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How it works
Formerly, the primary mode of transferring money overseas was through banks, but that is no longer the case. Foreign exchange companies can provide the money transfers services at competitive rates. As a result, it would be wise to make a comparison between the cost of various banks and foreign exchange brokers before making a final decision on which money transfers avenue to employ. However, it is worth noting that a number of these money transfer companies prefer to handle large money transfers–the upward of five thousand pounds. Even so, you can still use them to transfer small sums in the region of £3000 for a fee.
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?
You are probably wondering which is better among banks, foreign exchange firms or money transfer brokers. The good news is that you do not have to make the decision based on limited information. With the advent of money transfer comparison sites, the amount of time and effort involved in choosing the best avenue for transferring money has drastically shortened. Visit a reputable comparison site to get information on the best companies and options that can assist you with your money transfer. Making use of the tools offered by these sites will ensure that you get value for every pound, dollar or euro that you spend.
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