If you are receiving large amounts of money from overseas, you could save money by using a currency broker to handle your transaction. They offer much better exchange rates than high street banks, give you control over the timing of the transaction, do not charge fees on top and can help advise on hedging your currency exposure to minimise losses against adverse fx price movements.
Compare exchange rates for receiving currency from abroad
Top tips for receiving large amounts of money from overseas
Using your bank when you receive money from abroad can be very costly as you have no control over the exchange rate, timing of the conversion and whilst small relative to the foreign exchange rate costs there are usually various administrative costs to pay when receiving large amounts of money from overseas.
Here are our top tips to reduce costs when receiving large amounts of money from overseas.
Always compare quotes to get the best exchange rate when receiving currency from abroad
A currency broker can offer exchange rates that are far better than any bank will offer. For example conversions around £100,00 equivalent, this could mean receiving at least £4,500 when funds arrive.
To get a quote and see how much money a currency broker can save you when receiving large amounts of money from overseas you can compare currency transfer services here.
Timing the transaction
One of the biggest issues with receiving money from abroad is that currency prices move all the time and misjudging the transaction time can have a serious impact on how much money from abroad you will receive.
For example, if you are receiving EUR 500,000 a difference of just 3% in price amounts to EUR EUR 15,000.
It’s not difficult to get some market timing advice when dealing with a currency broker. Banks don’t usually allow their clients to set limits, work stops or stop entries, but with a currency broker you can set your ideal rate or take a little risk if you think the currency will move more in your favour.
Hedge your risk with a currency forward
If you know you have a set amount of foreign currency coming in at some date in the future and that currency is for a GBP purchase then the sensible thing to do is to lock in the current exchange rate for that future date. This can be done with a currency forward contract, which means you put down a small deposit of the total value of the trade as a deposit, then only pay the balance when it settles.
So for example, if you have $500,000 coming in from America at today’s rate (1.26) that is £396.825. However, if the currency moves against you to 1.40 then that $500,000 will only be worth £357,142 – which means by not hedging your currency risk you have to come up with another £40k to make the same purchase.
To find out more you can read our guide on preparing for a large foreign exchange transaction here.
Repatriation of funds
If you need to bring a large amount of money back to the UK from abroad use a currency broker to make sure the funds arrive cheaply and quickly.
The major pitfall of repatriating funds back to the UK is the exchange rate provided by your bank.
For example if you are sending Euros from a European bank to your GBP bank account in the UK through the banking system you will have no control over the timing of the transaction or the exchange rate.
Your European bank will send Euros to the UK bank and that will be converted into GBP at the banks standard exchange rate set for the day.
But if you use a currency broker to convert the Euros to GBP, you have complete control over both the timing of the conversion and therefore the rate at which is gets done.
You can also request quotes from all the brokers at the same time here. Fees relate to how far exchange rates are from the mid-market. Learn about how brokers are ranked…
Receiving currency from abroad FAQ:
You can use our comparison table of currency brokers to compare quotes but make sure you ask athe broker this simple question: “What is your mark up on the conversion?”
You can read our guide on how to compare exchange rates here. It explains why currency brokers and foreign exchange specialists offer much better rates than banks, plus the importance of personal service.
There shouldn’t be any extra fees involved other than the exchange rate. All fees should be included in the exchange rate which will be a fixed % from the mid-market.
Only by bank transfers as currency brokers deal in large amounts and due to money laundering regulations funds must be sent from a bank account in the account holders name.
You can transfer money same day or lock in an exchange rate for up to a year in advance with a currency forward.
Payments can be made the same day so as soon as your foreign funds arrive in we can send them out in your home currency.
What is the cheapest way of receiving large amounts of money from overseas?
The cheapest way to receive large amounts of money from abroad is is to use a currency broker.
Yes, here are 3 reasons why using a currency broker for repatriation of funds is better than using the banks. Here is why using your bank is one of the most expensive ways.
- Get better exchange rates – If you are receiving a large amount of money from abroad then a currency broker will provide a much better exchange rate than your bank. If you send USD to your GBP bank account then the bank will do the conversion automatically at very poor exchange rates. You may get a letter some days later telling you what rate it was, but that’s about it. By using a currency broker for receiving a large amount of money you could be thousands better off.
- Fixed and transparent pricing – As currency brokers specialise in foreign exchange they are able to provide fixed and transparent exchange rates. This means that when you do a conversion you should see the live mid-market price and also your exchange rate when you trade.
- Convert funds when you want to – If you have a large amount of foreign currency coming in from abroad you can have complete control over when you do the conversion. This means that not only do you control costs but you also control the price at which you execute your large currency conversion. In fact with the use of currency forwards (which most banks don’t provide) you can also do a conversion before you have the money to send up to year in advance. So you can lock in favourable exchange rates and not worry about the exchange rate moving against you.