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Foreign exchange

Transfer money abroad easily with our partner, Currencies Direct[1]

Foreign exchange explained

Foreign exchange is the conversion of one currency into another. 

Say you’ve been working abroad. Now your contract’s over, and you’re coming back to the UK, you want to transfer your hard-earned euros into pounds. A foreign exchange service can do this for you.  

You can also use a foreign exchange service to convert currencies for:

  • Family support 
  • Occasional gifts 
  • Holidays 
  • Transfers to an overseas account 
  • Business transactions 
  • Weddings 

Exchanging foreign currency 

You can go to a bank or a specialist foreign exchange organisation to convert your money into another currency.  

Check for exchange fees 

Some card issuers and banks charge you foreign exchange fees, but there are a few that don’t charge anything at all – if you’re not sure, ask your issuer or bank before exchanging currencies 

How much money can I send abroad? 

Good news – the UK doesn’t have a set limit on how much you can send overseas.  

Banks or foreign exchange organisations can set their own limits though. If you need to transfer more, you should be able to with multiple transfers.  

But the FCA and HMRC could restrict the amount you send if they suspect things like money laundering or tax avoidance. 

It’s worth bearing in mind that Brexit could affect the final amount your money is converted into, so keep an eye on exchange rates and any law changes that apply to foreign exchange.  

Banks vs specialised foreign exchange organisations

Banks

Pros

  • It’s more convenient – you can pop into a branch, or do it online 
  • It’s a more familiar service 

Cons

  • International transfer fees can be expensive 
  • It might take longer to set up the transaction – you’ll need to set up an International Bank Account Number (IBAN) and Bank Identifier Code (BIC). 

Foreign exchange organisations

Pros

  • It can offer better exchange rates
  • It’s simpler to set up – you’ll usually only be asked to provide bank or credit card details and set up a password

Cons

  • Whether there are fees or not depends on the organisation
  • The uncertainty of using a different organisation, potentially for the first time

Foreign exchange vs holiday money

Buying holiday money isn’t quite the same thing as foreign exchange – trouble is, even the banks use the terms interchangeably.

Foreign exchange is more for sending money to a bank account that uses a different currency, but converted travel money is (usually) a cash transaction, so you have money to spend while abroad.

Things to look out for when transferring money overseas 

As well as keeping an eye on the exchange fees and speed of transfers, look for guaranteed security when transferring money overseas:

  1. FCA authorised

    Make sure the organisation you use for foreign exchange is FCA authorised and not just ‘registered’. This adds a layer of protection as approved firms have to follow certain security rules

  2. Ratings

    Check rating scores for things like financial stability and credit-worthiness. Read customer reviews to gauge the service provided

  3. https

    When using an online service, make sure the website address starts with ‘https’ which means the time you spend on the website is secure

  4. Awards

    Look for money transfer services that have recent accolades, like a MoneyAge award

  5. Information

    Use a service that offers personalised advice, helping you get value for money for your circumstances – this is especially important with Brexit looming

[1]Gocompare.com introduces customers to Currencies Direct Limited, which is authorised and regulated by the Financial Conduct Authority. Gocompare.com’s relationship with Currencies Direct Limited is limited to that of a business partnership, no common ownership or control rights exist between us. Please note, we cannot be held responsible for the content of external websites and by using the links stated to access these separate websites you will be subject to the terms of use applying to those sites.

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