A reader asks: I am looking to transfer around 8000 Euro into Pounds Sterling. Any ideas how I can get the best rate, either in Spain or the UK?
To be honest, for anything under £10,000 you will find it difficult to negotiate good rates with a currency broker. Especially if it is a one-off transfer. Currency brokers tend to look after corporate currency transfers and large currency transfers and have to do significant AML (Anti Money Laundering) checks when people open new accounts. Often they are required to do the same checks for small transactions as for large ones.
The best rate you would get from a currency broker for a currency transfer of around 8,000 Euros would be between 0.5% and 1%. A fee (built into the exchange rate) of between €40 and €80.
Hugo Horton from Currency Broker OFX said:
At OFX we aim to give very competitive exchange to all our clients no matter the size of their transfer.
If you did it through your bank it would be an exchange rate mark up of up to 4%, which would be up to €320. However, you would not have to open a new account or run the risk of transferring money to third parties.
Probably the best option, in this case, would be to use Transferwise, who offer flat rates of 0.35% on GBPEUR transfers. So your fee would be about €28.
The downside of this, of course, is you have to go through the process of opening an account. Transferwise is also an online-only platform so you won’t get a personal account manager to assist with any issues. Although they do have good online support.
You would need to weigh up what’s more important, time, safety or cost. Banks are expensive but safer. Currency brokers make take a little longer, but you’ll get personal service. Whilst, digital currency transfer services like Transferwise are cheaper, it is online only.
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Richard founded the Good Money Guide (previously Good Broker Guide) in 2015 and has been a broker for 20 years most recently at Investors Intelligence and previously a multi-asset derivatives broker at MF Global (Man Financial). Richard started his career working as a private client stockbroker at Walker Crips and Phillip Securities (now King and Shaxson) after interning on the NYMEX oil trading floor in New York and London IPE in 2001 & 2000.