International Money Transfers
This guide to International money transfers is designed to give you access to all the information you need to save money and get highly competitive exchange rates when transferring money to and from the UK.
If you want to transfer money abroad, a foreign exchange or currency broker can be a good option. A foreign exchange broker often won’t charge fees, and may also offer a better exchange rate than a high street bank. But how exactly does it all work?
Perhaps you want to send 10,000 euros to France, as a deposit on a French property purchase. You’ve contacted your bank but the service is expensive. You’ve also checked out a money transfer firm but, again, the charges are high. You therefore decide to save money on your international bank transfer by using a foreign exchange broker.
Set up an account
The first step to sending money abroad with a broker is to register to set up an account. A dealer will then usually contact you to discuss the transfer. If you’re happy with the costs and exchange rate, you can book the transaction, give details of the recipient’s account and pay the agreed amount, typically by electronic transfer from your UK bank account.
Once the broker has received the funds, they will send the currency electronically to your beneficiary. The whole process shouldn’t take more than one or two days, although this does depend on the currency – popular currencies such as euros or US dollars will be quicker, while less familiar ones may take slightly longer.
Foreign exchange brokers typically do not charge a fee for transfers of more than £3,000. They also generally offer better exchange rates than the high-street banks.
It’s common for banks to charge a fee on top of an international bank transfer, which could be as high as £40.
If you tally up how much you can save by avoiding fees, plus any money you save thanks to a better exchange rate, you might find that a currency broker is the more affordable option.
Types of transfer
There are normally three types of transfer, and you can select the one that best suits your needs and time scale. These are:
- Transfer at the current exchange rate. Sometimes called a spot deal, this is the quickest and most straightforward option as you simply send the funds immediately at the today’s rate of exchange.
- Forward contract. This lets you lock-in today’s exchange rate, but allows you to transfer money at a chosen date in the future.
- Limit order. This is when you nominate your ideal exchange rate, and as soon as the rate is reached, the funds are transferred. This isn’t appropriate for small amounts, and often the minimum value is £30,000.
Forward contracts explained
A forward contract can seem appealing if you don’t want to have to worry about exchange rate movements, or if you expect the rate to get worse. Remember, however, that currencies can be volatile and there is the risk that the rate could move against you.
The exchange rate on a forward contract is calculated by adjusting the current rate for so-called “forward points”, so is not the same as the current exchange rate. Your broker should explain the terms and conditions of the contract, but it’s worth making sure you understand the cost before you go ahead.
You do not have to pay the full price of a forward contract up front, though you will normally have to put down a deposit, with the rest due on the transfer date.
Foreign currency brokers can usually arrange regular payments to whoever is receiving money from abroad, perhaps to cover a foreign mortgage or school fees, for example. The minimum payment tends to be about £500.
Security is paramount if you’re sending money abroad, so you should always check that your broker is authorised or regulated by the Financial Conduct Authority. The firm must then operate within certain guidelines to safeguard consumers.
Ideally, the firm should offer the protection of the Financial Services Compensation Scheme, so you are guaranteed to get your money back if something should go wrong.
The cost of international money transfers varies from broker to broker. MoneySuperMarket’s free independent comparison service allows you to quickly and easily compare the deals on offer from all the major currency brokers, so you can make the most of your money.
The list of brokers above is ordered in alphabetical order. Make sure you read the ‘great for’ and ‘be aware’ points for an honest, transparent overview of the broker’s advantages and limitations – and always check the small print before you commit to an international transfer.
How our site works
We want to show you options for foreign money transfers from as many different companies as possible, so you can choose the right one for you. But some companies don't want to be included on comparison websites, so we can't promise to show you every single one.
We do not offer a comparison service for this product, so instead we show you a list of deals that we have compiled using information given to us by the providers. Find out more about how we work.