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Forex broker vs bank: Which is the best option?

Are you fulfilling your long-held dream of living overseas? Perhaps you’re moving abroad for work or need to make an international currency payment for property investment?  You have probably thought about the most efficient way to transfer your money abroad. With so many options available, we’ve outlined the benefits of using forex brokers over your bank. 

What is foreign exchange? 

The foreign exchange market is also known as the Forex Market or the FX Market and is the most actively traded market globally, facilitating approximately $6.6TN worth of transactions daily.  

Foreign Exchange is the conversion of one currency to another. For example, when travelling from Spain to the United Kingdom, one can exchange the Euro (EUR) for the British pound (GBP) on the FX Market. 

The FX market is traded 24 hours a day, 5 days a week and is essentially a network of banks, brokers, individuals’ traders, and institutions determining the value or exchange rate of the world’s currencies.  

While several providers offer foreign exchange, most people tend to believe that banks offer the best exchange rates, but you could secure a more competitive deal by using a forex broker.  

So, how does the foreign exchange market affect you?  

The currency markets are volatile and exchange rates fluctuate dramatically, so this can be risky and costly when converting money from one currency to another. Although exchange rates can move in your favour, they can also move against you and may result in you losing money which could potentially affect your long-term plans. 

Let’s say you’re purchasing a property in Spain for EUR 500,000, Firstly you need to convert British pounds (GBP) to Euro’s (EUR). Today, the British pound to Euro (GBP/EUR) exchange rate stands at EUR 1.17. At the beginning of February 2021, a pound bought EUR 1.12.  

While the difference in the exchange rate may seem insignificant, when purchasing a property abroad for EUR 500,000, could make a significant saving compared to purchasing your property a few months earlier.  

This means the cost of acquiring EUR 500,000 for your property in Spain today is GBP 425,619.36. However, if you converted your funds back in February 2021 this would have cost you GBP 446,428.57. Meaning a cost variance of GBP 20,809.21 on your property purchase. 

So, whether you are looking to make regular payments or a one-off transfer, we have compiled the benefits of using a forex broker compared to your bank to make your international payments.  

Currency exchange rate on digital display in airport

Benefits of using a forex broker vs a bank 

If you need to make international currency payments, forex brokers can offer you a service that transcends banks. 

As banks operate at the mid-market rate, which is the midpoint between the buy and sell prices of currencies – they often overcharge customers by hiding fees and mark-ups in the exchange rate to make a profit. So, if you are making regular international payments, you may be losing thousands of pounds a year in hidden fees and unseen mark ups.   

While forex brokers can access the mid-market rate, they can offer more competitive rates to maximise the value of your currency transaction. 

As banks don’t employ forex specialists, few can offer insight into the unpredictable currency market landscape. In contrast, forex providers assign clients with dedicated account managers who can provide expert insight and reduce the risk of loss on your FX transfers. 

Whether you are sending money to family, paying an overseas supplier, or transferring wages abroad, the level of support you will receive by using forex brokers sets them apart from banks. 

Why does forex matter for those immigrating to the UK? 

Suppose you’re relocating to another country or just moving for employment. In that case, you might find that you must split your life and income between countries, which means making regular transfers between your local currency and GBP. 

Splitting life between two countries can often cause some practical headaches, particularly when two different types of currencies are involved. 

Emigrating is often a complicated and costly process, so sourcing a more competitive exchange rate could make a significant difference to your income and savings. 

Avoid high fees and hidden charges by sourcing a forex broker who can limit your exposure to risk and fluctuating exchange rates and ensure your money goes further so that you can make the most of your move to the UK. 

Forex brokers also offer a more comprehensive range of foreign exchange contracts and currency options, which are extremely useful if you’re purchasing a property abroad. 

Forward contracts are popular options as they hedge against currency market volatility by allowing the sender to lock in a desirable rate up to two years into the future. 

Why choose Halo Financial as your specialist foreign exchange service? 

Whether you are trading daily or making a one-off currency transfer, Halo Financial can offer a better exchange rate and help transact at the best rate by trading at the right time, giving you more for your money. 

Personalised Service  

Here at Halo Financial, our client is more than a number, we focus on your individual and personal needs by fostering long-lasting relationships. You will receive a dedicated Currency Consultant who will provide you with real-time analysis of the direction of currency flows, minimising your currency risk.  

Keeping you informed and updated  

We will keep you updated on market movements in all the ways you tell us to. Whether you wish to receive daily currency insights that keep you up to date on factors moving the markets or a phone call updating you on market movements, you will always be fully informed and in control.  

Friendly, professional, and jargon-free advice  

Foreign exchange is our business, and our Currency Specialists are expert currency analysts, meaning you will enjoy the benefits of dedicated expertise and market data to help you make an informed choice.  

Putting ourselves aside, forex brokers help you navigate the ever-changing currency markets to ensure you can make an educated decision when sending your money abroad. Helping you save time and money. 

If you would like to find out more about how Halo Financial could help you save time and money on your international currency transfers, please do not hesitate to give us a call on 020 7350 5474 or fill in our enquiry form.

Pick your currency, check the rate

✓ Friendly, fast & reliable service ✓ Secure bank transfer ✓ Excellent Competitive rates
  • (No cash, bank to bank transfers only.)