By Charles Purdy [email protected]
Charles Purdy is a Director at Smart Currency Exchange Limited – the only international payment specialists in the UK who work specifically to help people save money on regular transactions such as mortgage or pension payments.
When I was 27 my mother purchased me Cooking for Dummies and, at first, I took it as a bit of an insult – especially as I wouldn’t say her cooking was “cordon bleu”.
Okay my cooking wasn’t great but I was still alive after 10 years away from home. After flipping through the book, I actually learned quite a bit. Without it, I would still be wrestling to peel hard boiled eggs. Rather than painstakingly picking the peel off, if you run cold water over them for a few minutes (after boiling them), the shells slide right off with almost no effort!
As for international payments… making money transfers from one bank to another bank overseas isn’t exactly rocket science. There are, however, many ways to do it ineffectively and lose quite a bit of money in the process. The standard manner to send money to or from the UK is to visit a bank, request that a certain amount of Sterling or Euros are converted and then instruct the bank on where to send them.
During this process there are three main areas where people go wrong. They include: getting poor exchange rates, paying unnecessary fees and finally failing to order currency at a good rate now for purchase in the future. Let’s look at each one of these individually.
Getting bad exchange rates
Similar to buying produce in a tourist location in Portugal rather than a village shop, buying currency from a bank is more expensive than buying it from a currency specialist.
A bad exchange rate is simply paying more for the currency than you can get it elsewhere. You wouldn’t go and buy vegetables in one shop if you knew that you could save five euros by getting them elsewhere!
The issue with currency is that you won’t simply save five euros – you could save thousands of euros by shopping around. For example, some currency organisations save clients up to four per cent over using the bank. This means that an instant saving of 4,000 euros can be made when moving a large sum of 100,000 euros by using a specialist rather than a bank.
Paying unnecessary fees
Everyone knows that the banks like to charge fees – in Portugal you might get charged for withdrawing money or writing a cheque. Many banks even charge when you deposit money. Again, by using a specialist currency organisation, fees can be eliminated or reduced. Specialists know how the systems work and they know the most cost-effective way to move money.
Many expats in Portugal move their pensions from the UK to Portugal every month or quarterly. Fees in the UK can amount to 25 pounds sterling for each transfer – that’s 300 pounds sterling a year in fees alone! Why pay that fee if you don’t have to?
Order currency now for use later
There is one product – called a Forward Contract – that can assist people massively. Imagine receiving your pension or a regular payment in Portugal every month and then imagine that every month the value of it decreases due to Sterling weakening against the Euro. This is precisely what has happened over the past year and it’s totally avoidable.
Currency specialists can help their clients to reserve the rate today and purchase it in the future – this means that if you get 1,500 euros from your UK pension in month one, you can continue to get that same amount for the course of the year! Those who didn’t purchase Forward Contracts last year sadly watched their pension values decrease by over 20 per cent.
Transferring money internationally is not a difficult process; however it’s easy to get lost and led astray by figures and doing things the ‘traditional’ way. There are choices available and substantial amounts of money can be saved by enquiring about alternatives to the bank.
Currency specialists are regulated by and must be registered with Customs & Excise. Due to the fact that specialists buy large amounts of currency each day from their bank, the bank passes significant savings on to them that they fail to pass on to their own clients. By using a specialist, you’re still effectively using the regulated banking system but getting a much better service and, often, a substantial saving.
Why not claim your FREE report from www.RegularPaymentReport.com on how to save money on payments to and from the UK?
To move money between Portugal and the UK, go to www.SmartCurrency
Exchange.com for more information – or call Charles Purdy on 00 44 (0)207 898 0541