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:
You can go to a bank or a specialist foreign exchange organisation to convert your money into another currency.
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
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.
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.
As well as keeping an eye on the exchange fees and speed of transfers, look for guaranteed security when transferring money overseas:
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
Check rating scores for things like financial stability and credit-worthiness. Read customer reviews to gauge the service provided
When using an online service, make sure the website address starts with ‘https’ which means the time you spend on the website is secure
Look for money transfer services that have recent accolades, like a MoneyAge award
Use a service that offers personalised advice, helping you get value for money for your circumstances – this is especially important with Brexit looming