Today's guest post comes courtesy Peter Lavelle at foreign exchange broker Pure FX.
Moving abroad is fun, but there are practical matters, too.
Photo by Tristan Martin
After all, if you intend to buy a foreign home, you’ll likely be making regular transfers from a domestic bank account to a foreign one. If, on the other hand, you simply intend to move without buying a place, you may want to transfer enough money to see you alright for the first few weeks, until you’re settled in.
Given all that, what should you be thinking about from a foreign exchange perspective?
What service should you use?
Generally speaking, there are three factors to consider when deciding what service to use to transfer your money abroad. These are: the quality of the service, its security credentials, and the exchange rates on offer.
- Service. When you transfer money abroad, you’ll likely be assigned an individual dealer to help you through the process. Given this, it’s important to ask: are you happy with the person you’re talking to? Does it seem like they know what they’re talking about? If not, you may wish to go elsewhere.
- Security credentials. Is the service licensed and registered to transfer money abroad? In most countries, there’s a government authority responsible for regulating money transfer services. If your service doesn’t belong to and adhere to its legal requirements, you could be putting your money at risk.
- Exchange rates. What exchange rate does your service provide? To make sure it’s the best it can be, it’s worth comparing the rates available from different providers. High street banks, for instance, are notorious for providing rates up to 4.0% worse than those from dedicated dealers.
Where your exchange rate is concerned, there are two things you should keep in mind. The first, as I’ve already mentioned, is the rate available from your provider. However, you also need to look at what’s happening on the foreign exchange market itself.
- Consult Google for the exchange rate. To use Google to find the current exchange rate, just enter the currency codes of the currencies you want to exchange. If that’s US dollars to UK pounds for instance, enter USDGBP. Google will then deliver the latest rate.
- Look as far in advance as you can. Once you’ve decided to move abroad, look at transferring your money at the earliest opportunity. This is because, the more time you give yourself, the more time you have to examine the rates, instead of being stuck with whatever’s available at the last moment.
- Set reasonable expectations. If you’ve not looked at the exchange rates in a long time, chances are they’ve changed a lot. However, instead of waiting for them to change back, look at where they’ve been the last three months, and set your expectations based on that. You’re less likely to be disappointed.