The truth behind currency exchange !

The truth behind currency exchange is that the rates you see are not going to be the rates you actually get. So how can you get the best possible rate ?

Although we have lived abroad for over 10 years,  I have to be honest and say that we  paid little to no attention to exchange rates, simply transferring money between accounts as and when necessary.

However, when looking at transferring larger sums of money it soon became clear that exchange rates movements could have a significant impact on we how much we would get for our buck.  Additional research further revealed that our UK Bank would not necessarily  give us the best exchange rates,  and thus a new word entered our vocabulary – currency brokers !

The truth behind currency exchange

So what is a currency broker ?

“A non-bank foreign exchange company also known as foreign exchange broker or simply forex broker is a company that offers currency exchange and international payments to private individuals and companies. The term is typically used for currency exchange companies that offer physical delivery rather than speculative trading. i.e., there is a physical delivery of currency to a bank account.

Foreign exchange companies are normally distinct from money transfer companies or remittance companies and bureaux de exchange as they typically perform high-value transfers unlike their money transfer counterparts that focus on high-volume low-value transfers generally by economic migrants back to their home country or to provide cash for travelers.”

                                                                                                                      definition by Wikipedia.


So it appeared that we would have to open an account with a currency broker as due to their specialist nature they would be able to provide us with the most attractive rate of exchange. But of course not all brokers are the same, so who to choose ? This was becoming a real minefield ! I spent a ridiculous amount of time trying to find out who to  trust with our hard-earned money. Eventually I narrowed it down to a couple of companies and sent off an email to each requesting further information.  For no other reason other than that I liked the quick and helpful email I ended up choosing to work with Dan from Excel Currencies.

It was a pain-free process to open the account with them, they needed a couple of forms of ID with a UK home address (I used my driving license and recent bank statement) and our account was activated within 24 hours.

With an account set up I started to take more of an interest in the market. Once you start to investigate the world of currency exchange it is quite fascinating (I hear a yawn from my wife). Initially,  I thought that the market rate you saw was the same rate that you received (I hear chants of ‘naive’ from some folk), but the chart below tells the real picture.

The truth behind currency exchange

The truth behind currency exchange

So … based on the 50,000 euro cost of our cave house and using the rates from above you can see the differing costs to us in sterling between using a high street Bank and a currency exchange company.

The truth behind currency exchange

Market Rate:                                   50,000 Euros = 36,702.64 GBP

(this is the rate FX companies/Banks etc buy at).

Avge UK Bank offer:                      50,000 Euros = 37,758.65 GBP

Best Independent FX provider:   50,000 Euros = 37,147.10 GBP   

                                                          (611.55 cheaper than through high street Bank).

That’s quite a difference !

As the time to transfer money grew closer I was hooked on how the sterling was faring against the euro, as a single point movement could be a difference of a couple of hundred pounds ! Dan meanwhile was very good, keeping in contact and giving advise on when the best time to make the trade would be.

The truth behind currency exchange

The transfer deadline arrived and the transaction went smoothly. I was notified by email how much my 50,000 Euros had cost (in Sterling), when they received my money and then when they transferred the Euros to my Spanish Bank account.

I estimate that we saved about 500 GBP by using a currency exchange company instead of our Bank … now that’s a lot of bottles of rioja !

So, the moral of the story is that if you are going to buy a property abroad – get yourself a currency exchange company. Now that’s the truth behind currency exchange rates !

So … Who are one foot in the cave ?

We (Danny and Josie) have spent the last 10 years living and working in the Caribbean. In 2015 we decided we wanted to move closer to family and friends so bought a cave house in the Granada region of Andalucia, Spain. We moved there full time in January 2017. Now we write about our experiences of cave living and how we are adapting to life in Spain.
We also have a Facebook page full of pictures, experiences and information that we have found useful along the way. If its your thing, you can also follow us on Instagram 🙂

5 words related to this blog entry …

Euro – El Euro

Pound (currency) – La Libra Esterlina

Currency Exchange – Cambio de Divisas

Exchange Rate – Tipo de Cambio

To Transfer – Transferir



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