How to convert £2-400k to €?
Discussion
What’s the quickest, most reliable and most cost effective method of converting a large balance from £ to € please gents? We have online accounts with First Direct, HSBC and an online currency account with HSBC which is where we would like to hold the € balance. Using forex spot trading seems to be the best way, but I’m struggling with working out how to do it. I opened a practice/demo account with OANDA to try to figure it out but it seems hopelessly complicated. Given the sums involved, there would be a €10-15k difference between OANDA and tourist rates, and €3-4k between OANDA and Transferwise if this were possible with Transferwise (it probably is but it seems to take too long as well as being an unusual transaction, £ to € in the same country).
Is there a step-by-step idiot’s guide to these things somewhere please?
Is there a step-by-step idiot’s guide to these things somewhere please?
I don’t think FX trading is the way to do it.
Have you tried these guys? Seem reputable.
https://www.worldfirst.com/uk/
Have you tried these guys? Seem reputable.
https://www.worldfirst.com/uk/
We use world first and pay 0.25% off interbank rate.
Once set up very simple to use;
1) book the trade
2) transfer currency to world first (bacs or sepa depending which way we’re moving the currency)
3) receive cleared funds from World First
Usually takes 3/4 hours to get from #1 to #3.
Once set up very simple to use;
1) book the trade
2) transfer currency to world first (bacs or sepa depending which way we’re moving the currency)
3) receive cleared funds from World First
Usually takes 3/4 hours to get from #1 to #3.
The physical FX market is still a pretty murky place. There are plenty of houses that will offer a service but you must do a good amount untnof research before you pick one as they will gauge your eyes out at any opportunity.
The key is to first know what the true market rate is. The second is to not reveal which direction you are trading. The most common ruse is based around the client revealing their direction of trade and the broker offering what looks like a tight spread but it is around a house ‘spot’ rate that is 50-100 points against you. Nice eh?
In theory, you bank will be sitting at the most expensive end but unless they have farmed out their retail fx to another operator (look closely at the small print on their website as to who is actually your contractual partner!) then they will at least be quoting around true spot.
Use a retail platform such as Oanda to see a good indication of where the real spot market is. Then you have to phone half a dozen physical FX brokers and ask them to quote you their two way price for the size you are looking to execute. Many will try to insist that you open an account first but you should stand your ground and just explain that you are looking for an indication of their spread around the market first.
The most important thing to remember is that not a single person that you speak with will have any intent of doing you any favours.
As a basic guidance you should be looking at a spread of 25-50 pips around spot.
The key is to first know what the true market rate is. The second is to not reveal which direction you are trading. The most common ruse is based around the client revealing their direction of trade and the broker offering what looks like a tight spread but it is around a house ‘spot’ rate that is 50-100 points against you. Nice eh?
In theory, you bank will be sitting at the most expensive end but unless they have farmed out their retail fx to another operator (look closely at the small print on their website as to who is actually your contractual partner!) then they will at least be quoting around true spot.
Use a retail platform such as Oanda to see a good indication of where the real spot market is. Then you have to phone half a dozen physical FX brokers and ask them to quote you their two way price for the size you are looking to execute. Many will try to insist that you open an account first but you should stand your ground and just explain that you are looking for an indication of their spread around the market first.
The most important thing to remember is that not a single person that you speak with will have any intent of doing you any favours.
As a basic guidance you should be looking at a spread of 25-50 pips around spot.
All that murkiness of the forex market is what’s really scary. I’m sure it’d be quite clear if I had a few clear weeks or months to spend reading lots and getting to grips with it, but I don’t want to become a currency trader and without that initial effort, it feels too complex. Weirdly, I have no problem with extremely complex and detailed anatomy, physiology, biochemistry, pharmacology and even legislation surrounding clinical trials, drug development and licensing, but working out how to convert some £ to € seems to defeat me! I still don’t quite understand these pips and spreads...
The simple suggestion to just ask my bank has been extremely useful, thank you very much! I must admit, I thought the bank would use their published tourist exchange rates and hadn’t even considered asking any further. I’ve just been on HSBC’s online chat and asked them whether I can transfer money directly from my HSBC GBP account to my HSBC EUR account, what rate they use if this is possible and what would the other charges be. The reply was that I could do a simple direct transfer which is instantaneous unless I set it up to happen at a specific time in the future; they use the live interbank rate applicable at th time of the transfer; and as the transfer is between two accounts in HSBC (in the same branch, no less!), there would be no fees applied. This sounds like the simplest and most elegant solution all round! I’m not at home at the moment but I will try a £100 transfer and see what I get in return. If this is all I need, it’d be great as we were getting very uncomfortable with the idea of transferring such large amounts between institutions and possibly countries.
I will have a look at opening a World First account both in case the trial above doesn’t go as well as I hope, but also to bring home some income from international sources. It looks like a much easier way than the multiple transfers I have been doing till now. Thank you very much everyone! I will report on the success or failure of my experiment with the HSBC accounts later on.
The simple suggestion to just ask my bank has been extremely useful, thank you very much! I must admit, I thought the bank would use their published tourist exchange rates and hadn’t even considered asking any further. I’ve just been on HSBC’s online chat and asked them whether I can transfer money directly from my HSBC GBP account to my HSBC EUR account, what rate they use if this is possible and what would the other charges be. The reply was that I could do a simple direct transfer which is instantaneous unless I set it up to happen at a specific time in the future; they use the live interbank rate applicable at th time of the transfer; and as the transfer is between two accounts in HSBC (in the same branch, no less!), there would be no fees applied. This sounds like the simplest and most elegant solution all round! I’m not at home at the moment but I will try a £100 transfer and see what I get in return. If this is all I need, it’d be great as we were getting very uncomfortable with the idea of transferring such large amounts between institutions and possibly countries.
I will have a look at opening a World First account both in case the trial above doesn’t go as well as I hope, but also to bring home some income from international sources. It looks like a much easier way than the multiple transfers I have been doing till now. Thank you very much everyone! I will report on the success or failure of my experiment with the HSBC accounts later on.
When you do a transfer between HSBC accounts then you have something like 60seconds to accept the rate.
Before you plan to do it I would get someone reliable to check the interbank rate and then you can see what rate they’re really offering you.
Pips is how currency traders say percentage so 25-50pips is 0.25-0.50% from interbank.
Spread is the rate difference between buy and sell a specific item (equity, currency, gilt, fruit and veg) so for example with random numbers if you see a mid rate for apples of £1 the spread could be £0.90/£1.10.
Therefore that they,re saying to you is:
- we will give you £0.90 whetevers for your each apple.
- we will sell you 1 apple for £1.10.
- therefore the trader could make a profit of £0.20 per apple.
Before you plan to do it I would get someone reliable to check the interbank rate and then you can see what rate they’re really offering you.
Pips is how currency traders say percentage so 25-50pips is 0.25-0.50% from interbank.
Spread is the rate difference between buy and sell a specific item (equity, currency, gilt, fruit and veg) so for example with random numbers if you see a mid rate for apples of £1 the spread could be £0.90/£1.10.
Therefore that they,re saying to you is:
- we will give you £0.90 whetevers for your each apple.
- we will sell you 1 apple for £1.10.
- therefore the trader could make a profit of £0.20 per apple.
Forget about ‘fees’. It’s the same with commission. The money is made on the bid offer spread. Note how HSBC haven’t revealed what that is but instead told you that there are no fees 
The whole fee/comm thing is about sales and marketing to make it sound cheap and to steer consumers away from asking about the spread.
HSBC won’t be crossing at spot but applying a spread and in order to know whether you are going to be paying them £1 or £50,000 for the transfer they need to tell you what their spread around the market is.
For a good indication of the true market just use IG.com. They amalgamate their fx quote from a series of destinations and add a pip or two to deliver their OTC trading prices.
You should be able to save thousands by using a physical FX broker even if you have to pay a £50 CHAPS fee to get the Euros over to your HSBC Euro account.
I cannot stress enough that unless you spend a few hours calling around then you will pay absolutely thousands more than you need to.
And frankly when talking to the shops give the impression that you’ll be wanting to do the same size transfer most months going forward, trading either way. That will give them a boner and helps them focus on offering a fair spread.
The whole fee/comm thing is about sales and marketing to make it sound cheap and to steer consumers away from asking about the spread.
HSBC won’t be crossing at spot but applying a spread and in order to know whether you are going to be paying them £1 or £50,000 for the transfer they need to tell you what their spread around the market is.
For a good indication of the true market just use IG.com. They amalgamate their fx quote from a series of destinations and add a pip or two to deliver their OTC trading prices.
You should be able to save thousands by using a physical FX broker even if you have to pay a £50 CHAPS fee to get the Euros over to your HSBC Euro account.
I cannot stress enough that unless you spend a few hours calling around then you will pay absolutely thousands more than you need to.
And frankly when talking to the shops give the impression that you’ll be wanting to do the same size transfer most months going forward, trading either way. That will give them a boner and helps them focus on offering a fair spread.
Here you go: https://www.ig.com/uk/forex/markets-forex/gbp-eur
Tomorrow morning put those bid and offer quotes into Excel and create a field that is the mid price. That’s going to give you a pretty good answer as to what spot is. (There is no centralised exchange for fx so no real spot price, IG’s price is an amalgamation of several feeds and they have to keep their spot very close or people like me will arb then for fun
).
Keep that webpage open and refreshing (Incant seenif they are streaming the data or publishing snapshots), keep your excel page open and start talking to fx brokers. When they are giving you their two way spread, type it into excel at the same time as typing the latest spread from IG. That will help you see if they are quoting around spot and how wide their spread is.
You need to do that for half a dozen brokers and you’ll start to get a feel for fair value. If a broker won’t give you a live and tradable spread then that tells you all you need to know. Same as if a broker gives you a tight spread where the spot transpires to be a long way off the market.
Tomorrow morning put those bid and offer quotes into Excel and create a field that is the mid price. That’s going to give you a pretty good answer as to what spot is. (There is no centralised exchange for fx so no real spot price, IG’s price is an amalgamation of several feeds and they have to keep their spot very close or people like me will arb then for fun
). Keep that webpage open and refreshing (Incant seenif they are streaming the data or publishing snapshots), keep your excel page open and start talking to fx brokers. When they are giving you their two way spread, type it into excel at the same time as typing the latest spread from IG. That will help you see if they are quoting around spot and how wide their spread is.
You need to do that for half a dozen brokers and you’ll start to get a feel for fair value. If a broker won’t give you a live and tradable spread then that tells you all you need to know. Same as if a broker gives you a tight spread where the spot transpires to be a long way off the market.
DonkeyApple said:
Here you go: https://www.ig.com/uk/forex/markets-forex/gbp-eur
Tomorrow morning put those bid and offer quotes into Excel and create a field that is the mid price. That’s going to give you a pretty good answer as to what spot is. (There is no centralised exchange for fx so no real spot price, IG’s price is an amalgamation of several feeds and they have to keep their spot very close or people like me will arb then for fun).
Keep that webpage open and refreshing (Incant seenif they are streaming the data or publishing snapshots), keep your excel page open and start talking to fx brokers. When they are giving you their two way spread, type it into excel at the same time as typing the latest spread from IG. That will help you see if they are quoting around spot and how wide their spread is.
You need to do that for half a dozen brokers and you’ll start to get a feel for fair value. If a broker won’t give you a live and tradable spread then that tells you all you need to know. Same as if a broker gives you a tight spread where the spot transpires to be a long way off the market.
I will try do that, thank you very much. I'll start by calling IG and then take it from there.Tomorrow morning put those bid and offer quotes into Excel and create a field that is the mid price. That’s going to give you a pretty good answer as to what spot is. (There is no centralised exchange for fx so no real spot price, IG’s price is an amalgamation of several feeds and they have to keep their spot very close or people like me will arb then for fun
). Keep that webpage open and refreshing (Incant seenif they are streaming the data or publishing snapshots), keep your excel page open and start talking to fx brokers. When they are giving you their two way spread, type it into excel at the same time as typing the latest spread from IG. That will help you see if they are quoting around spot and how wide their spread is.
You need to do that for half a dozen brokers and you’ll start to get a feel for fair value. If a broker won’t give you a live and tradable spread then that tells you all you need to know. Same as if a broker gives you a tight spread where the spot transpires to be a long way off the market.
When I wanted to do a trial £100 transfer between the two HSBC accounts, the rate they gave was 1.11 which is well below even Post Office or Travelex tourist currency, so I just cancelled it and didn't go ahead. I've done a trial transfer with World First which was at an exchange rate of 1.1439 which is better but still not the best. That's still nearly EUR 5000 worse than buying EUR from IG. It is likely that we will do several of these transfers over the next few months so EUR 5000 difference at a time would soon add up to a substantial amount.
The Moose said:
I've not been able to beat Transferwise with any broker or other forex service.
We recently did more than you're looking at. I think their limit is a million.
I think they charge a flat .5% over spot, although they don’t say how they calculate or derive their spot. At half a percent that’s not too bad and about where most physical brokers would tend to pitch a one off, descent sized transaction. The advantage is that they are probably better capitalised and more secure than a lot of those other houses. We recently did more than you're looking at. I think their limit is a million.
The risk aspect starts to get very important the larger the amounts you’re auctioning and it’s relevence to your financial security. At the point that you wore over your GBP for settlement to the moment the EUR arrives into your bank account that money is exposed to a total loss scenario.
This is why for certain sums paying a bank’s extra charges makes sense as your money remains covered throughout (assuming you bank is transacting physical FX through it’s banking or an appropriate license etc)
Security in transit is what most consumers will give away for a free biscuit and it’s another of those key aspects that is never talked above it or considered. Given the type of individuals who are commonly found as owners of physical FX shops then I would argue that risk tends to be a lot higher than any average client could ever be hoped to appreciate.
That’s where I think a firm like Transferwise scores. Not that it offers any kind of additional protections in real terms over other shops but rather because it arguably has better funding and they can’t really hire the most bent people in the industry.
QuickQuack said:
I will try do that, thank you very much. I'll start by calling IG and then take it from there.
When I wanted to do a trial £100 transfer between the two HSBC accounts, the rate they gave was 1.11 which is well below even Post Office or Travelex tourist currency, so I just cancelled it and didn't go ahead. I've done a trial transfer with World First which was at an exchange rate of 1.1439 which is better but still not the best. That's still nearly EUR 5000 worse than buying EUR from IG. It is likely that we will do several of these transfers over the next few months so EUR 5000 difference at a time would soon add up to a substantial amount.
Don’t bother calling IG. You’ll get nothing as they don’t sell what you’re looking for. They do not offer physical FX. That link is all you need as it’s their quote on the currency pair and the mid point between the bid and offer gives you a pretty live and accurate indication as to where spot is. You can’t buy anything until you know fair value and that is what that link gives you. When I wanted to do a trial £100 transfer between the two HSBC accounts, the rate they gave was 1.11 which is well below even Post Office or Travelex tourist currency, so I just cancelled it and didn't go ahead. I've done a trial transfer with World First which was at an exchange rate of 1.1439 which is better but still not the best. That's still nearly EUR 5000 worse than buying EUR from IG. It is likely that we will do several of these transfers over the next few months so EUR 5000 difference at a time would soon add up to a substantial amount.
If you phone them up you will just have a conversation with a 12 year old who knows less than you.
You also can’t test HSBC with a £100 trade and get a fair indication of what their spread is for a £200k transaction. You need to specifically ask them what their spread is for the transaction size you are targeting. You want to know how may pips, points they quote either side of that IG spot that you’ve calculated.
QuickQuack said:
I will try do that, thank you very much. I'll start by calling IG and then take it from there.
When I wanted to do a trial £100 transfer between the two HSBC accounts, the rate they gave was 1.11 which is well below even Post Office or Travelex tourist currency, so I just cancelled it and didn't go ahead. I've done a trial transfer with World First which was at an exchange rate of 1.1439 which is better but still not the best. That's still nearly EUR 5000 worse than buying EUR from IG. It is likely that we will do several of these transfers over the next few months so EUR 5000 difference at a time would soon add up to a substantial amount.
If using WF you really need to speak to them as this morning I'm being offered 1.1578!When I wanted to do a trial £100 transfer between the two HSBC accounts, the rate they gave was 1.11 which is well below even Post Office or Travelex tourist currency, so I just cancelled it and didn't go ahead. I've done a trial transfer with World First which was at an exchange rate of 1.1439 which is better but still not the best. That's still nearly EUR 5000 worse than buying EUR from IG. It is likely that we will do several of these transfers over the next few months so EUR 5000 difference at a time would soon add up to a substantial amount.
Marcellus said:
If using WF you really need to speak to them as this morning I'm being offered 1.1578!
That was another handy tip, thank you very much! I rang them up and spoke to a real person today. Apparently they do use different rates (am I correct in thinking this would be termed the “spots and spreads”?) depending on the size of the transaction and given the size of the our planned amount to convert, it would’ve been just under 1.16, ie a lot closer to the IG benchmark. They don’t seem to be a fly-by-night operation and seem reliable, so we are wondering if they’ll be as secure as doing the whole transaction through HSBC; that security is worth a hell of a lot to us. DonkeyApple, you mentioned security in transit and how many consumers will give it away for little return. That’s exactly what’s on our minds; we don’t want to risk such a large amount of personal funds. We could take a big pounding and survive; we have had to deal, both financially and personally, with being defrauded out of £90k by family. However, this is much larger than even that and we would be in a very difficult position if we were to lose it all. Without there being any come back to you from my side, do you think World First is a reliable currency dealer? They seem to have very good reviews, been around for more than a decade, do a fair amount of trades, and they are authorised by the FCA, which covers things I know about but it would be useful to have someone else’s opinion, too.
Security in transit is very hard to gauge just because when we pick up the phone to a physical FX dealer we have no idea of their immediate financial health.
I would favour one of the larger firms but none come under FSCS cover.
One thing I would consider is to ask WorldFirst if they will give the spread that they would on a single £200k transaction on a series of smaller transactions which you will systematically execute as the Euros from the previous one clear into your HSBC account?
The risk of getting caught out with a firm folding, or the owner choosing that particular week to syphon all the client money to his retirement account is terribly slim but if the transaction represents all your worldly wealth as opposed to a small part of it then Inwould always take sensible measures to avoid it, however unlikely. Breaking the amount down into say £40k chunks would achieve that I would generally say. And I doubt the spread difference would be much different in any regards.
I would favour one of the larger firms but none come under FSCS cover.
One thing I would consider is to ask WorldFirst if they will give the spread that they would on a single £200k transaction on a series of smaller transactions which you will systematically execute as the Euros from the previous one clear into your HSBC account?
The risk of getting caught out with a firm folding, or the owner choosing that particular week to syphon all the client money to his retirement account is terribly slim but if the transaction represents all your worldly wealth as opposed to a small part of it then Inwould always take sensible measures to avoid it, however unlikely. Breaking the amount down into say £40k chunks would achieve that I would generally say. And I doubt the spread difference would be much different in any regards.
Another Transferwise fan here - used for a property purchase and it was seamless, transparent and quick.
I did try a couple of currency traders but honestly, if you've ever wondered where the modern Arthur Daley and Del Boy have ended up now webuyanycar and Amazon are up and running...
I did try a couple of currency traders but honestly, if you've ever wondered where the modern Arthur Daley and Del Boy have ended up now webuyanycar and Amazon are up and running...
Gassing Station | Finance | Top of Page | What's New | My Stuff