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Different Currency Options available for Foreign Exchanges Services
Find out the different types of foreign exchange options available to personal individuals. We have listed below a basic outline of foreign exchange services offered by non-bank providers for Individuals looking to make international payments.
Overseas Regular Transfer Plan
Individuals with monthly or quarterly payment requirements are able to set up a direct debit for their regular transfers. The rate of exchange is based on the set day of the direct debit and removes the hassle of sending payment instructions on a monthly/quarterly basis for those who have regular commitments that need to be met. Certain providers will conduct regular payments for their clients free of charge but there is usually a minimum requirement for this service.
Rate Watch Facility
Most foreign exchange providers offer a rate watch facility whereby an individual can notify their dealer of the rate they are looking for and your private dealer will watch the rate for you and notify you as soon as your specified rate of exchange is achieved.
A spot contract is a one-off payment usually used by clients with an immediate requirement to transfer funds. Clients are offered the rate of exchange at the time they wish to conduct their transaction. A legally binding contract is set-up with the agreed rate of exchange and as soon as the funds are received in full, the money is transferred into the beneficiary account. Most non-bank providers send the money as express payments via SWIFT (Society for Worldwide Interbank Financial Telecommunications) a highly-specialized and secure messaging service ensuring monies are deposited as quickly and as securely as possible into the required account.
This is the buy now, pay later option of foreign exchange. It allows you to fix an exchange rate for up to two years and protect yourself against any movement in the market rates. Clients are offered a rate of exchange to which they agree on a specified timeline (options include 6 months and 1 year). A deposit (usually 10%) is required up front and a maturity date will be set based on the agreed timeline of the client requirements upon which full settlement of funds is expected. This option is popular with clients who would like to remain within a set budget and have international payments due on set dates in the future.
This option is similar to a forward contract but allows you the flexibility to draw down some or all of your funds up to three months prior to the maturity date you have set. If you have to make staged payments for your property or require more flexibility than a forward contract allows this could be ideal for you.
If you've got time to hold out for a really good foreign exchange rate, individuals are able to specify the rate of exchange they would like. A contract is agreed for the provider to purchase the funds on your behalf as soon as the specified rate is achieved. The provider will then transfer the funds when the level is reached.
Types of Foreign Exchanges Services
This option is ideal for when you don't have to make an immediate payment and you have a specific budget available.
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