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How to Get the best Currency Rates for Emigration

Emigration can be an extremely stressful experience and many people overlook the importance of choosing the best foreign exchange broker, even though this is probably one of the most significant decisions they can make.

Many people emigrate with hundreds of thousands of pounds.  If we use the example of someone transferring £300,000 from a property sale and savings into the Australian dollar, we can see why the exchange options should be carefully considered.

Jim Dim sends his £300,000 across to Australia using his trusted bank that takes a spread of 3.5% (the spread is the difference between the market rate and what the bank offers Jim).  On a figure of £300,000, this means the bank is actually making approximately 10,500 from Jim – a pretty hefty sum I’m sure you will agree.

Simon Smart shops around various specialist foreign exchange brokers and comes across one that is willing only to take 0.7% as a spread.  In this instance the broker is charging £2100 for their service.

When we compare the two figures we can see that Simon is £8400 (£10,500 – £2,100) better off by shopping around and is therefore in a much better position when he arrives in Australia.  The money he has saved by simply researching for a couple of hours could be used to purchase a nicer property or car in Oz or to kit out his house with luxury furniture.

The example used above is actually pretty conservative.  Many banks will charge a spread of up to 5% which means for every £100,000 you exchange with them, you will effectively be paying them £5000.

Our advice

As we mentioned, in the vast majority  of cases a high street bank will, to bit it bluntly, rip you off with the rate they will offer you.  They will shout about 0% commission but will not inform their customers how much they are taking in the way of a spread.  If you ask them about spreads, chances are the representative serving you will not have a clue what you are talking about.  In this instance, ask to speak to someone that is knowledgeable enough to answer your question.

If you find that the bank is taking in excess of 1% then you know that you are probably overpaying.  In this instance, you might want to speak with a variety of foreign exchange brokers to make sure you get the best deal.  For a list of FSA regulated and highly reputable brokers – click here.  MakeAsk them what spread they are charging and do your homework to make sure they are reputable.

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