Currency conversion

August 30, 2011 1:54 AM

Which financial service do you recommend for currency conversion?

The following month I am going to have to convert euros into swiss francs. As the amount I want to convert is higher (about 50k) I am searching the ways how to get to a reasonable exchange rate. I ofter face that banks, although they claim that they provide exclusive rate, do not sound too much reasonable.
Which financial service would you use for currency conversion? Thanks for answers!

posted by fifigyuri to work & money (4 answers total)

I've found that HSBC has very good international currency transactions commissions - you get a rate close to the interbank rates, at the expense of a relatively high transfer charge into the account.

Failing that, the online brokerage outfits like xe.com, fairfx.com, ozforex.com and so on are better value than the standard high street banks. For a non-pocket change amount, you might be able to get a better deal from the online mob.
posted by singingfish at 2:23 AM on August 30, 2011

I used HIFX.COM, not a bank, and they were great.
posted by Elsie at 4:13 AM on August 30, 2011

I use Oanda.com regularly and have never had a problem.
posted by newpotato at 4:22 AM on August 30, 2011

I've also used HiFX and been very pleased with them - good customer service. TorFX is reputedly slightly cheaper than HiFX, but I haven't tried them. If you're transferring 50k, it's worth calling up to see if you can negotiate a better rate than they'll offer you at first online.

My experience of HSBC is that they are significantly worse than the best transfer specialists once you factor in the transfer charge, but I haven't tried to negotiate a 50k deal through them. I compared 10k GBP->SGD at quoted online rates a few weeks back and got HSBC 2.6% over interbank, CaxtonFX 2.3% over interbank, HiFX 1.1% over interbank - you should be able to improve that substantially on 50k.

(CaxtonFX is good for small amounts because it's flat rate, so that's 2.3% on 1k for example, which is better than anyone else I've come across. At that margin, they're obviously not great for larger amounts, although you might be able to negotiate a better deal.)

But there are dozens of transfer specialists now. Just be aware that in many places this is an unregulated market with no protection under banking or investor compensation schemes if anything goes wrong.

The UK seems to be making more effort in this area than many places, so look for someone reputable that is regulated by the Financial Services Authority as an Authorised Payments Institution and check they hold client money in segregated accounts at a major bank. People have lost money before when smaller firms collapsed and had client funds mixed in with the firm.

(Technically, you're still not covered by compensation schemes in the UK because spot forex transactions are an unregulated activity, but as long as the company is genuinely holding funds in segregated bank accounts that are subject to the deposit guarantee, your risk is limited to a brief period of Herstatt Risk.)
posted by Temagami at 6:11 AM on August 30, 2011