If you’re looking for better exchange rates and cheaper overseas payment options, then a currency exchange broker could be for you. Better still, their services are open to individuals as well as companies.
When we go overseas for business or on holiday, most of us will stock up on foreign currency from a bank, a post office or a bureau de change.
But surprisingly few of us get our money from a currency exchange broker – either because we don’t know about them, or we don’t know how to access their services.
If you haven’t used a currency exchange broker before, you could be missing out on big savings. Because brokers deal directly with currency markets, they can often offer you better rates than you’ll find elsewhere.
That’s not all. Depending on whether you need currency for your personal or business activities, currency exchange brokers can offer you a range of additional benefits.
We take a look at some of them for you.
Benefits for individuals
Lower exchange rates provide the biggest advantages for individuals, especially as a weak pound has slashed our spending power in most countries.
Where banks typically take 2% commission on transactions and may charge £25 per transfer, currency exchange brokers like TorFX are able to offer currency transactions at 0% commission with no attached fees – beating the bank rate by as much as 5%.
The lower rates offered by currency brokers can help you make significant savings when taking money abroad or bringing it back to the UK.
And this doesn’t just apply to holiday money – you can make substantial savings if you plan to buy property abroad, repatriate funds, make regular overseas payments or even emigrate.
Benefits for companies
If your company needs to exchange large sums of money, the fluctuation of the exchange rate can pose a significant risk to its cash.
Currency brokers can help your company limit this risk via a number of methods.
- Forward contracts. These allow companies to fix the exchange rate up to two years before a future trade – so they can take advantage of periods when exchange rates are more favourable.
- Limit orders. These allow currency to be bought at a pre-determined level. The exchange rate is monitored and the currency is automatically purchased when the required rate of exchange is reached.
- Stop Loss orders. These help protect a company’s money from significant fluctuations in the exchange rate. They do thus by setting a minimum or maximum exchange rate at which the currency will automatically be traded to avoid further depreciation.
As specialists in currency trading, brokers can also provide up-to-date market information and monitor markets on behalf of clients in order to alert them to risks and opportunities.
How risky are currency exchange broker services?
Currency brokers are regulated by the Financial Services Authority under the Payment Service Regulations 2009. The ensures a clients’ money is kept safe, a predefined level of capital is maintained at all times and stringent risk management procedures are in place.
Finding a currency exchange broker
The best place to start your search for a currency exchange broker is online, although be sure to ask around for any recommendations from friends and colleagues.
At MoneyHighStreet.com we usually use TorFX, which is a UK-based currency exchange broker. TorFX offers all the services we’ve discussed above, but the real clincher is the highly competitive exchange rates it can provide you with.
And remember – currency exchange brokers don’t only deal in huge sums of money. So whether you just need cash for a holiday or want better rates for your business, take a look at what the brokers offer. You could save thousands.