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Saturday, August 13, 2011

Save on Your Foreign Exchange and Avoid Hefty Bank Fees (part 1)

One of the most important yet least considered aspects of emigrating has to be changing your funds and savings into your new currency. Picking the optimum moment to change currencies can be like a game of Russian roulette. You only get one chance. If you don’t get it right, you stand to lose a significant amount.

People moving sums abroad can avoid the banks’ high rates by using a specialist FX dealers. Banks tend to charge fees each time you make a transfer and many also levy commission. In addition to the British bank’s charges, you may face further fees from the recipient bank.

There are basically four main places you can goto - tourist bureau de change, high street bank, private bank or foreign exchange specialists. Many if not all of us use high-street bank to switch money between currencies, perhaps to buy property abroad or because we work overseas and want to convert their earnings into sterling or Indian rupees or Euros and even Philippine pesos. Companies involved in all sorts of industries import or export goods. Manufactures have to import parts or export the finished goods and will need to buy or sell euros. Retailers buy stock from China or Europe. However, banks levy hefty fees on such foreign-exchange transactions, costing consumers hundreds of millions a year. The foreign exchange market is huge.

New advances in foreign exchange technology are enabling companies to make multiple payments in various currencies using a variety of payment methods. Doing business internationally has never been so easy and inexpensive. The world’s largest non-bank foreign exchange specialists are leading the way with more competitive services and pricing challenging the banks.

Currency markets constantly fluctuate, so knowing when to make your international payments can be tricky. And in today’s economic climate, it’s more important than ever to make the most of your money. Whether you are buying your Australian Dollars with British Pounds, American Dollars, Euros or any other foreign currency, it pays to shop around. A currency specialist can help you do just that. They ensure you understand all the options available and can provide expert guidance on the currency markets.

Being FX knowledgeable involves having an understanding about the different types of trades available.

Rajiv Shah
Head - Life and Pensions
Earnest Insurance Brokers