I recently had to move some British pound to Australian dollars. Moving a significant amount of money overseas is a nerve wracking prospect.
Scammers are getting more sophisticated, and fooling so many people each year. If you are needing to move some british pound to AUD, you are right to be cautious and do some research of the companies involved.
Foreign Currency Exchange Rate
As I am sure you are aware, the currency exchange rate fluctuates on an hourly basis. Therefore, ideally your transfer will occur when the original currency is strong versus the recieving currency. In March 2020, one British pound converted to 2 Australian dollars.
Making a Currency Exchange Forecast
But predicting the movement of currency is unreliable. Forex traders attempt to trade currencies, taking advantage of the volatility in currencies to make profits. Only 10 -20% of retail forex traders succeed in making a profit (before tax!).
Forex traders are, presumably, examining charts and data trying to predict which way currencies are going. If they get it wrong the vast majority of the time, it’s unlikely casual currency converters are going to get it right.
When the British pound is above average when you want to exchange currency, make the exchange pronto. If it’s below average, it’s up to you if you want to wait and see if the situation improves. You could be waiting a while!
Companies that Offer Currency Exchange
There are a plethora of companies and banks offering to transfer currency. They may charge commissions, and a “spread” (difference between the buy and sell price). The most expensive way to transfer currency is using one of the big four banks.
As with buying ETFs, don’t be fooled by “fee free” claims, the company is making money somehow, find out how.
Different fee structures are better at different sizes of transfers. This handy comparison site helped me choose TorFX for my currency transfer.
The Problem with Comparison Sites
But be aware, comparison sites are paid commissions. They may recommend a particular company for a better commission.
If you are transferring money to or from the US or New Zealand, this independent government site compares the options. If you are transferring money to or from India, Indonesia, Vietnam or the Phillipines, there is an independent government comparison site here. Both of these sites are not paid commissions for recommendations, unfortunately there is not similar for UK transfers.
Factors in Choosing a Currency Exchange Company
You will want to understand how the company transferring currency handles changes in the exchange rate. Is the exchange rate fixed at the point at which you agree to the transfer? Or, does the transfer occur at whatever is the rate at the time of the transaction.
You will also want to know how quickly the company can transfer the money.
Are You Relying on Someone Else Sending or Recieving the Currency? How Tech Savvy are they?
Do you need someone to move the money for you in the UK? If the money is coming from your aged parents, can they use the online banking system? If they are going to struggle, it is worthwhile using a company that allows them to transfer the money into an account in their own country, and the transfer company handles it from there.
A few years ago I transferred some cash from my UK account (I couldn’t organise transfer overseas from overseas!) to my parents and asked them to organise an international transfer. They somehow transferred the money to a fictitious account in the wrong country. Eventually, I did recieve the money in Australia, after incurring multiple rounds of international transfer fees!
Check the Actual Company Website
The company involved should have an Australian Financial services license, and a good number of online reviews to assure you they are genuine.
Then you can also check Scam Watch to make sure the company aren’t flagged as scammers.
I have used Transferwise in the past, too long ago to remember much detail, but I didn’t have any trouble.
TorFX came up as the most cost effective to transfer my British pounds to AUD dollars.
The website is easy to navigate, clearly displaying the Australian financial services license number at the bottom of the page.
Larger transfers need to be confirmed by phone call. The customer representative who called me was friendly, helpful and reassuring. He understood my concerns and gave me simple step by step instructions on what to do next. Then, written instructions were emailed.
It was a simple online bank transfer from the UK side, into a UK account. As I was getting my parents to make the transfer for me, transferring into a UK account made it as easy as possible for them.
TorFX emailed to let me know the money had arrived in their accounts, and it was transferred into my Australian account (again, with email confirmation) within a couple of working days.
TorFX did exactly what I wanted to them, and provided a cost effective, quick and easy service. If you’re needing to transfer some currency, check out the comparison sites above and check out the fee structure carefully. Confirm company has an Australian financial services license and plenty of good online reviews.
Aussie Doc Freedom is not a financial adviser and does need offer any advise. Information on this website is purely a description of my experiences and learning. Please check with your independent financial adviser or accountant before making any changes.