5 reasons to use a specialist currency company over a bank when buying a French property
- Credit: Tinnakorn Jorruang - Getty Images/iStockphoto
Sending money to France to buy a property? Using a specialist currency exchange company instead of a bank could save you thousands of pounds.
For decades, people had no choice but to use their high street bank to exchange money into another currency. Thankfully times have now changed, and the consumer has other options available to them when sending money abroad.
Here are five good reasons to go with a specialist currency firm over your bank.
1. The cost
This has always been the main difference when comparing a currency company to a bank. As a general rule, banks charge 2-5% on overseas currency payments. That means they would look to profit £2,000-£5,000 on a £100,000 exchange. Currency companies would charge less than half of that, creating a potential saving of £1,000-£2,500 on just exchange rates alone.
Banks are pretty big; they spend huge amounts on overheads (staff, offices, adverts etc) and earn money through interest mainly on products such as loans and mortgages. Overseas currency payments are not their priority.
Specialist currency companies, on the other hand, are obviously much smaller in size, have low overheads and sell only one thing: currency. They buy at the exact same rate as the banks; they just profit a lot less, giving customers a better exchange rate. It's really that simple!
2. Transfer fees
It costs money to make a transfer to another currency overseas. The difference here is, most currency companies won't charge customers for it. Typically, banks will charge customers £10-£100 to transfer to another currency overseas. Some banks will offer an incentive with ‘no transfer fees’, but will make that money up by offering you a worse exchange rate.
It would take one to three days for customer funds to credit the other end when using a bank, no good for people with tight deadlines. Currency companies are built for instant credit and payment automation. Funds can be received in from a customer in pounds and credited in France in euros within two to three hours.
The other plus point here is communication and taking away the added stress of making an overseas payment yourself. A currency firm will notify customers when their money has arrived in the account, when an exchange has been made and again when they have sent euros over to France on your behalf.
3. Bespoke service
A personal service and crucial market guidance are what separates specialist currency companies and the high-street bank.
Do personal bankers still exist? Well personal currency brokers certainly do and that's exactly what you will get when partnering with a specialist currency firm. You will be speaking with someone who has vast experience in dealing with customers who were in the same boat as you. They will get to know you, your requirements, and your risk appetite to ensure you make an informed decision on what to do with your money.
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If you didn’t already know, the currency market is the biggest and one of the most volatile markets in the world. Swings of 2-3% are the norm in exchange rates every month and rates change every two seconds.
Generally, you can reach your dedicated account manager at a specialist currency company on the phone, email or even by SMS in some cases. They will be proactive and alert you when the market moves or when analysts are expecting a move.
There is constant human interaction every step of the way and they will ‘hold your hand’ through the process as much as you want. When moving large sums of money, you should be working with someone who is an expert in his or her field. Now, speak with your bank to see what they can offer you when moving money over to France and compare the two packages for yourself.
4. Currency products
The high-street bank will move customer money from account A to account B. There is no help other than that available when moving money overseas. Banks won't explain to you how to mitigate your risk when entering the currency market or offer suggestions of what you can do based on other people’s decisions.
Currency companies help you budget correctly, so you are not caught out by adverse rate fluctuations. They will work with you to hatch a plan based on what level of risk you are happy to take with your money.
They offer essential tools that your bank does not offer such as rate alerts, limit orders, hedging strategies and forward contracts. If these products are used by nine out of 10 UK businesses sending money abroad, don't you agree you should have access to them too?
5. Security matters
Finally, and probably most importantly, security. It is safer to leave your money with a specialist currency company than your bank. Yes, you have read that right! FSCS protects up to £85,000 of customer money when with a bank. If a bank were to go into liquidation and a customer had £100,000 in an account, they would lose £15,000 of their money.
By law, specialist currency companies must keep customer money away from their profit accounts and segregated into its own account, similar to an escrow account. It means if the specialist currency company goes into liquidation, customer money is safe in the separate account and can't be touched by creditors.
To summarise, the above five points will all be valued differently depending on what you want out of a currency partner. But it’s clear to see the differences in what companies like ours offer against the banks.
So, if you are planning on purchasing a property in France in the future, I would recommend you appoint a specialist currency firm beforehand.
Dan Waterman is Sales Director at Excel Currencies
Tel: 01322 221121