How to get the best exchange rate on your international money transfer

Whether you're sending money home to your family or paying a business supplier overseas, it's important to make the most of your international money transfer. The difference between an average exchange rate and a good one can be huge! That's why we've put together this handy guide on how to get the best exchange rates for your next international money transfer.

Check the current exchange rate

It's a good idea to keep an eye on exchange rates in the run up to your international money transfer. This way you can find out what rate your bank or currency provider is offering and whether there's any room for manoeuvre. You can even get an idea of how much you could save by using a good price comparison tool, such as that hosted by TransferLab, which compares leading banks and remittance providers on value when sending £1,000 to Europe. Click here to compare prices.

Compare rates at other banks or transfer companies

As mentioned above, it's easiest and quickest to use a simple price comparison tool such as the one available on the TransferLab homepage to work out how much bang you get for your buck (euro or pound!).

You could also take it a step further and do your own research. To perform accurate price comparison you'll need to contact each bank or remittance provider for a quote on the same date, at the same time and for the same amount. This way you can compare like for like in terms of price and also get an idea of which company you like best for Customer Service and Support or aftercare.

Consider how fast you need the money transferred - do you want it sent right away, or can you wait for a better rate?

The single most important component of foreign exchange is what's called the "spot rate". This represents the mid-market or inter-bank value for a particular currency, which is updated constantly throughout the day. This rate is affected by a number of complex factors including market speculation and demand, which is why it changes all the time.

If the spot rate isn't where you need or would like it to be, and, if you have the luxury of time, you might want to wait for a better rate. You can monitor the spot rate for your desired appreciation or depreciation and contact your foreign exchange provider to lock in your desired rate once you see it.

If you're waiting on a rate, the ability to move quickly and get it booked in is critical. In this scenario 24/7 access to online exchange rates and bookings will likely be attractive to you. Your bank is unlikely to offer you this facility (unless you're a medium to large company and even then, rates may be poor). However, specialist foreign exchange companies such as TransferLab offer access to live exchange rate pricing to the public and exchange rates are updated every minute in line with inter-bank rates. So once you see your desired rate you can move quickly to lock it in.

If you intend to use an online money transfer platform to book your desired exchange rate, don’t forget to set up your account in advance of your anticipated transaction date. This entails ensuring your foreign exchange provider has verified your ID and marked your account as “active”, so you’re ready to transact when you need to.

You might be charged commissions, fees or other extras by your bank when sending money. This will likely vary depending on your bank, the country where your account is located and your account type. It's worth being aware of potential charges so that you can factor them into your calculations. If you don't know how much your bank charges on bank transfers check out your bank's website for more information or contact them to request a fee sheet for your account. Doing this extra legwork in advance will save you from headaches down the road, for example, where your bank applies additional transaction fees which reduce the total amount received by your foreign exchange provider and results in your onward transfer to your beneficiary being delayed.

International money transfers can be a complex area and you need to be on the ball when it comes to understanding what charges emanate from your bank or foreign exchange provider. As discussed above, you should ask your bank about applicable transaction fees. Similarly, you should check if any fees apply before placing a money transfer order with your chosen foreign exchange provider. Per FCA guidance, they should tell you upfront before you place an order if fees apply. However, if you can't find this information on their website, don't hesitate to contact them and ask the question. If they're a reputable company they will be happy to inform you if they apply any additional fees or charges on your international money transfer.

If possible, ask a friend who has made an international money transfer before, or check Trustpilot

As with any important purchase it's worth checking what other customers think of the foreign exchange company you're considering using. If you know a friend that has made international money transfers before, ask them for their advice or a recommendation.

Or perhaps check online reviews, for example search your intended FX provider on www.trustpilot.com (a consumer review website for businesses worldwide) to get an idea of how good they are at what they do before committing to deal with them. You'll be happy to know that the author of this blog, TransferLab, is consistently rated "Excellent" by its customers on Trustpilot.

Haven't tried TransferLab yet? Create your account and get £10 off for your first money transfer.