Banks V Foreign Exchange Brokers

Banks V Foreign Exchange Brokers

Who is offering the best exchange rate when purchasing a property overseas or when you need to send regular transfers overseas to pay for your mortgage or ongoing bills?

The best method of sending money abroad really depends on how much you need to send, how often and finally how soon it needs to get there only then can you work out  the value of your base currency to get the maximised rate of foreign currency.

Banks versus Foreign Exchange Providers

Previous trends prove that for many years people have been using their bank to transfer funds abroad as the majority have never heard of a foreign exchange broker, in a recent survey conducted it showed even now 50% of the people have still not heard of using a currency broker. In recent years however, with the continued volatility of the economic markets, there has been a continued increase of individuals shopping around and in most cases online looking for alternative options in order to capitalise on unstable exchange rates and  reducing their risk. Most of the education has not been done by the foreign exchange providers but by the overseas properties companies trying to increase their revenues by partnering up with currency brokers.

What has always made people shy away from foreign exchange brokers is the fear to the security of funds, banks have gained in strength in currency transfers due to these fears with consumers reluctant to move away from using their bank to transfer their money abroad

But recently however this has changed, with the collapse of so many banks in such a short space many individuals have realised the benefit of using foreign exchange brokers as they came under new regulation laws introduced by the FSA where companies now had to operate separate client finds accounts to ensure added protection. The truth is most of the larger players have been operating seperate client accounts for many years but also offered individuals potential on better exchange rates and either reduced costs of the transfers and in some cases removed altogether.

So what are the main advantages of a foreign exchange provider to transfer overseas payments?

1. In most cases, foreign exchange providers, will provide you with a dedicated dealer who will be able to offer you a personal service and ensure that you are given the service best suited to your personal requirements.

2. The rate of exchange in most cases will be far superior to that offered by the bank and in some cases could potentially save you up to 3% on the purchase price of a property.

3. Foreign Exchange providers often agree to send the payments free of charge whereas majority of banks will place charges on every transaction.

4. Many of the regular overseas payment plans allow for regular transfers to be sent free of charge, whereas banks can place a charge of anywhere between £10 and £40 on every transaction.

5. It is free of charge to set-up an account with a foreign exchange provider and you are not obligated to use their services once you are a registered client.

6. For those clients on a budget, foreign exchange providers offer forward contracts in order to secure a rate of exchange. This means that the value of your currency will not change between the contract date and your final payment, ensuring you remain within your budget when purchasing a property or making regular payments abroad.

Tags:  Banks V Foreign Exchange Brokers, exchange currency, forward contracts, regular overseas payment plans