Everybody's first option is their bank. Their reputation speaks volumes and is rarely discredited. So yes I can understand why people when buying property abroad use their bank as the first option. It would also appear that most times they don't even get a second quote.
Whilst I would want to criticize them for lack of financial savings skills, I can also understand that they don't want any headaches; more importantly why should they worry when the banks are offering 0% commission?
Here is the answer... More pennies in your pocket. Why? Allow me to explain further.
In every deal, even at the supermarket, everybody is trying to convince you that they can save you money. My teenage children ask me why there are sofa adverts just before a 'bank holiday'? 40% of Sofa's, 50% of Sofa's and no payment for 2 years... It's not the deal but the bottom line. If you have £1,000 for a sofa, which sofa can you get?
When exchanging currencies the same principle applies. If you are changing £100,000 into Euros and the Bank is offering 0% commission they may give you 122,000 Euros. They are buying the currency wholesale and adding between 3% to 4% profit on top. Currency Brokers however using the same principle would give you 125,780 Euros; their profit margin is almost 1%. The saving is almost £3,000!
It is the bottom line... what will you eventually get for your transfer?
By using what can only be called the new modern system you save yourself £3,000; the larger the amount the better the deal using the Currency Broker. Here are three further real case studies:
Currency Exchange Case Study 1 - Elaine and Robert were buying in Northern France; a second home, but one that required a certain amount of renovation. In November 2007 the Euro had taken a bit of a tumble, so it was imperative that they got a good deal on their currency exchange to help with funds for renovation. The property purchase price was £76,000. Their bank had quoted an exchange rate of €1.33 / £1; whereas the broker secured a good price of €1.35. This was a particular good deal as days either side the broker could only secure a rate of €1.34. The exchange at the bank would have returned €101,080. The broker successfully secured €102,600; saving them €1,520 (£1,125). Elaine and Robert were happy with this saving as Robert had earmarked an inexpensive DIY kitchen.
Currency Exchange Case Study 2 - Ines and Kevin from Glasgow were buying a Duplex in Spain, January 2008; it was a strange scenario, they were renting before they bought. They had lived in Spain for approaching 11 months and had left their house sale money in their bank in Scotland. Because of their purchase they had been advised to use a broker. Rather than use the broker that the building company recommended, they had chosen to look on the internet. Fortunately they had found a Currency Broker. Most brokers can always beat a bank's quote, it isn't so easy to beat another broker. The Currency Broker saved Ines and Kevin €1,300 Euros over another broker, but nearly €6,200 Euros against the banks
Currency Exchange Case Study 3 - Helen and Darren from Bootle in Cheshire had taken 9 months to purchase a villa in Pescara in the Abruzzo region of Italy for €650,000; January 2008. Sadly when a house purchase takes so long there can be fluctuations in the currency rate, and on this occasion it wasn't in Helen and Darren's favour. So it became even more important to save on the currency exchange. Had they gone to a bank they would have paid €8,100 more than what they paid a Currency Broker. They successfully managed to save them £6,090.
Helen had pointed out to me a consideration that since there are British banks that operate in Spain, you can just make your money transfers from the UK to the Spanish branch of the same bank and pay no charges at all, but unfortunately that's not possible. These banks are British by name but are totally separate from their British parents. To name but a few there are Barclays, the Royal Bank of Scotland (affiliated to the Santander bank) and Solbank, owned by Banco Sabadell, then of course the other big two Halifax and Abbey (Abbey also being affiliated to Santander Bank).
Financially savvy people prefer to leave overseas money transfer requirements up to their foreign currency brokers. These specialists operate on behalf of hundreds of clients and get much better conditions in the currency wholesale markets, just like financial brokers do for investors who invest their savings on collective investment funds to get a better return.
Always get two or more quotes when transferring large amounts of money overseas.
Copyright (c) 2008 Phillip Booker
In the early 1800's until the mid 1900's, the value of currencies was weighed against the prevailing gold standard at the time. It was a common standard in which several countries assigned a physical value of gold against the legal tender in circulation. It was in the late 1800's that the United States also practiced this gold standard and it was at this time that the U.S. dollar took over the British pound as the standard bearer.
Shortly after World War II, most major currencies used the U.S. dollar to peg their local currency. This happened as a result of the Bretton Woods Accord of 1944 wherein the United States, Britain and France agreed on pegging foreign currencies against the U.S. dollar. This move was done to prevent another financial collapse reminiscent of the 1930's global depression. The Bretton Woods Accord offered several features:
1. Predetermined but flexible exchange rates 2. Creation of the IMF (International Monetary Fund) 3. Birth of the World Bank
Shaping the foreign exchange market
The late 1900's marked significant changes that have molded the foreign exchange market to what it is today:
1. 1978 - IMF proposal to make currencies "free-floating", allowing currencies to fluctuate without much intervention from concerned central banks 2. 1979 – the birth of the European Monetary System 3. 1998 – the Euro makes its first appearance which integrated the European Union's currency into just one
The ForEx of today
With the advent of numerous means of communication and technology, currency exchange services of today have taken a whole new light. Gone are the days where physical exchange of money needs to take place. Nowadays, as long as a person is connected to the Internet or wireless communication, foreign currency exchange services and transactions can occur.
It's no longer unusual to see a trader doing foreign exchange transactions in the comfort of his abode while sipping a hot cup of coffee. Modern technology has also made foreign currency exchange service transactions to happen at superfast speeds and any rise and fall on the exchange rate can already be monitored in real time. These developments have also enabled foreign trading to be done across countries.
Handy helpers
Nowadays, many companies and online services are available that offer excellent foreign currency exchange services in a safe, secure and hassle-free manner. Taking cue from modern technology practices, these companies offer foreign currency exchange services using the following modes:
1. Using the Internet – do your forex trading with a simple click of the mouse. Most online finance services present a secure and convenient way to do forex trading online 2. Wireless communication – use your handy mobile phone in doing your daily forex trading. A lot of finance service programs allow you to do foreign currency exchange services anytime, anywhere using your mobile phone
Foreign currency exchange services have surely come a long way from its roots in the middle ages. The changes over time have afforded us the advantage of enjoying forex trading in the most convenient, safest and hassle-free manner.
What lies in the future?
Knowing how modern times have molded the foreign currency exchange services that we know today, who knows what great changes are in store in the future? As marketplaces become more seamless everyday, the time will come that foreign currency exchange services can be done with a snap of a finger.
What is important now is that we have useful allies online that assist us in all our currency exchange service needs. It is like a friend that is always there, anytime, anywhere - ready to lend a helping hand when foreign currency exchange service transactions get to be too complicated for us to handle. Modern life is indeed so beautiful and amazing!
Both Phillip Booker & Articlemaxpro are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
Phillip Booker has sinced written about articles on various topics from Finances, Property Guide and Finances. Mr. P. BookerSenior Currency Expert and Columnist.To get a free no obligation Currency Broker Quotation for Exchanging Your Cu. Phillip Booker's top article generates over 9900 views. to your Favourites.