- If you need to send money abroad, then follow these simple steps.
- Step 1; Select a broker and set up a broking account. (Do this as far as you can in advance before you wish to transfer money)..see previous post for how to do this
If you choose to use your own bank to send money abroad then you just need to call them up. They will already have all your personal details on their files.
You will generally get a better exchange rate by passing through a broker though, so you will need to set up an account with them.
You can select a broker by recommendation or Google search.
Having made your choice (or choices) of which broker(s) to use, you will need to set up a trading account with them. This involves NO obligation on your part to deal with them, but it is a legal requirement for them to request a copy of your ID document and proof of address and for you to fill in and sign an application form with them, usually a simple 1 page affair, before they will be allowed to deal with you.
Once the brokerage firm has these documents they will set up an internal bank account for you with the bank they use to process their transactions. This account is purely to hold any monies you send them independently, so you have the security of knowing that your cash is ring-fenced at all times in an independent bank account.
- Step 2; Researching the Deal
When you are ready to send money abroad, call your bank and/or broker(s) and ask for their exchange rate.
- Step 3; Doing the Deal
If you accept a deal, you are now in a legally binding agreement, as your conversation will have been recorded, and your broker will have pressed the ‘Buy’ or ‘Sell’ button on his deal screen at that time to fix the exchange rate on this spot deal.
- Step 4; Sending Your Money to the Broker
Send your money from your bank account to the broker’s bank.. details will be in the deal confirmation email you will receive shortly after doing the deal over the telephone. Remember to include the deal reference number.
Your money will be held securely in your client’s account until it is transferred out.
- Step 5; The Broker Sends the Money to The Foreign Bank Account you have chosen
The email from the broker will request the foreign bank account you wish to have the money transferred into. They will send the money to your foreign bank account, as soon as they have received the money from you, and only when they have received the money from you. For most countries it should arrive the same day.
Some brokers will charge a transfer fee for sending the money abroad of around 35 pounds sterling, some will absorb the cost in the exchange rate they have already quoted.
Read more in my next blog here about other types of foreign exchange contracts which are particularly suitable for purchasing foreign property, or for regularly sending money abroad to another country.
Category: Currency news