Foreign exchange, a few questions answered

Foreign exchange, a few questions answered

Currencies

The world of foreign exchange can be quite confusing when you don’t know where to start.

At Languedoc Living, we have a policy of not recommending any one particular currency exchange specialist, so please take your time to assess all the options available to you.

We asked Currencies Direct to clear up a few common questions which are asked, and their answers are shown below.

What are the most common reasons people give for transferring money abroad? Apart from changing relatively small amounts of currency to use when travelling overseas on holiday, the two most common reasons people give for moving their money abroad are:

1. Buying property

2. Large, one-off payments (e.g. for a car or an artwork)

Although the reasons for moving money are straight forward, the process itself often isn’t, especially if you use a bank! Most banks will take up to 5% of your money in transfer fees, and they usually offer a poor exchange rate.

Even worse, banks can take their time getting your money from A to B. This adds needless stress, especially if you risk missing out on your dream home or the classic car you’ve wanted since before you were old enough to drive…

There’s a better way than using the bank

Luckily, a bank isn’t your only option. A currency exchange specialist is exactly that – their focus is on moving money from one country to another. And because they offer you a much better rate of exchange than many banks do and don’t charge transfer fees, you get to keep more of your own money. Which is only fair, isn’t it?

Currency exchange specialists are also much quicker at getting your money from point A to point B, and can keep you posted as to its progress along the way. The result is a simple process with no hassle, no surprises and no stress.

Bank-beating exchange rates

Currencies Direct regularly beats the banks on foreign exchange rates, and their customers often save 4% to 5% on their transfers – and when we’re talking about the value of a property, that’s a significant sum. It means you could effectively move for free! They can also watch the markets for you so that you can transfer your money when the markets move in your favour.

I have been waiting to transfer Sterling to euros and was delighted to see the rate touch 1.40 early in 2016. However, I didn’t transfer because I was hoping it would keep rising. But now it has dropped after BREXT and is still falling – what’s the prediction for the next few months? Should I transfer or hold on a bit?

How disappointing for you! It may be cold comfort to know that many people find themselves in exactly your position. The only real consolation we can offer you is that – as you’ve discovered – the markets can be unpredictable and what falls one day can go up the next. This means that if your need for euros isn’t urgent and you have the ability to wait, there may be some merit in being patient and seeing if Sterling can rebuild its muscle against the euro.

Obviously, there are no guarantees when it comes to currency values and no one can promise you that 1.4 will be matched or bettered at a time that suits you. But you do have a couple of options for ensuring that the next time the euro takes a dip against the pound that you’re ready to pounce!

The first of these options is Rate Watch. This is the easiest way to keep track of the markets. For example, if you were hoping for a better Sterling-to-euro rate than 1.4, you can tell us what your preferred rate is for making a transfer. We’ll watch the market for you, and when your rate is achieved we’ll get in touch with you so can decide whether or not you want to move your money.

The best thing about Rate Watch (apart from the fact that you’re not required to do anything!) is that it’s obligation-free – we know that life can be as unpredictable as the currency markets. So if, when your rate is reached, you don’t need to move your money, that’s fine. But it’s good to know that once your Rate Watch is set up that someone’s keeping an eye on the markets for you.

Another good currency tool is a forward option. This will give you the chance to book your currency exchange on a specific date, and at a predetermined exchange rate. For example, if the rate reaches your ideal level before you need to move your money, you can call us to book in that rate for when you do need to move it. This is great if you’re buying a house or getting married abroad, but don’t want to touch your funds in Sterling just yet. You can lock in your forward payment for a 10% deposit.

I suppose that the short answer is that nobody can predict the future, but there are things you can do today to get ready for it. We’re here to help and actually enjoy watching the markets – not everybody does, we know – and we’d be happy to talk over what we can do for you.

Why do we get charged moving money between accounts in the Eurozone?

The Single European Payments Area (SEPA) is the EU’s payment-integration initiative to simplify bank transfers denominated in euros. SEPA payments will not attract a charge and once they’re sent they’ll be credited the next working day.

In short, the idea of SEPA is to make it easier to transfer money and electronic payments between the 33 countries in the SEPA area. This means a smoother, borderless payments zone.

The European Commission says that SEPA will bring consumers a number of benefits, including:

The ability to use a debit card anywhere in the Eurozone: No need for credit cards or trying to carry lots of cash when you’re on holiday!

Better cross-border bank transfers: SEPA will ensure that your euro payments are made promptly and in full. Your payment should be received in a guaranteed time, and banks will not be allowed to make any deductions from the amount transferred. You’ll also be given simple and clear information on any charges or fees that apply.

If you’re being charged fees for transfers within Europe, you should talk to your provider to ensure your transfers are sent through SEPA.

Did you know you can set up a forward contract for your pensions and mortgage payments? Using a simple Direct Debit system, Currencies Direct can set up all the payments you need to send in all major currencies. Payments are sent automatically, so you don’t have the hassle of dealing with the bank.

I currently receive my UK pension into a UK bank account and want to transfer that across to France on a regular basis. What’s the best way for me to go about getting that set-up? Will my bank be able to help me?

When retiring to or purchasing a second home in France, most expats will, at some point or another, need to make international money transfers. Aside from the funds for the initial property purchase, one of the main reasons for moving money from the UK to France is the ongoing transfer of a UK pension. Whether you want to send a lump sum annuity from a UK account or simply make regular ongoing transfers from your monthly payments, transferring this money to your French account shouldn’t be complicated, but there are a few pitfalls to watch-out for.

Making ongoing transfers should be as easy to set-up as a one-off transfer; there is no need to spend hours on the phone or online, every month, arranging the transfer of your money from one country to another. Although various financial institutions, such as traditional banks and currency specialists, offer international money transfer services, you should be aware of the differences in the service provided when it comes to regular payments.

Where your traditional bank would charge you excessive fees and often poor exchange rates every time you transfer, currency experts guarantee very low or no fees at all and highly competitive rates. If you are transferring your pension every month, this could represent a significant amount of money saved over time.

When most of the banks make regular overseas transfers a tedious and complicated task, currency specialists can offer regular transfer services which are fast, simple, fee-free and adapted to your needs. They’ll help you set up a Direct Debit to ensure transfers are done automatically and at the best possible exchange rate.

You can even choose to fix the amount (in Sterling) you’re sending from your UK account or the amount (in euro) that arrives on your French bank account. Additionally, some providers will also give you the possibility to fix the exchange rate in advance for your transfers. This means you’re able to transfer for a set-period of time at a pre-selected exchange rate and avoid the fluctuating nature of currency exchange rates.

I run a gite business in France and accept payments by Pay Pal and credit cards. This is expensive for me and the client. Is there any way that I can accept or send foreign payments free of charge?

The Languedoc Roussillon region really does have it all; great weather, beautiful beaches – not to mention being the biggest wine producing region in the world! That’s why so many of us choose to live here, and also why so many decide to set up in business letting properties for holidays and long term rental. There is always a high demand for quality holiday properties in this area and many people realise the opportunity to run a very successful business, be it Gite/Villa rental or chambre d’hotes….

However, getting into the holiday rental business does pose certain challenges – one of those being how to receive payments in a way that will be beneficial and inexpensive for both owner and renter!

Currencies Direct have been helping clients save money on their international transfers since 1996 and processing holiday payments is one of the ways they can help save you money…. For example, if you are a villa owner in France and have a client in the UK who wants to pay you in Sterling, of course you want to receive your money in Euros. It’s quite simple. Refer them directly to Currencies Direct who will take them through a very quick and easy registration process (this is a mandatory requirement as Currencies Direct are a fully regulated company).

Once your client is registered with Currencies Direct all they have to do is tell their Currency Dealer how much they need to pay in Euros, Currencies Direct will tell them the cost in Sterling, the client confirms they want to go ahead with the transfer and viola, that’s it! The client will give Currencies Direct the details of the account to send their payment and all they have to do is make a straightforward transfer of sterling to the UK based Currencies Direct sterling account….even better there is no charge for this service.

Once the client has set up an account with Currencies Direct they can use it as often as they need – so this year they may book a villa in the Languedoc, next year perhaps a farmhouse in Tuscany or a villa in Florida……wherever they go they can use Currencies Direct to pay for their holiday, saving money and time!

 

Here is the contact info: HERE

Leave a Reply

You must be logged in to post a comment.

Disclaimer: We do not give tax nor legal advice. The following information is offered only as a point of view. You are encouraged to evaluate this information and act according to your own reasoning and conclusions. Because we encourage independent thought and personal responsibility, we do not accept credit nor liability for the use or misuse of this information.