How to save when you spend big abroad
May 12th 2010, Vanessa Whittingham
2008 and 2009 saw a decline in people buying properties overseas, with banks cutting bonuses and everyone feeling the pinch of the recession. Thankfully, 2010 has started off with more gusto, with reports of increased searches for overseas property implying that Britons are loosening their purse strings and looking to invest their hard earned money.
For those lucky enough to make these investments abroad, whether it is a house, a boat, some artwork, or even for those emigrating, a key question is how do you send money abroad? Most people will automatically look to their bank and transfer money through them. However, foreign exchange specialists can offer people transferring money abroad a much better deal. These organisations have much lower overheads than a bank and specialise in currency exchange, meaning that they can offer much better exchange rates and a range of payment products. To put this in context, most providers state that they can save customers up to 4% on the amount transferred compared to a bank. A significant amount when transferring thousands, or even hundreds of thousands of pounds.
How do you select the right broker? The first time you make an international payment many people will not know where to start. So take some time and research the different foreign exchange specialists out there. By comparing the typical foreign exchange margins, the time to complete a transfer and the services / accessibility offered you can select the broker best suited to your needs. Most brokers will provide an account manager who can explain the different products, fees and details in detail so that the process of transferring money internationally, as well as collection abroad, is clear.
Once you have found a provider, there are still the different products to consider although these are largely dependent on the timeframe available. To name a few: an immediate transfer can be made (spot contract), a transfer date in the future can be fixed (e.g. for completion of a purchase) with a forward contract, or a limit order can be used which allows those with no set timeframe to set a minimum currency exchange rate at which the international payment will occur. Therefore protecting themselves from drops in exchange rate.
When considering foreign exchange specialists, it is important to note that if you are looking to transfer less than £3000 or just to get money for your holiday the bank or other travel money providers will be able to offer more suitable services.
