When you’re looking for the best foreign exchange rates, choosing the right provider can make a big difference. The best foreign exchange rates vary day by day but are undoubtedly available through digital services like Cashero, rather than mainstream banks.
If you’re after the most competitive costs, there are several different fee elements in a currency exchange to budget for:
- Exchange rates – the amount for which your dollars are being bought or sold. A ‘floating exchange rate’ determines this value, so it can go up or down at any given time depending on both currencies’ economic performance.
- Commissions – your quoted exchange rate will be different depending on the transfer service you choose. That relies on the commission the provider adds on top and what base rate they are working with.
- Transfer fees – administrative charges payable for the management of your transaction, again varying between providers.
- Banking charges – if you’re transferring cash from a credit card, for example, you’re likely to incur a cash advance charge, plus interest. You might need to pay ATM withdrawal charges or a fee to your bank for processing a foreign currency transaction if the funds haven’t been received in your local denomination.
We know that while exchange rates are the headline figure we all look for when establishing who has the best foreign currency exchange rates – that isn’t necessarily the be-all and end-all!
Some other transfer services offer ‘zero fees’ or low transfer rates, but often you’re still paying those costs in other ways.
By and large, the admin charges are rolled up into the exchange rate. Therefore, it’s best to look at the overall cost of your transfers, including fees and the offered exchange rate, rather than trying to compare like for like quotes that aren’t, in fact, directly comparable!
Which Transfer Services Offer the Lowest Costs?
In terms of those overall costs, you’re inevitably going to get a better deal from a specific money transfer service than from your usual bank. That’s because:
- Banks aren’t experts in currency exchanges and often have less competitive processing times, exchange rates, and transactional charges.
- Unless you’re a serious client, most banks aren’t going to be too focused on your transfer since it’s probably a minimal value to them. The fees aren’t going to be substantial enough for a bank to offer a dedicated service, so it will typically take longer and be more expensive.
- Transfers are a specialist area and not something banks spend time on – you might find an FX team, but that’s usually intended for secured lending or asset finance, rather than direct money transfers.
- Banks use tiered systems to calculate the exchange rate they’ll offer. The more you want to transfer, the lower rate you can get. This applies elsewhere too, but to a much smaller extent, so you’re going to be quoted more attractive rates from a money transfer service that will often lock in a quoted rate for a fixed period.
As a rough indication, you’d usually expect to save as much as 60% to 70% on money transfer fees and exchange rates through a specialist provider than you would pay with a traditional bank.
Bear in mind that exchange rates can change on a dime, so it’s essential to either ask for a quote with a fixed expiry time or check for a second quote when you’re ready to go ahead – if you don’t, you might be in for a nasty shock if either currency has plummeted in the meantime! Because we offer instant transfers at Cashero, the rate you’re shown at the time you make your transfer is the exact rate you’ll receive plus any transaction fees, if any.
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As of the date of publication, the information contained on this page is deemed to be factually accurate for all terms of conditions, features, and fees. Changes made to Cashero’s terms of conditions, features, or fees after the publication of this content may not be accounted for.
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