Answers to Frequently Asked Questions

When should I use a foreign exchange broker?

Foreign exchange brokers are only suitable for larger purchases, for example:

• Are you buying a house overseas?
• Do you have regular payments to be made overseas?
• Are you emigrating?

If you answer yes, or you need to transfer more than £1000 then foreign exchange specialists will be right for you.
For amounts less than £5,000 speak to a couple of providers to check the fees and exchange rates to find the best deal. Above £5000, the fees generally decrease as does the FX margin giving you a better deal on your currency conversion.

Why should I not just use my bank to transfer money?

When you need to send money abroad, specialist foreign exchange brokers can often offer a much better deal than banks as they have much lower overheads and focus only on foreign exchange. Typically the foreign exchange margins are below 1%, whereas banks will usually charge upwards of this for international payments and transactions between international accounts.
Foreign exchange brokers can also offer a range of products, which banks do not offer. For example, you can set up regular payments abroad for paying a mortgage overseas or use a forward contract to fix your exchange rate for when you need to send money overseas in a weeks time – protecting yourself from any decline in exchange rates.
For more information on the different products, take a look at our international money transfer tips.

There are a lot of different products, what is best for me?

Foreign exchange brokers can offer a range of different options for your international money transfer. Our tips page , details each of these options in more detail but as a quick guide:

Do you need to transfer money quickly? Are you buying a car, boat, or property overseas?

• Use a Spot Contract.You will get the best foreign exchange rate available at that time, and the transfer will be done immediately.

Do you need to transfer money for a fixed date in the future and are worried about declines in exchange rate?

• Use a Forward Contract.This allows you to fix an exchange rate for up to two years in advance, protecting yourself against currency fluctuations. For example, if you suspect the pound will decline against the dollar and you know that in one month you need to make a £5,000 payment to the US, for completion of a house purchase etc. By using a forward contract you can pre-book this transfer for the correct date but at the current exchange rate.
• There is also a Time Option, which is similar to the forward contract but with some additional flexibility as you can ‘draw down’ some of the funds before the predefined payment date. Allowing you to transfer some funds earlier than you had planned.

If you need to send some money abroad with a specific budget, but no clear timeframe?

• Use a Limit Order. This allows you to set a limit on the exchange rate at which your transfer will be made, protecting yourself against falls in the exchange rate, and gives you a clearer idea of how much money you will be sending overseas.

Need to make regular payments overseas for a mortgage, or pension payments?

• A Regular Payments Option will suit your needs, and these can usually be set to occur once a month, every quarter, or every 6 months.

What is foreign exchange margin?

Foreign exchange margin is the amount the bank or broker adds onto the interbank exchange rate when they quote the rate to the consumer. The bigger the margin, the more each international money transfer will cost you.
For example, if the interbank exchange rate between GBP to Euros is 1.09 Euros to the pound, then the bank / broker will typically quote the consumer a rate of say 1.07 Euros to the pound. The bank or broker than takes a ‘margin’ of 0.02 euros on every pound converted.
It may not sound much, but when you are converting thousands of pounds, small variations in the foreign exchange margin can significantly affect the cost of your overseas money transfer.

Will I be charged for an overseas transfer?

Usually you will be charged a nominal fee for your transfer, especially if you are sending smaller amounts of money overseas. However, some brokers will actually waiver these fees for large transactions.
You can compare the fees on our comparison tables , and each broker will be able to explain their fees in more detail.

Should I keep my receipts after the transaction?

It is advisable to keep hold of your receipts until you know that the money has safely arrived in the destination account and that it has reached the correct recipient. If anything goes wrong with your money transfer your receipt is the only proof of the transaction and cost expected.

What do I do if the money doesn’t arrive?

If your international money transfer does not reach its destination account, then you need to contact the foreign exchange broker you used with your receipt. They will be able to let you know why the money has not arrived, and what actions you need to take.

Will there be a fee to pick up the money?

On occasion there can be a fee to pick up the money, charged by the recipient’s bank or depending upon the withdrawal or cash transfer method used once the money has been sent abroad. The foreign exchange brokers will be able to advise in more detail before the transaction though.

Is it cheaper to send money abroad in multiple, small amounts or in one bulk payment?

It is usually cheaper to send one large bulk payment, as the fees will usually be lower or the transaction exempt from fees, and better foreign exchange margins are often given with larger transfers.
Smaller transfers usually incur higher fees and poorer exchange rates, so if possible transfer larger sums of money each time.

What questions should I ask the foreign exchange broker?

There are a few different things it is useful to check with the foreign exchange brokers before deciding on a provider. Such as:

• What foreign exchange margin will be applied?
• What fees will you need to pay?
• Can you fix the exchange rate if required, so you know exactly how much money will be sent overseas?
• Can they guarantee delivery of the money by a certain date or time? Or how long will the transfer take?
• If this is not met, are you covered in case of any financial repercussions? (e.g. late mortgage payments)
• Will there be a fee when the money is picked up?
• What happens if the money does not arrive?