Know your exchange rates
- Credit: Archant
With many of us looking to save our euros at this time of year, Johanna Endres shares her top tips to help you get the best deal when exchanging foreign currency
1. Open a French bank account
If you can help it, avoid buying foreign currency at the airport as you tend to get a poor deal. If you’re going to be visiting France on a regular basis, it might be worth setting up an account with a bank such as HSBC, which has branches on both sides of the Channel.
2. Understand your options
When you transfer money you can choose a ‘spot contract’ (to transfer money immediately) or a ‘forward contract’ (to lock in a favourable exchange rate for up to one year).
There are also other options available, such as direct debit-driven regular overseas payments, limit orders and more. Make sure you speak to a currency expert to find out the best option to suit your situation.
3. Only deal with an established firm
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Before you go ahead with a currency exchange, ensure that the company you are dealing with is FCA-regulated and authorised.
For the safety of your money, avoid dealing with anyone operating from a PO Box address or who isn’t authorised by the Financial Conduct Authority.
4. Set up money transfers online
Dealing with your finances online can take the hassle out of exchanging your currency. You can arrange your international money transfers from the comfort of your own home with only a few easy clicks of the mouse!
5. Find out about all fees and charges
Always make sure you ask about transfer charges, fees and commissions. Many banks will charge £30 for every transfer you want to make, while foreign exchange companies may offer free money transfers with no hidden charges.
6. Learn the lingo
Getting to grips with basic currency jargon will help you understand exactly what you are purchasing. Here are some examples of the terms that are most commonly used to help you decipher the lingo:
- Sell rate: what you get when you exchange pounds
- Buy rate: what you get when you exchange your leftover foreign currency
- Interbank or bank to bank rate: the wholesale rate that banks charge each other.
7. Do your research
All currencies move quickly, so checking the price once a week is not going to help you make the strongest return.
Some currency exchange companies have tools on their websites to keep you up to date with the lastest rates and can provide tailored guidance over the telephone. n
Johanna Endres works for
Tel: 0845 389 3000