The thing is the banks are reasonably OK at what they do, although some people might have other things to say about that, but believe or not, they’re actually not at all good at foreign currency exchange rates.
If you live outside of the Euro currency zone, you’re going to have to turn your currency into Euros and the bank’s exchange rate is definitely not as good as you can get from a foreign currency exchange company.
A currency exchange company is a company that deals with changing money from one currency to another at the best rate possible and that’s what they do…all day long.
Effectively they specialise in exchanging currencies, so they’re doing that as their only business, they do thousands of exchanges a day, and thanks to the amount they do, they can afford to reduce their commissions to a level where you’ll get a better exchange rate and – by the way – a better service too.
I’ve never known a currency exchange company to actually charge the client an actual fee for the exchange of funds…they make their money by giving you a slightly lower exchange rate than the rate they’re personally getting, but as I mentioned, doing loads of exchanges every day means that they can keep their charges lower than your bank can.
The foreign exchange companies are overseen by the FCA, which is the Financial Conduct Authority and they regulate all currency exchange transactions done by these companies.
Thanks to the FCA overseeing everything, your money is as safe as it can be during the transfer process.
Since I started selling property in Tenerife, Spain, I’ve had hundreds of clients using a currency exchange company and they’ve transferred millions of Sterling into Euro and the other way round – Euro into Sterling for those sellers going back to the UK.
The company that I refer my buyers and sellers to is Currencies Direct. One of the main reasons I prefer Currencies Direct is because they have an office in Tenerife, where I have my estate agency, but they have offices throughout Spain so, if you’re in the area, you can actually meet them face to face.
You can go into one of their offices and chat to the staff and get an idea as to how it all works, if you’re near one of their offices, it really does help put people’s minds at ease.
Now of course, whatever the amount of money you’re sending, you’re almost certainly going to be worried sick about it.
As soon as you press the button to send it, you’re going to start thinking…”where’s my money gone?” because it probably won’t be at its destination at best in a few hours at worst the next day…and of course, it’s very easy for me to say this but my advice is that you just need to relax and have confidence in the system, you just have to be using a well-known currency exchange company and trust in the way that it’s going to work.
Always have everything explained to you before you do anything – in fact that goes for the whole process of buying a property in Spain. Maybe speak to other people who have used the currency exchange company before because I’m quite certain that nearly all of my clients who have used Currencies Direct, have absolutely felt a cold shudder in the pit of their stomach when they agreed to do it and they see their bank account saying minus 200,000 Sterling, or whatever…it’s just gone into thin air, and they’re understandably worried.
Of course, they’re worried, it’s unlikely they’ve ever done anything like that before, but obviously when it arrives to its destination, there’s no concern at all, they’re very happy with the service and they’re very happy with the rate they got as well in comparison to the bank.
The only time I would suggest that you use your own bank is if, for example, you have a business Euro account with them and you regularly use that account to buy stock or materials for your own business from companies in Euro currency zone.
I think in all the time I’ve been selling property in Tenerife, probably two of my clients have used their own bank simply because they had Euro accounts as well, where they would often put lumps of Sterling when the rate was good because they were going to be buying something from a European business.
It had been put in at a time when there was a good exchange rate and they therefore had their bank send the funds over to their lawyer’s client account in time for completion of buying their property.
Obviously, not many people have this facility in place, hence my recommendation to use a currency exchange company.
Which companies do foreign currency exchange?
So, my final piece of advice is just to do some research before you choose your currency exchange company. Maybe look at some reviews that previous customers have left.
As I said earlier, I can highly recommend Currencies Direct, they’ve never failed me or my clients and of course, they may even have an office locally to where you’re thinking about buying your property in Spain, so pop in and see them face to face or at least phone their office and have a chat with someone.