Are Currency Brokers Cheaper Than Banks?
OFX is one of the UK's leading currency brokers, helping thousands of individuals and businesses with their international money transfers.
5 considerations when choosing a currency broker
With plenty of currency brokers out there, choosing the right one requires plenty of research into company websites and profiles. Here are five considerations when choosing a currency broker:
- 1. Are they regulated?
Firstly, find out whether the broker is compliant with local regulation - for instance, in the UK the broker should be regulated by the Financial Conduct Authority (FCA). This provides extra security by ensuring that the company safeguards client funds and maintains a certain level of capital funds. A broker that is a member of a regulatory body will state this on it's website. You should only open an account with a firm that is fully regulated.
- 2. Compare exchange rates & fees
Currency brokers offer far better exchange rates and lower fees than any bank, however it is important to compare the exchange rates/ fees between the different currency brokers. The currency market is extremely competitive and some firms quote ‘interbank’ exchange rates to get your attention and then add additional fees/ increase margins. Don't be fooled - get a quote upfront and confirm if there are any fees attached before proceeding.
At OFX there are no fees if your transfer is greater than £3,000. So with low (or no) fees and a 3-4% saving on the exchange rate compared to a bank, you could potentially save thousands of pounds when transferring big amounts.
- 3. How long do transfers take?
You may also want to consider how quickly a broker can transfer your money. Most currency exchange firms can deliver the funds to an international bank account within 1-2 days while others may take longer. This sometimes depends on which country you’re sending money to, but either way it’s worth looking in to if you’re in a hurry.
- 4. Customer Support
Good brokers offer 24/7 support for their customers. Foreign exchange markets are open 24 hours a day, therefore a broker's customer support should also be available to answer all your questions at any time during the week. In this respect, having access to your own dedicated FX dealer who can help manage the various risks involved with foreign exchange is key, so ensure that the FX firm has good 24/7 customer service so you can make a sound and quick deal, whenever you’re ready to.
- 5. Technology
Lastly, consider the dealing system (both desktop and mobile) that a company offers. Is it simple and quick to make an international money transfer or slow and confusing? Sending money abroad does not need to be difficult so ensure your broker has up-to-date technology which allows you to conduct a transfer quickly and without too much hassle.
Why use a currency broker?
Our customers use our service for a variety of reasons - saving money every time they do! Here are some of the more popular reasons people use OFX: