Currency Forward Contract
Fix your rate to protect against market moves with a Forward Contract
Get currency confidence and stay ahead of market moves. Secure your exchange rate for up to 12 months. No worries. No surprises. Job done.
What is a Forward Contract?
A Forward Contract is a hedging tool that can help protect against a future change in price. It’s a buy now, pay later option, allowing individuals and businesses to take advantage of a favourable rate today on a future payment.
Make or receive payments without blowing your budget with OFX Forward Contracts. Lock in a rate for an agreed amount anytime between two days to 12 months. You can also make fixed-rate transfers earlier than the contracted date if needed.
The benefits of an OFX Forward Contract
Great rates
Lock in rates between 19 currencies, including all major currencies
Currency certainty Make payments without blowing your budget due to rate movements
If you book a Forward Contract, it may mean losing out if the market rate improves because you’re contracted to settle at the agreed rate.
Ready to book a Forward Contract? Open your FREE account today
Finalizing a big overseas purchase?
Investments like property are a big commitment. Talk to one of our OFX specialists about how you can fix a rate on finalised purchases or sales to get better clarity on your finances.
Need certainty over global transactions?
Periods of high currency volatility can expose you to increased costs. If you have any personal global transactions on the horizon, talk to an OFX specialist about managing your foreign exchange exposure today.
Get peace of mind on future payments
From recurring payments like mortgage payments and tuition fees, to one-off bills, a Forward Contract could help you avoid the uncertainty of moving market rates.
Forward Contracts FAQs
Is a Forward Contract right for me?
You might consider a Forward Contract if you’re committed to making a payment for goods or services in the next few months. You can also use a Forward Contract if you have an incoming payment, but you need to be certain that the payment will be made.
To continue to take advantage of exchange rate movements, some customers use a Forward Contract for only part of their liability as a way to partially hedge against volatility.
Can everyone set up a Forward Contract?
All Forward Contracts are subject to approval by OFX. Conditions vary per market.
How is a Forward Contract rate calculated?
The exchange rate you’ll receive takes into account the market rate on the day you book your Forward Contract, a margin charged by OFX, and the central bank interest rates for the currencies you are exchanging.
Do I need to pay upfront when I book a Forward Contract?
You may be asked to pay a deposit when you book a Forward Contract. This is a fixed percentage of the value of the transaction – this is most often 10% for a personal account. However, this could be more or less depending on the duration and assessment of the Forward Contract and other factors. Your deposit is held until the maturity date specified in the Forward Contract. Please note, you must pay the remaining balance of the total amount due which is the difference between the Forward Contract and your deposit, in addition to any applicable fees by the maturity date. For more information contact us.
*If you book a Forward Contract, it may mean losing out if the market rate improves because you’re contracted to settle at the agreed rate.
Why do I need to make an advance payment?
Your advance payment is held as security for your completion of the contract until the maturity date. The advance payment is calculated as a percentage of the notional mark-to-market exposure of your Forward Contract. Mark-to-market exposure is the difference between your contracted rate and the current rate.
Do I need to wait until my Forward Contract matures to use the currency?
You have the option of early delivery at any point during the contract’s lifetime. When your Forward Contract matures you will need to settle the remaining amount. If you choose to deliver earlier than your agreed maturity date, the exchange rate may differ to your original contract. For more information contact us.
Please note: If you book a Forward Contract, it may mean losing out if the market rate improves because you’re contracted to settle at the agreed rate.
What if I no longer need the Forward Contract?
You have the option of early delivery at any point during the contract’s lifetime. When your Forward Contract matures you will need to settle the remaining amount. If you choose to deliver earlier than your agreed maturity date, the exchange rate may differ to your original contract. For more information contact us.
Please note: If you book a Forward Contract, it may mean losing out if the market rate improves because you’re contracted to settle at the agreed rate.
Have a question? Need some help?
We provide 24/7 client service and support. Email us or call us anytime. We are here to help.
