Money transfers through banks 'costing Britons millions'

Britons are wasting millions of pounds a year by making money transfers through their high street bank.

Indeed, small and medium-sized businesses in the UK are wasting up to £280 million collectively according to a study from Travelex.

The research found that more than 80 per cent of companies surveyed are using their bank to make money transfers, despite the fact that they are charged between £25 and £40 each time they move currencies internationally.

Using a foreign exchange specialist could substantially lower this cost and setting up forward contracts and investigating different options will also benefit companies and individuals looking to move money overseas.

France, Germany, the US and Spain were identified as the most likely places to transfer money to.

In addition to using a foreign exchange specialist to transfer money abroad, some expatriates and international businesses might want to look into using a multi-currency bank account.

On offer from a range of major banks, these facilities allow you to hold your funds in a variety of currencies through a single account.

This could help you to make use of currency fluctuations and the technique is also becoming popular with people earning in one currency and paying for bills in another.

Jakob Pfaudler, managing director of Lloyds TSB International, explained the the Telegraph: "It then makes perfect sense that offshore accounts would rise in popularity because they dramatically reduce the charges and punitive exchange rates incurred when moving money between two countries."

But Jason Gaywood, senior consultant at currency specialists HiFX, warned expatriates to be aware that the convenience of multi-currency accounts will not necessarily mean they are getting the best deal.

He told the paper: "Expats should, however, remember that holding separate accounts multiplies your banking expenses.

"Each account may involve a separate initial deposit requirement or a minimum account balance thereafter, plus extra bank fees for account maintenance."

It is also possible that the foreign exchange rates offered by the banks between currencies are not as competitive as those on offer from currency exchange specialists.

Click here to see how much you can save with HiFX's Foreign Exchange services

Posted by Sarah Pitton