A regular thing
Need to pay pension instalments or mortgage payments into your French bank account? Louisa Heath explains how to make regular currency transfers work for you
Transferring pension, mortgage and other routine payments to France
Relocating to another country is an exciting step, but with such a big move comes stress and a long checklist of mundane things to consider. It’s easy to think, for example, that the simplest way to transfer your funds abroad is through your own bank. However, while you already have an account with your bank, using their services is often not the most cost-effective way to deal with your currency transfer needs.
Many people benefit from the services of a dedicated currency broker, a company which is entirely focused on the business of facilitating international money transfers. This specific focus means that you will always be dealing with people who know how to ensure you have the smoothest transfer possible.
Brokers use a number of tools to take the stress out of managing your money across borders, from online trading platforms to a variety of transfer options tailored to your individual needs.
Swap to a ROP One of the most useful tools for expats is a Regular Overseas Payments (ROP) service, which allows for recurrent transfers to be made automatically without any additional hassle. This is very useful if you have to manage ongoing mortgage payments or need to move pension instalments to your French account.
If you need to regularly move funds of between £500 and £10,000 over a period of six months or more, then a Regular Overseas Payments service is perfect for you. With a ROP in place, your funds will be moved for you automatically on a specified date without you having to do anything beyond the initial set-up, making the process as fuss-free as possible.
Setting up ROPS is as simple as telling the broker which currencies you wish to exchange, the amount you need to move, the frequency of payments and when you need the money to arrive.
Each transfer will be made at a competitive exchange rate, set at the best rate available on the day of transfer and fixed so that it doesn’t diminish during the time it takes your funds to clear.
If you need a specific amount of money in euros each month – say to meet a mortgage payment – then you can also set up a ROP that will ensure that the amount of sterling transferred will match your desired quantity, regardless of what the exchange rate is doing.
Once you’ve put the wheels in motion you’re free to relax and enjoy the French sunshine.
Save on transfer fees One of the major benefits of using a currency broker and their ROP service is in the savings you can make compared to using a bank thanks, in part, to the fact that you won’t have to pay any transfer fees. Many banks will charge a fee on each foreign currency transfer you make, averaging about £30 at a time. If you’re regularly moving money from the UK to France, these charges can rapidly stack up. Based on that average transfer fee, if you use a currency broker you could instantly save up to £360 a year in transfer fees alone.
Banks and currency brokers buy currency from the ‘interbank’ market, apply a margin and sell it on to consumers. The margin applied can vary significantly and make a massive difference to how much you receive. Currency brokers are generally able to secure you more competitive exchange rates than banks – so you get more for your money.
Exchange rates are also volatile, moving on an hourly basis in response to all manner of stimuli. If you don’t keep an eye on the rates, you could move your money when the market has moved against you, undermining how much you’re able to receive.
Some currency brokers will send you regular market updates, keeping you up to date with the exchange rate news that matters to you and helping you plan your currency transfers effectively.
What else can a currency broker offer?
Brokers also provide access to many other services that set them apart from the banks.
If you need to move a single, larger sum of money to fund your move to France or a French property purchase, then you may wish to take out a forward contract, an agreement that can lock in the current exchange rate for up to two years in advance of making the transfer. This is especially useful for those purchasing property abroad, as it allows you to budget effectively and relax in the knowledge that you know exactly what your transfer will be worth no matter what the market does.
Unlike a bank, a currency broker will also assign you a personal account manager, who will monitor the market, keep you up to date with major movements and provide guidance on which transfer service suits you best. Some brokers also have online trading platforms which allow you to make currency transfers 24/7, monitor the status of transfers, amend your account information and view your transaction history.
No worries If the current exchange rate isn’t to your liking then you could make use of either a limit order or stop loss order. A limit order instructs your dedicated account manager to execute your transfer as soon as the target rate you’ve specified becomes available.
A stop loss allows you to set a worst-case rate. If the market falls to this level your transfer will be triggered automatically, protecting your funds from any further deterioration in the exchange rate. Some opt to use both of these orders in conjunction to guarantee that their transfer will occur within a set range, creating greater peace of mind.
While money matters have a bit of a reputation for becoming stressful, currency transfers really don’t have to be complicated. By looking into the options for managing your international money transfers ahead of time you can save time and money and keep those stress levels down.
A Regular Overseas Payments service allows for recurrent transfers to be made automatically without additional hassle