Currency brokers vs banks: Which is actually the best option for international payments?

Whether you need to move £2,000 overseas or £200,000, you must feel confident that the currency transfer service you’re using is reliable, secure and getting you the most for your money.

If you’ve got foreign exchange requirements, such as funding an emigration or moving wages overseas, spending some time looking into your options can be well worth the effort.

While the two most popular kinds of foreign currency exchange provider are banks and specialist currency brokers, there are services brokers are able to offer which banks can’t so if you want maximum flexibility and a number of options for safeguarding your transfer from currency risk, using a broker might be right for you.

Banks aren’t exchange specialists

Most banks offer international currency exchange services, but as the area isn’t their specialism few employ foreign exchange experts to talk clients through their transfers or keep them informed of the latest market movements.

Brokers, like TorFX, have a team of dedicated industry experts on call to monitor exchange rate trends, offer guidance on currency risk and help their clients secure a more competitive exchange rate.

This level of support means you won’t be passed round a call centre or left confused about what transfer option best suits your needs – you’ll have a constant point of contact and the reassurance that your Account Manager has years of experience to their name and is looking after your best interests.

Breadth of exchange options to reduce risk

While the foreign exchange services offered by a bank might be limited, a broker would be able to help you streamline recurrent transactions with an automated Regular Overseas Payments service or allow you to fix a favourable exchange rate up to two years ahead of making a currency transfer.

As the currency market is extremely volatile, the risk management options some brokers provide could also prove invaluable.

If you want to safeguard your transfer from the dangers attached to sudden market shifts, options like setting up a Limit Order (where you target a specific exchange rate and the trade is executed when the rate becomes available) or a Stop Loss Order (where you can set a minimum rate at which to transfer your funds, with the transfer being conducted automatically as soon as the rate is hit) are worth considering.

Securing the best exchange rates

Another difference between banks and brokers is the exchange rates they’re able to offer.

As the two types of institutions work off different margins, brokers tend to be able to secure more competitive exchange rates. As even a seemingly small variation in the exchange rate can mean the difference of thousands of Pounds on larger international currency transfers, securing a better rate could leave you substantially better off.

Before proceeding with a transfer you may want to get quotes from several providers to ensure you’re getting the best deal available.

Exchange transaction fees and charges

On top of the disparity in the exchange rates they’re able to offer there is a difference in the fees you might expect to incur. Most banks will charge you for moving your money abroad while currency brokers work on a fee-free basis, meaning you’ll get more for your money.

In fact, a currency broker could help you save up to 90% of the costs commonly attached to international money transfers. If you’re moving overseas or already living abroad, savings like this could make a big difference to your life as an expat.

Opening an account with a currency broker should be free and come with no obligation to trade, so you can register as a client and benefit from regular market insights and exchange rate updates a long time before you need to move your funds overseas.

If you’ve got an upcoming foreign exchange requirement, be sure to research your currency transfer options to make sure you’re getting the best deal. 

Get specialist help to ensure you are making the most from foreign exchange rates

Whether you are making large, one-off international money payments, or you are transferring regular amounts getting expert advice to help you mitigate volatile exchange rates could ensure you make the most of your wealth.

Many expats are still simply doing international money transfers via their banks and exposing themselves to exchange rate fluctuations and unnecessary bank charges.

Speaking to an expert could enable you to fix exchange rates for up to two years, ensuring you can accurately plan how you manage your wealth.

Our trusted partners are experienced in helping expats around the world use foreign exchange rates to their advantage and have access to all the tools and services you will need.

When you request a free introduction, we will evaluate your enquiry and hand-pick our best partner then ask them to contact you and arrange a free initial consultation to explore your situation and provide you with basic information to help get you started. If you wish to proceed with their advice or services, they will also detail what they can provide and all fees, without any obligation to proceed.

It only takes a few minutes to make your request, but it is a risk-free way of getting help and guidance from a trusted expert which could potentially enhance your wealth management strategy.

Request a free introduction to one of our trusted currency and international payment partners >