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International Money Transfers To and From Germany

In many situations a move to a new country may necessitate the transfer of various amounts of money from your home country. There could be one time transfers or regular monthly transfers. There may be several reasons for these transfers – perhaps you are buying a house or apartment, maybe you want to have your pension, annuity or other retirement monies paid to your new bank in the local currency; maybe you want to shift an investment account to a different currency or take money from an account to buy a car or make some other type of major purchase. In the current climate it is important to understand the best ways to save money on international currency transfers and avoid getting caught up in poor exchange rates and hidden charges.

Finding the best exchange rate and terms

When making an international transfer involving two currencies, the local bank is normally the first place most people consider using. This is understandable, due to familiarity with banks and the assumption that you will receive a good exchange rate. There are also dedicated foreign exchange providers that specialize in international currency transfers. Many of these "foreign exchange providers" are based in the UK.

When shopping around for the "the best exchange rate" some banks' rates may be less favorable and there may be additional charges. Many banks offer a rate around 4% away from the mid-market and may levy an additional charge per transfer. With a foreign exchange provider, free transfers and competitive exchange rates are the norm. So, when making international payments it is important to understand the difference between the exchanges rate, the fees and how these two correlate.


Charges to be aware of include "transfer fees" and any overseas bank fees charged on receipt of the funds.

Exchange Rates:

Some banks may claim to be "commission free" but then build a commission into a poor exchange rate. Where the bank can quote 4% away from the market rate, they may build in their commission and then charge an additional transfer fee. This can become expensive - especially if you are making international payments on a regular basis or buying a property. In order to get the most out of your money, the main question will always be: How much will I get for my money, after any fees and extra charges are taken into account?

To help give you an idea of the amounts you would receive in a currency exchange, you can check the RationalFX currency converter below. This will give you a good indication of current rates and allow you to see the interbank exchange rate. This is the exchange rate brokers and banks use to buy and sell money to one another. Smaller businesses and private individuals cannot use these mid-market rates. These rates can, however, offer an indication of the current trend in exchange rates for various currencies.

Exchange rates can change every millisecond and so when doing a rate comparison it is most effective to do so at the same time or with little time between your requested quotes.

How do the specialized foreign exchange providers calculate exchange rates?

The exchange rate you are offered often depends on a variety of things:

  • The time frame (this is especially important in case you may want to fix an exchange rate for several months)
  • The amount of money involved
  • The stability or volatility of the market
  • The specific currencies you want to exchange

Finding the best rates

When making large international transfers it is always good to shop around for the best exchange rate. Compare your local bank exchange rate against a currency broker. There are many based throughout the UK and continental Europe.

These brokers can help you plan your international transfers within your time frame. If you are making a large purchase, for example, property or a residence then it is better to contact a broker as soon as possible.

This allows them go through the strategies you can use to prevent any major loss due to major market movement. Your account manager will go through the market with you, ensuring that you have a good understanding of any economic factors that could potentially affect your transfer. This allows you to be presented with "the risks vs the rewards".

How much will you normally save using a currency broker?

The average amount you can save when using a currency specialist over a bank is around 2-4%. This means that the savings on converting 100,000 pounds, dollars, euros etc would amount to 4,000 pounds, dollars, euros etc. on the exchange rate alone.

Banks rely heavily on using large spreads to make up for the loss in other parts of their business i.e loans etc. Thus, their exchange rates are normally set twice daily ensuring profitability. Foreign currency brokers will usually allow clients to access live exchange rates. This difference can save you money.

How long does it take to transfer money?

Some currency specialists will offer same day transfers on all major currencies at no cost. (Depending on the currency and its destination country, a transfer may take a day or two longer.) Same day transfers means that you will not be waiting around for your money to arrive in the beneficiary account. You are notified when your currency specialist receives the funds and when your payment has been processed.

Is my money safe?

Foreign currency specialists in England and Wales must be regulated by the Financial Conduct Authority (FCA). This authority regulates the banking system in England and Wales. One stipulation of the FCA is that all client funds are held in a segregated account. Segregation means that your funds are held separate to company funds and are insured and protected by the bank that your currency specialist uses.

How important is timing?

The timing of your currency transfer is important if you are planning to send large amounts. People are often not overly concerned with exchange rates until the time they are ready to make the transfer. There is an element of naivety suggesting that they will achieve a good rate at the last minute. This is incorrect! Even if your funds are not readily available, a currency specialist can help you minimize your risk by ensuring that you are operating at the top end of the market within your given time frame. The market can be extremely volatile and in many cases, the difference in as little as a few days can cost you more money than you intended.

Choosing a currency specialist

When choosing a currency specialist it important that the relevant checks are carried out. When considering a UK based firm the following should be taken into consideration

  • Is the company authorized by the Financial Conduct Authority (FCA)? Companies that are authorized by this governing body are under strict business practice and adequacy requirements.
  • Do they hold client funds in a segregated account separate to company funds? Protecting your money from creditors.
  • Are they registered with customs as an overseas monetary business
  • How long have they been in business? How established are they?
  • Does the company have direct access to SWIFT? The Society for Worldwide Interbank Financial Telecommunication provides a network that enables financial institutions worldwide to send and receive information about financial transactions in a secure and reliable environment.
  • Are they registered by the Commissioner's Office Under the Data Protection Act (DPA) 1998

Article contributed by RationalFX