Safety Of Foreign Currency Transfer UK to New Zealand

drumtochty

We have a requirement to send a relative who is not well off and lives in New Zealand, £35k this month and £25k in say April 2021.

The money is from the relatives deceased mother’s estate.

First thoughts were just to send it from the TSB account we are using to gather the deceased’s estate funds to the relatives New Zealand Bank account which we thought would be protected if anything went wrong in the transfer.

Reading the article on the Moneysaving Expert, I cannot work out whether doing it through a UK to New Zealand bank is fully protected or not. The Banks tend to be expensive for this service.

https://www.moneysavingexpert.com/banking/foreign-currency-exchange/

Then the article points out that better currency rates are available from Currency Brokers that deposit the clients’ money in a separate clients account overnight.

The £35k due to be sent next week is above the TSB £25k daily Internet Banking limit. It would be transferred to the UK side of the Currency Brokers office over day 1, £25k and on day 2, £10k transferred. On day 2 when all the money shows in the UK Currency Brokers account ,we do the transfer as one transfer. Therefore only pay one transfer fee.

 The main issue with the Currency Broker is according to the article, that particular day the Currency Broker could get into financial trouble, the clients’ money has not been put in the clients account and that money could go down with the Currency Broker.

Can anyone advise if the more expensive Bank to Bank transfer is guaranteed.

 It will be to the relative to decide on the route taken.

 

colsten

.A bunch of strangers on the Internet can tell you that using TSB is safe but the strangers are not in a position to guarantee you anything. You should ask TSB because they operate according to their T&Cs

NottinghamKnight

OP you have to weigh up the savings against the risk, the risk is very low if you are using an experienced currency broker that has been operating fior years but it's still a risk, nothing has no risk. How much is the fee for example, presumably just a few pounds in which two separate transfers would seem sensible in not leaving money at risk for as long.

CKhalvashi

I'd send something like this using something like Transferwise (I use them frequently).

The money is fully protected against the FSCS limit with Barclays, and you are able to store the money in an account (in NZD if you wish) to make the transfer. AML checks will need to be done by TW, and therefore it's worth factoring a day in for this, maybe a little longer given the full situation. You are likely to save significantly against using a high street bank.

drumtochty

NottinghamKnight said:

OP you have to weigh up the savings against the risk, the risk is very low if you are using an experienced currency broker that has been operating fior years but it's still a risk, nothing has no risk. How much is the fee for example, presumably just a few pounds in which two separate transfers would seem sensible in not leaving money at risk for as long.

Yes splitting say in three payments some days apart if using a currency broker and paying three small fees does mitigate the risk. Especially if you wait until the relative advises when each payment is received in their account.

Thanks NottinghamKnight

drumtochty

CKhalvashi said:

I'd send something like this using something like Transferwise (I use them frequently).

The money is fully protected against the FSCS limit with Barclays, and you are able to store the money in an account (in NZD if you wish) to make the transfer. AML checks will need to be done by TW, and therefore it's worth factoring a day in for this, maybe a little longer given the full situation. You are likely to save significantly against using a high street bank.

I will have a look at their website, thanks.

drumtochty

colsten said:

.A bunch of strangers on the Internet can tell you that using TSB is safe but the strangers are not in a position to guarantee you anything. You should ask TSB because they operate according to their T&Cs

Yes an in branch chat with them was to say the least a bit lacking in detail. I will try to find their currency transfer T&C's. Good suggestion.

colsten

CKhalvashi said:

The money is fully protected against the FSCS limit with Barclays

You make it sound as if FSCS protection comes into it. It does NOT. Categorically NOT.

Best to go by the Transferwise explanation: https://transferwise.com/help/articles/2949821/is-my-money-covered-by-a-financial-protection-scheme

jonesMUFCforever

It does not matter who you ultimately use ; once the money leaves your account by international transfer you no longer have any FSCS protection. For example if you did use TSB they would use your instructions to make the payment - if you get those details wrong - it would not be TSB's fault.

eDicky

NottinghamKnight said:

 How much is the fee for example, presumably just a few pounds in which two separate transfers would seem sensible in not leaving money at risk for as long.

Apart from any fee, you have to consider the exchange rate that will be used.

Banks typically add a 3%+ margin on conversion during a direct transfer and lack transparency about it.

TransferWise for example provide the perfect interbank rate with a very reasonable fee, nothing opaque.

NottinghamKnight

eDicky said:

NottinghamKnight said:

 How much is the fee for example, presumably just a few pounds in which two separate transfers would seem sensible in not leaving money at risk for as long.

Apart from any fee, you have to consider the exchange rate that will be used.

Banks typically add a 3%+ margin on conversion during a direct transfer and lack transparency about it.

TransferWise for example provide the perfect interbank rate with a very reasonable fee, nothing opaque.

Yes the fee comment just relates to the currency broker, not to the bank or margin.