a saving of perhaps 2% or more on the standard rate. Not a fortune, but worth having.

I am a bit wary of using brokers as there is little or no protection if they happen to go bust whilst your money is being transferred. For small monthly transfers inside Europe this is probably not a significant risk.

RetiredInThailand

jotpilot wrote: »

Therefore, I am going to open a Citi Euro account, get paid into that, and use the above guys to transfer to my UK account.

Check the small print. You may have to pay a fee to Citibank when you transfer out your Euros to the broker, and this may be higher than you expect.

You might like to look at opening a EUR account in Belgium or Germany as the out charges may be less. They should also pay you a couple of percent interest which you probably wont get from Citi.

jotpilot

RetiredInThailand wrote: »

Check the small print. You may have to pay a fee to Citibank when you transfer out your Euros to the broker, and this may be higher than you expect.

You might like to look at opening a EUR account in Belgium or Germany as the out charges may be less. They should also pay you a couple of percent interest which you probably wont get from Citi.

OK, I will do that, thank you for the info.

EDIT: Spoke to Citi, they assure me there are no charges whatsoever for any SEPA transfers, including to a broker. There used to be, and obviously there may be in the future, but for now, the way forward for this situation seems to be a free Euro account (e.g. Citi), and money broker for transfers, or maybe your bank at a 'booked' rate if you can get it as RetiredInThailand suggests.

inmypocketnottheirs

jotpilot wrote: »

Spoke to Citi, they assure me there are no charges whatsoever for any SEPA transfers, including to a broker. There used to be, and obviously there may be in the future, but for now, the way forward for this situation seems to be a free Euro account (e.g. Citi), and money broker for transfers, or maybe your bank at a 'booked' rate if you can get it as RetiredInThailand suggests.

Interesting as you started off saying you couldn't understand why people recommended Citi; now your opening an account.

A specific benefit of Citi is that you can have 3 separate currency accounts, £,€ and $, switch money between all three ion line in real time. Plus you can have a Visa debit card that can be switched by a phone call between accounts.

I travel extensively, in the last year 8 US trips and 4 European so fr these trips it works really well.

jotpilot

inmypocketnottheirs wrote: »

Interesting as you started off saying you couldn't understand why people recommended Citi; now your opening an account.

A specific benefit of Citi is that you can have 3 separate currency accounts, £,€ and $, switch money between all three ion line in real time. Plus you can have a Visa debit card that can be switched by a phone call between accounts.

I travel extensively, in the last year 8 US trips and 4 European so fr these trips it works really well.

Fair enough, but what I meant was using Citi to TRANSFER currency between their accounts rather than the free Euro account per se; my point is their rates are awful (as I said above, even worse than paying Euros direct into my sterling account!). If you are going to be transferring any significant amounts of currency and care about the rates you should not be using Citi.

jen245

I have Citi US $ account, and disagree that their rates are awful. Yesterday I transferred £1000 from my Natwest account into my Citi account and got $1599.80. The market rate at the time was $1.6013, so not much less than the market rate. I don't know if similar rates apply when transferring internally between accounts, as I only have that 1 account, but every time I've paid money in from an external account, I've always had either the market rate, or very slightly less. I can't get that anywhere else.