How to receive foreign currency from overseas

One of the most expensive mistakes made when it comes to foreign exchange is receiving foreign currency into your bank account. If you have funds coming in from abroad you could lose out significantly on the amount of GBP you receive if you allow your bank to manage the process.

When foreign currency is deposited into your GBP bank account the bank will generally do the conversion automatically at their standard rates.

Something else to avoid is letting the funds be converted into GBP before being sent to you, as this also results in large FX transaction costs.

Both of these scenarios mean you have no control over the exchange rate or timing of the conversion. Which could result in receiving significantly less GBP.

It makes sense to arrange for foreign currency accounts to be set up with your domestic bank, then convert funds into GBP at a beneficial rate using a currency broker.

You can also use a currency forward to lock in the current exchange rate for a payment you are expecting up to a year in the future. By using a currency forward you protect yourself against the actual currency price moving against you and can budget accordingly.