If you are planning to transfer money to Spain to buy a property, make mortgage payments, buy a boat or simply want to send money to a relative you will need to make an international money transfer. You will be exchanging pounds into euro’s and transferring your funds into an overseas bank account. The amount of euro’s you will receive will depend on the exchange rate at the point of conversion as exchange rates fluctuate second by second daily. You can transfer money to Spain using a high street bank or via a foreign exchange brokerage. This guide will enable you to understand which method is best for you and how to get the best deal when transferring money to Spain.
How to get the best deal
If you want to find the best deal check out our money transfer comparison table, here you will find a list of the best money transfer services companies and banks. Use the table to compare fees and to see which company is best suited to your needs. We would recommend that you contact a couple of providers to check what exchange rate they are offering at a specific time to see who is the most competitive and who is offering the best exchange rate. There are quick and simple contact forms on our site that you can complete to receive no obligation information.
There are two main factors that will affect your money transfer to Spain:
- Fees – These can be displayed in a number of ways, as initial charges, commission or can be applied to your funds either at the sending or receiving end. Ask each currency provider about what fees you may incur if you choose to use their services.
- Exchange Rates – As you will be aware by now, exchange rate fluctuate, many firms that specialise in smaller international money transfer transactions offer a blanket rate for that day (one exchange rate), where as the exchange rate quoted for a larger transaction is more likely to be a live rate and therefore will only be valid for a few seconds. When you are comparing exchange rates make sure you do so over the shortest possible time period as attempting to compare exchange rates given at different times of the day will not show you who is offering the best exchange rate.
Don’t be fooled into thinking that the company offering to transfer your money to Spain for free is the best company to use. Sometimes free transactions are often paired with poor exchange rates that will leave you feeling rather short changed once your currency transaction has been completed. For more information on this and an example of rates V’s fees visit our money transfer guide.
How to compare money transfer deals
The simplest way to compare money transfer deals is to make a note of how much you started off with and how much currency you will end up with.
Transferring money to Spain – Transactions
You will be able to convert your pounds into euro’s using a forward rate contract or a spot rate contract.
A spot contract is the most common type of currency contract used by people when they transfer money to Spain. A spot contract is an agreement to purchase currency at that days live rate. Banks will generally offer a blanket spot rate each day whilst a money transfer specialist will offer live exchange rates that will fluctuate throughout the day. Using this type of currency contract can leave you open to exchange rates moving against you but they can also move in your favour throughout the day. Either way there is an element of risk with this type of currency contract as you cannot guarantee the exchange rate that you will receive.
A forward contract allows you to book an exchange rate for a specific amount of currency on a set date in the future. You can book an exchange rate up to two years in advance and will be required to pay a small deposit in order to secure that rate. The balance of the contract will be paid closer to the maturity date. If you are planning to buy a property in Spain or make a large money transfer to Spain this type of contract will help you manage your foreign exchange exposure. You will be able to see exactly what your currency cost will be and remove any form of uncertainty from your transaction. Forward contracts are not solely used for large transactions they can be used for smaller international money transfers as well such as Spanish mortgage payments etc.
Money transfer companies will offer both of these types of services whilst only a handful of banks will offer you the option to purchase your foreign currency using a forward contract.
Currency Brokers V’s the Bank
If you are planning to transfer a large amount of money to Spain you will want to make sure that you get the best deal. Whilst banks offer a reassuring brand name they often charge high transaction fees and offer uncompetitive exchange rates. Currency brokerages on the other hand offer far better exchange rates with lower or no fees. You may still however feel a little uneasy using a currency brokerage that you have not heard of before. Most currency brokerages are now regulated by the financial Services Authority and are large reputable businesses in their own right. They can offer you specialist currency advice and explain how the currency market has been performing to help you mitigate your foreign exchange exposure and risk.
Visit our money transfer comparison table now to find the best deal for your international money transfer to Spain.
