The changeable market keeps most expats on their toes with exchange rates, fees and timings. Whether you're sending money to friends or family in far-flung places or repatriating money back to the UK, you should know the most common mistakes people make when transferring money internationally.
That's why we've collaborated with international payments specialist Hargreaves Lansdown to help you avoid falling into these traps.
1. Forgetting to check the exchange rates
Whether you're a small business or an individual, chances are you've used your bank to make international currency exchanges and transfers. After all, this is the most obvious option. But it's also often the most expensive option as you could be paying well above the odds.
Even the smallest change in the exchange rate offered by your provider could cost you hundreds of pounds (possibly thousands). So it's important to shop around for the best rate.
Save as much money as possible by looking at currency specialists, such as Hargreaves Lansdown, as the exchange rates they offer are often better than the banks'. This is especially beneficial when transferring large amounts of currency for more expensive purchases such as property.
2. Paying transfer fees
Although still a common practice, it is unnecessary to fork out extra for high bank transfer fees. Incurring a flat fee can sting if you're sending relatively small sums across country borders. Some currency specialists offer individuals or small businesses regular payment plans for recurring payments which help to keep costs down.
There are providers, like Hargreaves Lansdown's currency service, that offer low or no transfer fees. This can save you up to £30 on each and every transaction, which really adds up if you are making multiple transfers or paying invoices.
3. Making insecure payments
Not all currency specialists are created equal, some are more secure than others. Make sure you're protected financially from the moment the money leaves your account to when it reaches its destination account.
The terminology can confuse the most clued-up of people but there is a huge difference between whether a firm is authorised or registered with the Financial Conduct Authority (FCA).
Hargreaves Lansdown's Currency Service is an FCA-authorised service, which in practice means they are legally bound to keep your money transfers separate from their company funds and provide financial safeguards proving their stability.
Whilst registered firms may choose to safeguard your money, they aren't required to do so. And they don't have to provide the FCA with as much detail about their business, so the regulator can't check on their financial health.
4. Leaving it until the last minute
Don't leave yourself at the mercy of the exchange rate on the day you transfer. If time allows, savvy savers should plan their transfer as far ahead as possible. This gives you more flexibility as you'll have the option to fix an exchange rate for the future, or target a specific rate.
If you're fixing an exchange rate you'll have the peace of mind to know what a future purchase will cost you, regardless of whether rates move up or down. Targeting a specific rate will enable you to make the most of improvements to rates, but doesn't offer protection if rates move against you. Both of these options are only available if you plan ahead.
5. Not keeping up to date on the latest news
You wouldn't expect to be well-versed in current events without consuming the news. The same goes for your finances. Without monitoring the latest market developments it leaves you vulnerable to making the wrong decisions in the fast-moving world of finance.
Stay on top of trends and currency movements and how to best position yourself to take advantage of the highs and avoid the lows. Hargreaves Lansdown offers a free weekly report on their website and via email, making sure you get the most from your payments. Please note, their service does not provide personal advice, but can provide information for you to decide what's right for you. If you're unsure please seek advice.
Download your free guide to international currency transfers here.
This article was produced by The Local Creative Studio and sponsored by Hargreaves Lansdown July 2018
The Hargreaves Lansdown Currency Service is a trading name of Hargreaves Lansdown Asset Management Ltd. One College Square South, Anchor Road, Bristol. BS1 5HL, authorised and regulated by the Financial Conduct Authority as a Payment Institution under the Payment Services Regulations 2017, see www.fca.org.uk. FCA Register number 115248. Registered in England and Wales. Registration number: 1896481.