2016 will be remembered as a defining moment in the UK’s political history. One of the instant effects of Brexit was the decrease in value of sterling. This has caused a lot of people who are relocating overseas to pause and assess before moving their money abroad. We looked at what you can do now to make sure you get the best value when exchanging sterling in the current financial market.
Consider fees and exchange rates
There is no one set fee to exchange currency so make sure that you do some research. There are many banks and specialist brokers to choose from. Think about how much you need to transfer and if this will be a one off payment or on a regular basis. When you shop around you will find that some providers will charge transfer fees whilst others will work on a fee by fee basis. The fees applicable to you will be dependent on how you intend to exchange your money. So take the time to consider the best financial option for you based on the rates being offered currently.
The benefit of using your bank
The previous experience you have from using your banks services will be a comfort when you are looking for the best way to move your money abroad. However you may find that you will not be offered a very competitive rate when compared to currency brokers. Using your bank is a great option for small payments but you should be aware of additional fees that could be applied involved as they may start to stack up.
The benefit of using a foreign exchange (FX) broker
Foreign exchange brokers work off smaller margins and are able to offer you exchange rates closer to the ‘interbank rate’. This is not available to private individuals but is used by major financial institutions to trade currency. Depending on the amount you would like to transfer this could potentially save you thousands. If you are planning on exchanging a large sum of money during your relocation you may find this to be the best method for you.
Look into the transfer options available to you
If you are thinking about using your bank keep in mind a lot of banks only have a ‘spot transfer’ option. This means currency is bought and sold at the current exchange rate the bank is offering. If you are worried about further dips or would like to plan and budget for any future house sales etc it would be worth using a provider that offers the ‘forward contract’ option. What this does is fix the exchange rate you use with the provider for up to two years. Protecting any future currency transfers you would like to make over the fixed period from the exchange rate dropping further – helping you budget more carefully for your move.
Taking a proactive approach to your currency transfers could really pay off for any future relocation, leaving you with the time to focus on settling into your new life.
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Aj
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