Advertisement feature

Guide to international money transfers

The Independent presents a simple guide to international payments from currency specialists HiFX

Whether you own a property overseas, work abroad, or make regular international money transfers for a pension or mortgage abroad, this simple step by step guide gives you all the information you need to understand how to get the most out of your money transfers, because if you don’t do your homework, you could end up losing large amounts of money in hidden fees and poor exchange rates.

Beware hidden charges

Currency fluctuation might sound like something that is only a problem for a handful of foreign exchange traders, but in today’s global economy the swinging value of the pound against the dollar, euro and other denominations is an issue for everyone and how you deal with transferring your money can make the difference between being euro-wise and dollar-foolish.

For most people regardless of whether they're based in the UK or overseas, their high street bank is the first port of call when making international money transfers assuming that it’s their best option. However, regardless of where you live in the world and what types of bank accounts you have set up, most banks offer poor exchange rates and levy a variety of hidden charges. 

At the end of the day they know that very few of their customers bother to check the rates and how much they’re paying. As a result they take advantage of a captive market and continue to cash in on our lethargy. 

But it doesn’t have to be this way and it pays to shop around for the best.

When making international payments, the costs fall into two simple areas: fees and the exchange rate. When shopping around and comparing one company with another, regardless of whether it’s your high street bank or a currency specialist, it’s important to pinpoint two things.

  • Fees - The key charges to look out for include transfer charges and overseas bank receiving fees.
  • Exchange rates - many banks claim to be ‘commission free’ then load the exchange rate. It’s also difficult to get hold of the exact rate and compare it, as some providers simply don’t provide the information.

Getting the most for your money actually boils down to a very simple question: “How many euros/dollars/Swiss francs/pounds will I receive for my money, after all charges?”

The exchange rate is the rate at which banks and brokers buy and sell money to each other. Private individuals and small-to-medium-sized businesses cannot access these rates. Remember exchange rates often change by the minute, so to compare providers properly you need to do it one after the other.

How are exchange rates calculated?

The rate you are offered will be dependent upon a number of factors including

  • The amount of money you are transferring
  • The time-frames you are working to (i.e. whether you are looking to lock into an exchange rate for up to 12 months)
  • The currencies you are buying and selling and the volatility of those currencies
  • The exchange rate levels at the time of purchase

How to find the best deal

For larger bank-to-bank international money transfers, i.e. £250 and over, it pays to compare your high street bank’s exchange rates with those offered by some of the many currency specialists that exist.

Typical reasons for making international transfers include

Whatever your currency exchange needs, let the experts at HiFX provide you with all the help and guidance you need to get the best rates possible when moving your money overseas. It’s easy to sign up, free, can be done 24 hours a day online and you get all of these great benefits;

  • The ability to move money, pay people or bills in seconds.
  • Faster transfers ensuring your money arrives on time, every time, when you need it.
  • Online account management available 24 hours a day, 365 days a year. Get quotes, make transfers and track payments wherever you have access to the Internet.
  • Norton security used by 97 or the worlds top 100 banks giving you complete peace of mind.
  • A brand you can trust. HiFX is authorised by the Financial Conduct Authority under the Payment Services Directive 2009, registration number 462444.
  • Access to over 800 currency pairs and a range of currency options including the ability to fix the exchange rate for up to 12 months into the future so you can protect yourself from adverse currency moves.
  • Consistent bank-beating exchange rates saving you money on each and every transaction.

See how much you could save with HiFX: sign up and make a transfer

How much will I save if I use a currency broker rather than my bank?

On average the amount saved by using a currency specialist rather than your bank could be between two to four per cent. So on €100,000, this could equate to a saving of €4,000 on the exchange rate alone.

It’s also worth remembering that due to their branch networks, the high street banks have to set their exchange rates once or twice a day. To make sure they remain profitable they have to increase the spreads to allow for intraday exchange rate volatility. Brokers give clients access to live rates saving you money.

How quick is it to use a currency specialist?

By using a currency company you’ll also avoid international banking fees, which vary from bank to bank, and your money will get there a lot faster. 

The transfers will in most cases be free and transferred either same day within one to two working days depending on where you’re sending the money.

Timing can mean everything

Depending on the amount you’re sending, the timing of a transaction can also be important particularly if you’re sending larger amounts.

In many cases, people don’t pay much attention to what’s happening to the exchange rate and simply leave their decision to make the international money transfer to the last minute hoping for a good rate, assuming, that without all the funds available, there isn’t much they can do.

Regardless of why you’re transferring your money, the larger the amount you’re looking to move overseas, the more important it is to maximise the timing of your transaction and minimise the risk that the exchange rate could get worse and make your money worth less. Remember, as soon as you decide to move overseas or buy and sell an asset abroad such as a property, you are exposed to adverse moves in the currency market.

How to choose a currency specialist

It’s important that you undertake the following checks when choosing a currency specialist:

  • How long have they been in business?
  • Are they authorised by the Financial Conduct Authority (FCA) under the Payment Services Regulations 2009? Companies that are authorised by the FSA have had to meet strict capital adequacy and business practice rules, comply with Payment Services Regulations and the FCA’s Conduct of Business requirements.
  • Are they registered with HM Customs as an overseas money service business?
  • Do they hold your money in segregated client trust accounts? Your funds are held separately from company funds protecting it from creditors.
  • Do they have audited accounts on their website and how strong is the company’s balance sheet?
  • Do they have professional indemnity insurance protecting customers from staff fraud, etc?
  • How many staff do they have and what turnover? Obviously a large established company is more reliable than two guys in a back room, though it’s no guarantee.
  • Do they have direct access to SWIFT? SWIFT is the world’s largest payments and settlements network for domestic and international trades. Direct access ensures you, the client, benefit from faster payments and enhanced security.

money transfers

HiFX customer reviews
Fishing for votes with Nigel Farage: The Ukip leader shows how he can work an audience as he casts his line to the disaffected of Grimsby

Fishing is on Nigel Farage's mind

Ukip leader casts a line to the disaffected
Who is bombing whom in the Middle East? It's amazing they don't all hit each other

Who is bombing whom in the Middle East?

Robert Fisk untangles the countries and factions
China's influence on fashion: At the top of the game both creatively and commercially

China's influence on fashion

At the top of the game both creatively and commercially
Lord O’Donnell: Former cabinet secretary on the election and life away from the levers of power

The man known as GOD has a reputation for getting the job done

Lord O'Donnell's three principles of rule
Rainbow shades: It's all bright on the night

Rainbow shades

It's all bright on the night
'It was first time I had ever tasted chocolate. I kept a piece, and when Amsterdam was liberated, I gave it to the first Allied soldier I saw'

Bread from heaven

Dutch survivors thank RAF for World War II drop that saved millions
Britain will be 'run for the wealthy and powerful' if Tories retain power - Labour

How 'the Axe' helped Labour

UK will be 'run for the wealthy and powerful' if Tories retain power
Rare and exclusive video shows the horrific price paid by activists for challenging the rule of jihadist extremists in Syria

The price to be paid for challenging the rule of extremists

A revolution now 'consuming its own children'
Welcome to the world of Megagames

Welcome to the world of Megagames

300 players take part in Watch the Skies! board game in London
'Nymphomaniac' actress reveals what it was really like to star in one of the most explicit films ever

Charlotte Gainsbourg on 'Nymphomaniac'

Starring in one of the most explicit films ever
Robert Fisk in Abu Dhabi: The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers

Robert Fisk in Abu Dhabi

The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers
Vince Cable interview: Charging fees for employment tribunals was 'a very bad move'

Vince Cable exclusive interview

Charging fees for employment tribunals was 'a very bad move'
Iwan Rheon interview: Game of Thrones star returns to his Welsh roots to record debut album

Iwan Rheon is returning to his Welsh roots

Rheon is best known for his role as the Bastard of Bolton. It's gruelling playing a sadistic torturer, he tells Craig McLean, but it hasn't stopped him recording an album of Welsh psychedelia
Morne Hardenberg interview: Cameraman for BBC's upcoming show Shark on filming the ocean's most dangerous predator

It's time for my close-up

Meet the man who films great whites for a living
Increasing numbers of homeless people in America keep their mobile phones on the streets

Homeless people keep mobile phones

A homeless person with a smartphone is a common sight in the US. And that's creating a network where the 'hobo' community can share information - and fight stigma - like never before