Best Currency Forward Contract Providers

Are Currencies Direct a good currency broker?

Yes, in our 2024 and 2023 awards Currencies, Direct won “best currency broker”. They scored very highly in our customer survey, with very high scores in customer satisfaction and pricing.  Currencies Direct is also a well-established provider founded in 1996 and has 22 offices around the world.

Currencies Direct offer a good service for large international money transfers. They are a well-established and competitive currency broker for buying a property abroad or for international business payments at bank-beating exchange rates.

If you need to send a large amount of money abroad Currencies Direct can give you advice on the timing of a transfer and also get you bank beating exchange rates.

I’ve been dealing with currency brokers for nearly two decades now. Initially, when I was a prime broker doing currency conversions for institutions, but also as a currency broker myself doing conversions for people buying holiday homes. In this Currencies Direct review I give our ratings based on their nearest peers, and tell you what we think of them after testing them thoroughly. Plus highlight the key costs, facts and figures of their accounts.

A friend recently sent me a WhatsApp asking me what I thought of Currencies Direct. He even included a link to our old review, so clearly, it’s time for an updated version.

Instead of long-winded musings on the currency transfer industry or AI generated SEO (or SEM, search engine manipulation as I like to call it), I thought I’d do this review as a series of FAQs about Currencies Direct to provide short and relevant answers to potential questions people who are considering using them may ask. Why you ask? Well, I’ve been in the currency markets for about 20 years, as both a wholesale currency prime broker and a private client currency broker and these are the questions that people generally asked…

This is pretty much how our conversion went when we discussed Currencies Direct over coffee later that afternoon.

What does Currencies Direct do?

It helps you transfer large amounts of money from one currency and country to another.

What about small amounts of money, is it only for large transfers?

You can send small amounts of money, but to be honest, Currencies Direct is more for larger foreign exchange transactions. A typical customer may be someone buying a holiday home with a couple of large currency transfers for the purchase and then a few recurring smaller transfers afterwards for bills etc.

But can I still send smaller amounts?

Yes, but if you are only sending smaller amounts, you are better off with a money transfer app.

Why is it better for large amounts then?

When you send large amounts of money abroad, you need to think about two things. What the exchange rate will be, and when to send it. Currencies Direct will give you better exchange rates than a bank, and you get more control over when you do the conversion.

How?

You get better exchange rates because the “spread” or “mark up” Currencies Direct charge is better than the banks. Sometimes by about 4%.

Huh?

If you send £100,000 with your bank, the exchange rate markup can be up to 4% so it will cost you about £4,000 in fees. With Currencies Direct, it should be around £250.

My bank told me there were no fees for sending money abroad.

Well yes, there are no fees charged to you as commission, but they are included in the spread.

Do Currencies Direct charge a fee?

They don’t charge additional fees. They make their money on the exchange rate spread.

What’s the spread?

The spread is the difference between where a currency broker buys the currency and where you buy the currency.

So they mark my price up rather than charge fees?

Yes, take a look at our guide on how to compare exchange rates and come back?

Ok, fine, I’m up to date. But how do I know they are going to give me the best exchange rate?

Just ask them – say verbatim “how far as a percentage will my price be from the mid-market?”. They should give you an answer as a percentage. The more money you want to transfer the lower the percentage will be.

Whatever they come back with, ask for less – remember everything is negotiable.

If they can’t give you a straight answer, just look for another currency broker that can.

No, I mean, how do I know this is the best time to convert money at the current exchange rate?

You don’t, nobody knows where exchange rates will be in the future.

What about currency forecasts and predictions?

They have educated guesses at best. When it comes to foreign exchange it’s very easy to protect yourself from losing money, but very difficult to make money from trying to predict exchange rates.

Ok, fine, but I’m buying a villa in Spain at the moment and I need to pay for it in 6 months and I think now is a good time to buy Euros. Can they help me lock in the currency exchange rate?

Yes, that’s very good question and bravo for thinking of hedging your upcoming currency exposure?

What?

Sorry, yes you can buy Euros now with a currency forward contract. You can lock in the current Euro exchange rate for up to 12 months with Currencies Direct.

Great – but, there is a bit of a snag, I am selling a UK property that won’t complete for a couple of month so can’t afford all the Euros just yet.

That’s fine, when you use a currency forward you only need to put down a small deposit on the full amount you buy. Usually around 10%.

But is my money safe with Currencies Direct?

Yes, Currencies Direct are authorised by the FCA, so they have to keep client funds separate from their money. These accounts are segregated and the money is protected if they or their bankers go bust. But unlike banks and investment accounts there is no FSCS protection.

Is it a big company then?

Yes, Currencies Direct was founded in 1996, they have over 500 employees, and processed about 550,000 payments last year, totalling £10bn. Blackstone also invested £150m in Currencies Direct.

What’s Blackstone?

They are a massive private equity firm that invests in all sorts of things, they have about $10 trillion of investments.

Ok, fine. But how does Currencies Direct work?

You open an account here by requesting a quote through their website or registering online. Then they will assign someone to look after your account who will help you with the transfer.

Do I have to transfer money over the phone or can I do it online?

You can do up to £25k online, but, one of the main benefits of using a currency broker like Currencies Direct is that you get someone to actually talk to. Most people find this helpful when transferring large amounts of money abroad.

Thanks,

Pleasure.

You may also enjoy our interview with the CEO of Currencies Direct, Marc Morley-Freer.