There's a number of reasons why you might need to send money abroad – perhaps you've got a holiday home and are paying an overseas mortgage, or have an offshore account you'd like to deposit a lump sum in. Whatever the reason, it's worth spending some time shopping around for the best rate of exchange.
Unlike deposits into a UK bank account, international money transfers aren't free. You'll be charged a fee and be subject to the current exchange rate. Both costs vary from company to company and the difference can be quite substantial, so to make the most of your money you need to compare both rates.
The costs to be aware of are the transfer charges and the overseas account receiving fee. As for the exchange rate, the term 'commission free' might make it sound like a good deal but often the exchange rate is hiked up to counter it so it's not always as good as it sounds.
Finding the best deal
The rate you get will depend on a number of factors, including how much you're transferring, the currency you're converting your Sterling into, and the current rate of exchange – the latter changes constantly so timing is important.
As rates of exchange change so rapidly, if you're going to compare several companies it's best to do them one after another, or use a comparison tool to get the best idea of your options.
Comparison tools require you to put in the amount you wish to transfer, along with which currency you're converting to. It will then usually display how much of the foreign currency you'll receive for your money.
Making regular international transfers easy
One-off transfers are relatively simple, but if you're paying into an overseas mortgage or making other regular deposits into a foreign currency account, you may be better off enlisting the help of a currency broker. They will be able to fix an exchange rate for a certain period of time (usually 12 months) during which time you won't be subject to exchange rate rises.
If course, if the rate falls during your fixed period you'll end up paying more, but if you're looking to pay a set amount each month this might be a preferred option.
Brokers can also offer more competitive exchange rates than most banks and other sources, and carry out free transfers, so if you're going to be transferring several sums of money a broker can save you quite a lot of time and cash.