For anyone who’s moved to London (or anywhere else in the UK) from their home country, then it’s pretty likely that you’re going to need to carry out regular transactions into UK sterling. And you may well need to transfer money back to your home currency too.
There are many ways that you can do this. And the first place that it seems logical to go to is your bank. After all – they look after your money, it’s safe, and naturally they’re going to be competitive because you’re a loyal customer and they want your business – right?
Err, actually – no. Carrying out currency transfers through a regular bank is pretty much the most expensive way to do this. But rest assured there are other ways. And we’ve put together this guide to point you in the right direction of how to make currency transfers at the lowest fees possible (and safely).
So why are the banks so expensive?
- Banks usually charge fees to change your currency to UK sterling (or to any other currency).
- Banks give you terrible rates of exchange. This is where they make their money.
- If the bank uses a third party bank during the process, then any fees charged from this bank are also paid by you.
- And although this isn’t actually related to cost, banks are historically slow at making the transfer. Typically it can take as long as 4-6 days for the funds to end up in their intended account. Sure, you can have it done quicker. But guess what? You’ll have to pay extra…
But there’s a happy alternative to the banks
Have you ever heard of FX brokers? If not, then it’s time you did. Because this is the answer to avoiding costly bank fees. In fact, using such a broker can save you an average of 4-5% on each and every transfer. And if your regularly moving money from one currency to another – and perhaps large sums – this can add up to an awful lot of your hard earned cash.
So what is an FX Broker?
An FX Broker (short for foreign exchange broker) is a company that deals with the currency markets. They make their money from the ever-shifting exchange rates. But in addition to this, they provide currency transfers – both to individuals and businesses.
And – this is the important bit – they can provide you as an individual with a near perfect exchange rate. Not the tourist rate… Not the rubbish rate your bank offers… But pretty much the best rate that it’s possible for you to get.
Sounds exciting… How do I choose which one to use?
So, there are lots of FX brokers to choose from. But the most important thing when moving currencies is to ensure that the broker you choose offers safety for your money, is regulated, and has a solid history in the business.
Below are some FX brokers that we’ve personally used or are highly recommended by close friends, are constantly highly rated and provide great customer service.
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HiFx
UK based HiFx has been in the business since 1998 and is a major player. In the last few years it was purchased by Euronet Worldwide (a US payment company)
Reasons to choose HiFx:
- They use bank-level security provided by Norton. This is exactly the same as used by most of the world’s largest banks and Fortune 500 listed companies.
- Authorised by the FCA (the Financial Conduct Authority).
- Transactions can be carried out online or by telephone.
- Information on your currency exchange is tracked step by step and provided to you via text or email.
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TransferWise
Although newer to the market, TransferWise has been in business since 2011. Created by the folks behind Skype, this London based FX broker has Richard Branson as one of their backers.
Reasons to choose TransferWise:
- Exchange between multiple currencies
- Easy to set up an account – it only takes a few minutes.
- Full tracking of the status of your currency transfer.
- Simple to find out the exact rate your currency exchange – either online or on the phone.
FC Exchange
FC Exchange has been providing exchange services to both individuals and businesses since 2005. Based in the City of London, this broker has been featured in various British newspapers, including The Telegraph and The Times.
Reasons to choose FC Exchange:
- Free account set up with no obligation to buy currency.
- Set up regular payments/exchanges to cover items such as bills or mortgage repayments etc.
- The company secures their exchange rates well forward, meaning you’re guaranteed a favourable currency conversion even if rates fall.
- Superb customer service.
OFX
The major player, OFX, has recently changed its name from UK Forex. One of the granddaddies of the industry (they’ve been around for 17 years), they pride themselves on offering great rates, excellent customer service and speedy transactions.
Reasons to choose OFX:
- They exchange between 55 different currencies.
- Most transactions and transfers take place the same day
- They offer an excellent mobile app allowing you to arrange your money exchange and track your currency from anywhere.
- You can speak to a member of their customer support team 24/7.
Currency Solutions
Consistently ranked in pole position on TrustPilot, London based Currency Solutions are both FCA authorised and regulated by HMRC (Her Majesty’s Revenue and Customs).
Reasons to choose Currency Solutions:
- Their great exchange rates apply to small, as well as larger currency exchanges.
- You can fix a rate for an exchange to be made in the future – and you don’t have to pay until the date arrives.
- Set up regular exchanges – and know exactly the rate you’ll be getting in advance.
- Fast – most transactions are carried out within the day, and you’ll be updated through every step of the transaction.
Torfx
Award winning Torfx have been players in the FX market for over 10 years. Thanks to great rates and outstanding customer service, they’ve won the ‘International Money Transfer Provider of the Year’ and the ‘Consumer Moneyfacts Best Customer Service’ awards.
Reasons to choose Torfx:
- Ease of use. Set up an account over the phone or online (takes minutes) and then transfers can be arranged swiftly and easily 24/7.
- Torfx provide every customer with a personal account manager. This is perfect for those who prefer to deal with a ‘real’ person, rather than carrying out everything online.
- Fix exchange rates up to 2 years in advance.
- Secure and safe to use. They carry out over £3 billion in transactions per year, and are authorised by the FCA as a Payments institution.
Here are our recommendations again:
- HiFx
- Torfx
- Transferwise
- FC Exchange
- Currency Solutions
- OFX