There comes a time when we want to move our money around. That is the very nature of money.
However, sometimes we want to move our money between countries. The reasons can be varied, and the amounts can vary too.
But at some time, you will come across the need to move money from one country to another.
The thing is, this is one of those things that most people don’t do often, so when they do have to do it, they are suddenly thrust into a strange world of exchange rates, commissions and governmental rules and regulations.
If you can, read reviews on as many sites as you can, including reviewsbird.co.uk and take extra care when moving money internationally.
Many different finance companies offer money transfer services and you should choose very carefully before you decide to move your money.
Each currency that is tradeable on foreign exchanges is done so by comparison with other currencies. Each pair has a rate, known as the exchange rate. This rate lets you know how much of the other currency that you can buy with the base currency.
For instance, the GBP/USD pair is a very common pair that most people will be aware of. The base currency in this instance will be GBP, and the currency that it is being compared to is USD. At the time of writing, the rate for this pair is 1.4000.
That is the mid-market rate. That means that every GBP will buy 1.4000 USD.
What You See Is Not What You Get
Beware. That number is not what you are going to get. If you have some Pound Sterling and you’re transferring to Dollars, you won’t be able to multiply by 1.4 and find out how much you receive.
You see each currency pair has what’s called a spread. This is the difference between the bid and the ask – the buy and the sell price. The mid market price of 1.4 sits in between these two.
You’ll need to check carefully, as each exchange broker will have a different spread.
Then you’ve got commissions, which will be applied to the trade as a percentage of the total amount being exchanged.
It doesn’t end there – add to that an exchange fee and possibly a receiving fee by the end bank and you are looking at a hefty cut from your initial lump sum.
For simplicity, you may find it easiest to go into your bank and ask them to take care of the transaction for you.
This can cut out a lot of the calling around and dealing with brokers.
You won’t get the best rate, but if you are moving money from some more difficult to access countries, or if you just want to simplify the process, then this may be the best way to go.
Many brokers out there are going to require you to move your money into one of their accounts prior to exchange. Make sure you’ve done your homework and that you trust these people with your money!