Which Companies Should You Use to Make Overseas Money Transfers?

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How it works

Foreign exchange brokerage firms charge minimal or no fees and offer competitive exchange rates. This makes them an especially great option for large money transfers, typically £5,000 or more. You can use foreign exchange brokers to send money overseas as they specialize in currency transactions. They don’t usually handle small transfers. A typical small-fee transfer is about £3,000. However, a majority of these companies will transfer less at a fee. On the other hand, when you make large transfers, many brokers will not impose a charge for the money transfers because they turn a profit on the exchange rate. This makes comparing them easy.

Making a transfer

First, you are required to open an account and transfer money or pay in to an account with the exchange broker. This may take a day or two. When making a currency comparison, you have two options: you can transfer the money abroad using the current exchange rate, or you can use a forward contract. The contract locks in the exchange rate for future trade. Some foreign exchange brokers will also handle regular overseas transfers. They can also offer travel cash, typically delivered to your door the following day via post. Currency comparison sites can help you identify currency traders near you.

If you encounter challenges

Keep all the paperwork in a safe place. If you encounter any problems with the transfer, your receipts will assist you in proving that you sent the money. If your foreign exchange broker becomes insolvent, there are no compensation schemes to cover your loss. Therefore, these companies may not be as safe as using a bank. It is imperative that you check out the firm before committing yourself, as you will be using the broker for large transfers. Conduct adequate research on currency traders before comparing them on money transfer comparison sites.

Companies authorized by the Financial Conduct Authority are required to safeguard your money by keeping it separate from the firms’ fund. Therefore, your money is paid back should the company become insolvent.. Companies simply registered with the Financial Conduct Authority are not required to safeguard your money this way. Make sure that you always choose an authorized company.

A money transfer firm or a bank: which is the better choice?

When transferring money abroad, you can opt between a money transfer firm, a bank or a foreign exchange broker. Find out how much your bank charges. Check both the fees and exchange rates to calculate the total amount of foreign currency your money will buy. Use a money transfer comparison website to compare deals between foreign exchange brokers and money transfer companies. Compare the quotes keeping the risk of each option in mind. If for instance, the best deal is from a company that is not authorized by the FCA, take into account the size of your transfer. If you are transferring a lot of money, an unauthorized firm is not worth the risk because your money will not be protected.

Huw Jenkins is the author of this article on money transfers. Find more information, about money transfer comparison here