Do you want to know how you can save money buying a French property?
PUBLISHED: 09:52 23 October 2018
Why your trusty high-street bank might not be the place when it comes to getting the best currency deal
Why should I use a currency specialist?
In a few simple words – to save money. When buying a French property, one of the most important, but often overlooked, considerations is how you will transfer your funds. Many buyers take what appears as the obvious option to make the transfer, their high-street bank. From our research, one in three people still don’t realise that there is an alternative to their bank for currency exchange. But being at the mercy of poor exchange rates, slow payments and unnecessary charges is a thing of the past.
How can a currency specialist give me a better rate?
It’s all they do. The only service a currency company provides is currency exchange, whereas banks focus their efforts on other markets such as mortgages, loans, insurances etc. A bank typically sets their exchange rates in the morning with a wide margin to ensure they always make a profit, no matter the fluctuations during the day. A currency specialist uses live rates and therefore works on much smaller margins with the client. Whether you’re transferring is a large lump sum or ongoing amounts for mortgage payments, living costs, pensions etc, the result is the same: you are guaranteed to save money using a currency specialist over your bank.
Is it safe?
Yes, 100% safe and secure. Currency specialists are regulated by the Financial Conduct Authority (FCA), primarily to oversee that when you transfer your funds through a currency specialist, your money is held in a segregated client holding account. This means that all your funds (regardless of the amount), will be protected until they reach your beneficiary bank account. (This protection should not be confused with your bank’s FSCS compensation scheme, as that only protects up to £85,000 of your money.)
When should I set up an account?
As soon as you decide to buy a property in France. Once you open your account, you’ll have access to the expert knowledge of a personal account manager, as well as the numerous resources and tools that can help you plan your transfer at the best time, minimising your risk and maximising your funds. Even if you open an account and never use it, you won’t be charged as you’re under no obligation to trade. Some companies run competitions and offer new customer sign-up bonuses, so keep an eye out for these incentives.
What’s a forward contract?
This is a ‘buy now, pay later’ product –with a small deposit you lock in an exchange rate for a date in the future. This is great if you don’t want to use all your disposable income or just don’t have the full amount available yet. It will allow you to plan your budget, knowing exactly how much you’ll spend and receive in both currencies.
What’s an e-wallet?
Some providers have an online platform that will give you an account with a built-in e-wallet feature, which allows you to hold multiple currencies at the same time; ideal if you have not opened a foreign bank account yet. If the exchange rate isn’t favourable before you purchase your property, you can still deposit your funds in GBP and leave it there until the rate improves. On the other hand, if it is favourable, you can purchase your euros now and leave the balance in your E-wallet until you are ready to complete your purchase. This type of account is not available at your high-street bank.
Dan Waterman is the General Manager of Excel Currencies UK