Emigrate to Australia currency guide
15 July 2016 by News DeskMoney is important when you emigrate to Australia so you need to know about currency exchange in order to avoid problems.
Emigrate to Australia involves currency exchange. Conducted properly, a currency exchange is a smooth, straightforward process. But if you are unprepared, or haven’t considered all your options, it can be a major headache say currency specialists TorFX.
Here’s how currency exchange works; how it can go wrong and how you can avoid common mistakes.
Shop around – Different providers offer different exchange rates. This is because currency works in exactly the same way as any other product on the market; providers buy it wholesale and then sell it on for a higher price to make a profit.
Most banks work from wider margins, meaning the rate they offer is rarely the most competitive. Providers like leading currency brokers send billions of Australian Dollars’ worth of currency overseas a year, so it’s easier for them to make a profit on a smaller margin. As the customer, this saving is passed on to you.
The mistake here is to not shop around. Don’t take the first exchange rate you’re offered as being the only exchange rate available. Check with a few places to find the cheapest, but also take into account factors like customer service and security when choosing a provider.
Emigrate to Australia – currency exchange fees
When you emigrate to Australia there are two ways you can lose money when transferring currency. The first is by getting a poor exchange rate; the second is by being charged fees by your foreign exchange (‘forex’) provider.
Providers like banks often charge you a fee for sending money overseas. This is often at a flat rate, so while it won’t be crippling on large transfers, it can quickly add up to a significant amount on regular payments. Being charged fees and getting a low exchange rate can quickly add up to a significant cost, leaving you with less money.
Shop around to find providers that do not charge fees. Make sure to ask upfront, otherwise you could get a surprise when you trade.
Currency exchange using insecure accounts
Security is a top priority when it comes to your funds. You wouldn’t make an online purchase without checking the transaction was secure – so why should your currency transfers?
Leading currency exchange providers operate segregated client accounts. This means that they keep your money in a separate place to money belonging to the business. If something should happen to the business, your funds won’t be lost along with the company’s money.
Not using a provider who does this leaves your money vulnerable; not a risk you want to take – especially if you’re sending the kind of sum that buys a property.
Ask your provider if they operate segregated accounts; if they can’t say for sure, or the answer is ‘No’, find another provider.
Exchanging on the spot
A common misconception regarding currency exchange is that it has to be done on the spot. You can, of course, make an exchange instantly.
This is done using the rather fittingly named ‘spot rate’, which is the given exchange rate at that particular moment. However, there are other ways of transferring money which may suit you better.
For instance, did you know you could fix today’s exchange rate for up to two years in advance? This is called a ‘forward contract’ and it allows you to know exactly how much money you’ll need to save in order to get the required amount of foreign currency.
It’s perfect for large purchases; fix a strong exchange rate and then buy your currency at that rate further down the line, even if exchange rates have significantly weakened since then.
You can also use ‘stop loss orders’ to set a threshold below which you are not prepared to trade, automatically making the transfer should the market weaken and you become at risk of losing money.
A ‘limit order’ sets an upper exchange rate you’re looking for, with the transfer conducted the instant the market strengthens to hit that rate.
Emigrate to Australia – plan ahead
As noted above, you don’t have to transfer money on the spot. But while lots of people do know that, they don’t realise why it’s so beneficial to plan.
A leading provider may be able to get you a better ‘spot’ exchange rate than places like a high street bank, but this doesn’t mean that the rate is necessarily good overall.
It might have just dropped off in recent days, or be experiencing a period of weakness. Exchange rates fluctuate on a second-by-second basis, with political, economic, social and even geographical factors all affecting the value of a currency.
Imagine ringing your broker to transfer enough money to buy a house and having them tell you that, if you had come to them the week before, you could have either saved thousands in your current tender or gained additional thousands in your target currency. It’s entirely possible.
If you plan to emigrate to Australia, using the methods above allows you to protect yourself from this market volatility. You can fix a rate when it is good, set thresholds to prevent you losing money, or target a rate and get it as soon as the market reaches your goal.
It’s easy for currency exchange to go right
A little bit of planning and shopping around can make a big difference when it comes to currency exchange. Thinking ahead allows you to protect yourself from market volatility and secure a better deal.
Comparing rates will ensure your money goes further, while being picky about providers keeps you safe from nasty surprises.
TorFX are 2016 winners of the Consumer Moneyfacts awards International Money Transfer Provider of the Year and Best Customer Service Provider of the Year.
Contact TorFX: Click here to get a quote or ask for Natalie on +44(0)1736 335234
Want to Emigrate to Australia ? Click here for expert help: Skilled Migration to Australia
Want to get a job Down Under? Click here for expert help: How to get a job in Australia
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Click here for tourist information about Australia: Visit Australia
