Foreign Exchange - transferring money internationally

Hi guys

I work for a foreign exchange broker (HiFX) and have been reading through some of the questions on this forum. It seems like there are some migrants and/or overseas investors out there that may like to learn more about how an FX broker can assist you when transferring money internationally.

I will be checking this forum every now and then so if anyone's got some questions i'd be happy to answer them for you.

Happy investing!

Hamish

 

Hi Hamish,

I am a victim of the 2% foreign currency conversion fee when I'm in Europe, though I have recently found a visa card that gets around this.

Can you help me fight this evil creature?

Cheers,
Ripped Off.

 

Hi

Conversion fees and bank commissions are dependent on the amounts you are transferring, the regularity of the payments and why the payments are being made.

I would be more than happy to explain what you can do to minimise the costs and maximise the rate you will receive however i will need to know the details of your transaction. Depending on the amount you're transacting will ultimately depend who can help you with this - if its not us i'm more than happy to put you onto someone that can assist you...

you can email me at [email protected] or give me a buzz on +61 2 9251 2626 if you don't want to post the details.

Thanks
Hamish

 

Hi again

For everyone's benefit i will clarify how 'Ripped Off' can protect himself from bank commissions, conversion fees and transfer fees.

If you are transacting a minimum of $10,000 AUD (Australian dollars) you can take advantage of more favourable rates of exchange by transacting through an FX broker. It all comes down to the profit margins (spreads) taken by brokerages and banks - the banks will usually take a spread of between 1.5 - 3% (and charge a fee) on this type of amount whereas brokerages will take a spread of 0.4 - 1% and some will also absorb transfer fees and commissions. The result will be more available money once you've completed the transaction.

Credit cards traditionally attract an even higher spread than the 1.5 - 3%, plus the fee or commision charged for the service, so choosing an alternative method is a good idea for larger amounts. If you're paying sums under 10K AUD then companies such as Tranzfers.com (completely independent of HiFX) offer competitive rates for smaller amounts with a nominal fee.

Hope this helps
Hamish

 

Hi Hamish, Thanks for your post. I may be transferring an amount larger than A$10K to Canada in the next 6 to 12 months for my sister to purchase a property. So, I will keep your details and will be in touch again when the time comes. I will be asking my bank to quote me a rate as well. A few years ago they gave me the dealer's rate and a nominal fee (I think it was the TT rate of A$30). The converted CAD was deposited directly into my sister's bank account in Canada.

May

 

Hamish

Would appreciate your advice on this if possible. I'm moving to the UK or Ireland early in 2007, however I still have 2 negatively geared properties in Australia I need to support.

I will need to transfer around $1000 p/m AUD from UK --> Australia. Bank account here is Westpac.

What would be the best approach for such regular transactions?

Regards

Grimey

 

Hi Grimey

You have a couple of options here:

1) Head down to the bank every month and send a transfer. In this case you will be offered the daily bank rate of exchange on the monthly amount you wish to transact and charged a small fee for the electronic transfer - this is an option a lot of people choose.

2) Some brokerages (worldwide) offer a certain type of contract which allows for regular payments - this enables you to lock in a rate for the whole year and have the monthly amount automatically debited from your account on the same day each month. This gives you the following benefits as opposed to organising an individual transaction each month:

i) The rate you lock in will be calculated on the total yearly transfer (i.e. in your case you will receive a rate for the British Pound (GBP) equivalent of 12,000 Australian dollars (AUD) and not 12 individual transfers of AUD 1000. This allows you to take advantage of al rate of exchange that is based on a larger sum.

ii) Some providers of the regular payment method have the facility to arrange the monthly transfer to be direct debited from your bank and automatically paid to your nominated overseas bank - an automatic and seamless process. Thus you have the convenience in not having to arrange transactions every month through your bank.

iii) The monthly payment allows you to budget accordingly for the entire year as you will know exactly how many pounds it will cost you each month to buy 1,000 AUD - the amount will be the same each month.

Thanks
Hamish