One of the challenges of living in one country and having money in another is the need to send money between countries at the best possible rate - both best exchange rate and lowest bank or transfer charges.
This problem affects many Brits in France who are, for example, buying property in France with the proceeds of a UK sale, receiving a pension paid in the UK, or receiving other income in the UK (eg very often people pay for their holidays in our gites in pounds rather than euros, which we then need to transfer to France).
Despite living here for quite a while we still haven't really found a great solution for sending money to France from the UK. Direct transfers between two bank accounts should be among the cheapest - and our bank often tell us they are - but by the time the banks have finished imposing their various charges and giving a poor exchange rate this isn't usually the case.
In fact, the 'cheapest' way for us often seems to be to simply pay a sterling cheque into our French bank account. This has the advantage of also being the easiest method! Still, I am aware there is a whole world of money brokers and money transfer specialists operating who reckon to get you the best rate possible, but I've always avoided these for a couple of reasons:
1) I don't like putting significant amounts of money in the hands of a company I know nothing about - are they going to go bust while they have my money? If so am I covered against the risk? (Most are covered by the FSA so this risk perhaps only exists in my head, not in reality)
2) My own banks will doubtless still find a way to impose charges when the money gets deposited into my account, leaving me no better off than before.
3) Being a distrusful type, I assume that if they quote lower 'bank transfer charges' they will probably give a worse exchange rate so I'll end up no better off.
Of course, there is a danger that being so cynical is costing me the price of a night on the town , so I took a look around at the options and found an interesting site called sendmoneyhome that compares many of the available options for transferring money to France, and appears to be a good starting point for deciding how to make a transfer.
To get a comparison on their site I used a transfer amount of £5000, and looked how many euros I could expect to receive (screenprint below). Apparently a bank - bank transfer will give me about 5,370 euros while a broker will give me 5,700 euros.
Wow, that is a big difference, I wonder if it's correct or the website just hasn't been updated recently? This large difference is because (according to the figures quoted by the send money home site), the banks are using an exchange rate of 1.0787 and the brokers are using 1.143. The 'real' (BBC) mid-rate at the moment is around 1.15 and even paypal will give me 5,618 euros for my £5,000 (at a rate of 1.123), so my guess is that the rates on the site are momentarily wrong - if they're not it's a shocking difference!
So after my researches I'm still not quite sure whether there is a big difference on 'small' transfers (if I was moving £500,000 to buy a house I'd spend a lot more time researching, because the difference will be more important) or whether the banks really do offer such a bad exchange rate, or which method, on average, I should use to transfer money from the UK to France.
Does anyone have any better suggestions for making these transfers, a consistently good value method that doesn't involve hours of research each time?
tom cupples January 30, 2010 at 3:42 pm |
Hi – just a couple of views about Forx and thanks for the table – very useful although when I tried to find TorFX their website wasn’t there ??? Anyway – I’ve had an Abbey (National) UK current account for years and when they opened an offshore facilty (Abbey International)with sterling, dollar and euro accounts, I found I could do an online transfer between my UK account and my offshore sterling account. I then call Abbey International and agree a rate for changing sterling to euros – usually it’s slightly over 1% of a reduction over the given bank rate so on a mid-rate above of 1.15 (euros for sterling) I’d get 1.1343. I can then do an online transfer of my euros to my French bank account. It’s all incredibly easy and you are in 100% control at every step of the way.
My friends however swear by their Nationwide account whereby they use a card in French ATM,s, don’t pay any charges and claim to get a great exchange rate.
Johnny Norfolk January 30, 2010 at 3:57 pm |
This is just the sort of thing the EU should have sorted out, but no they prefere to interfear in our daily life with things that should not concern them. I see the EU of standing on the way of progress whilst the rest of the world leaves us behind. Just what have they done for the ordinary people, answers on a small post card please.
Boris January 30, 2010 at 4:42 pm |
Sounds like a good approach Tom, and we even have an online UK Abbey National account already so perhaps worth investigating. Do multi-currency offshore accounts have large charges involved – monthly fees etc? We also have a UK current account (RBS) and pin card – I never bothered looking what rate and charges we actually get when we simply withdraw money using the card in France or pay for our groceries with it. Worth a try at least, sometimes the most obvious really is the best.
Johnny, last year some Irish people paid for their stay here with Euros from an Irish euro bank account – Credit Agricole France charged us the same as if it was an overseas deposit because they weren’t ‘euros from France’, about 20 euros charge I think. The miracle of the single currency is less miraculous than you might expect. That is something the EU should have sorted out.
Johnny Norfolk January 30, 2010 at 9:17 pm |
Why am I not suprised.
tom cupples February 2, 2010 at 12:55 pm |
Boris – there are no charges for having an Abbey offshore account and the fact that the international ‘division’ have a UK-type sort code means you can transfer to it as you would transfer to a normal UK bank – not sure if it’s supposed to work like that but it does.
As for charges – Abbey International charge €30 for transferring out electronically (so I only do it for reasonably large sums) and then the Credit Agricole charge for receiving the euros – also about €30.
Boris February 2, 2010 at 1:36 pm |
I’m not sure how the exchange rates would compare, but when we just pay a sterling cheque into Credit Agricole we pay their charges (30 euros sounds about right) but we don’t pay anything to RBS (the sterling acount) so I’m not sure who does best – of course on bigger amounts the exchange rate becomes much more important than the ‘fixed’ bank charges so the sums are different again.
Mary February 3, 2010 at 8:29 pm |
We’re using MoneyCorp. They have been really efficient, we’ve got good rates and as they credit the money straight into our French account we’re not anticipating any charges. Mind you, we’re new to all this (completed the French house purchase on Monday) so we might be wrong.
Blathnaid February 3, 2010 at 10:13 pm |
I swear by Nationwide, cash out on card, into CA account, great rate.
You are right about ‘foreign’euros, my sister -Irish, sent me some cheques and CA has charged each time, saying they were not French!!!
She is now under orders for cash only payments now!
Boris February 4, 2010 at 6:49 am |
So that’s two votes for Nationwide – I wonder if they will let me open an account as I live in France, UK banks and building societies usually say their accounts are for UK residents only. Their terms and conditions don’t seem to mention UK residence but their application form insists on a UK type postcode etc…
Mary, that sounds good with MoneyCorp, hope all works out well. Can I ask, did you look at various options and then choose MoneyCorp, or did they look suitable straightaway?
Geoffrey Coan February 18, 2010 at 5:09 pm |
Great tip, thanks.
I’ve used Moneybookers for the last 5 years to transfer money from our UK bank account to them, then onto my French account. I’ve not had any problems and felt that their exchange rate was pretty good, and the transfer fees (usually about €1.30) were fair.
Looking at the sendmoneyhome table it shows an interesting story. For smaller amounts (such as £1000) it looks like Moneybookers is up there as being one of the best options as their fees are low.
But for larger examples like your £5000 transfer then MB loose out and you don’t get such a good rate at all.
For me I’m usually only transferring over a thousand or so to pay utility and taxe bills so looks like I’ve made a reasonable choice.
I also give a vote for Nationwide. If we run out of euros in our French account when we’re over on holiday we use our ATM cards for withdrawals, and has been said earlier, it’s fee free in Europe.
BUT I’m not convinced that the Nationwide exchange rates are the best. If you can plan ahead it’s probably better to go via a specialist money transfer company.
Chris February 22, 2010 at 11:45 am |
Aah, if only UK would change to Euro … everything would be so much simpler. I’m lucky in that my non-French accounts are in Euro countries, so transfers are quick (1-2 days) and free. I’ve been reading about SEPA, to which UK belongs, but it is not clear to me how that will improve the situation for GBP-EUR transfers. http://en.wikipedia.org/wiki/Single_Euro_Payments_Area
Wendy August 15, 2010 at 10:01 am |
I was also nervous, but someone advised me to use a UK company called HiFX, which I did a few times, and it worked out really well. They gave me a much better exchange rate than the bank offered, and guarantee that they will cover any charges made by the receiving bank if there are any. I also found them to be very thorough and professional. http://www.hifx.co.uk +44(0)1753 859 159
Paul Chapman February 20, 2011 at 2:23 pm |
This is a really interesting article. Transparancy and getting the best exchange rates is often very opaque in this industry. I am the editorial manager at FX price comparison site http://www.mycurrencytransfer.com and we, very much like SMH, compare foreign exchange rates. This is done by comparing FX brokers. Article is with the full intention of providing insightful advice, and not advertising!
It is important to note that on sites such as MyCurrencyTransfer and SMH, the quote is purely a guide rate and indicative. It is only when you open an account with a foreign exchange specialist that you will have access to live, final dealing rates. This is not to say all rates published on comparison sites are not useful. We apply an average margin off interbank that brokers would likely take on a transaction.
As has been commented above, comparison sites can be really useful when looking to send money overseas. Certainly as a first port of call, it is useful shopping around.
Hope this helps
Paul Chapman – Editorial Manager – MyCurrencyTransfer.com
Paul Cheesman April 15, 2011 at 3:46 pm |
Banks will generally charge a transfer fee when sending money abroad, which is why most people resort to independent currency brokers. Just be sure that when choosing the right broker that they are both FSA regulated and have a decent complicance department.
You can be sure that a company with those attributes will be trustworthy and a good broker to work with when sending money abroad.
If you want the best rates, i would go with a company that has an in house team that will watch the markets live, so as to give their clients the best rates possible.
Boris April 17, 2011 at 5:27 pm |
Hi Paul, I worked a long time in investment management and often closely with compliance departments – but how would someone external to a company know if they had a ‘decent compliance department’?
Paul Cheesman April 18, 2011 at 9:44 am |
Hi Boris, If an independent broker doesn’t have a backoffice that deals with compliance, then i would take caution for anyone using their services as there generally has to be checks put in place in order to prevent money laundering and scams.
The best way to find out is to look and see if an independent broker is registered with HMRC, as well as being FSA approved.
Boris April 18, 2011 at 9:55 am |
Thanks for the advice!