Your Free Guide: Save Money On Currency Conversions

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Just by reading this short guide you might find you can save enough money for anything from a weeks rent, to a holiday, or even a home renovation. I'll help you exercise a bit of care about how you convert one currency to another. Of course, the savings you can make depend on how much money you are converting, but if you are transferring the proceeds of a house (as many people moving overseas do), then such savings are certainly possible.

The Three Things That Cost You Money

The three things to look for when assessing how much it will cost you to convert one currency to another are:

1. The Currency Conversion Rate
   Banks and other foreign exchange (FX) companies make their money in the conversion rates they quote you. You will have noticed there are different rates for selling a currency to a foreign exchange provider, and for buying a currency from an FX provider. The difference between the two rates is called the spread. The greater the spread, the more profit the foreign currency business makes from a currency transaction.
2. The Commission % Charged
   Some foreign exchange businesses, most notably banks, will charge a commission on top of any profit they make from the conversion rate they quote you. Other FX businesses will not charge you a commission.
3. TT/Wire Fees
   TT and wire fees are often charged on both sides of a money transfer transaction - one charged by the sending bank and one charged by the receiving bank. Remember to take these into account when comparing the overall cost of converting your money.

The Solution - How To Avoid Paying Too Much

Use a specialist foreign exchange company to convert your money. Specialist FX companies are more competitive because they work harder for your business. To many banks, foreign exchange is a money-for-jam additional service - they can make a huge profit on it simply because many people don't know that alternatives exist.

Whether you are converting 100 dollars or 100,000+ dollars, you can use a specialist foreign exchange company to save money. Never feel as though you are doing too little business to qualify for the savings!

Banks Often Have The Worst Exchange Rates

Most people don't look too hard at the exchange rate they are quoted when they want to convert money - they often don't realise there can be quite a large difference between the rates quoted to them by a bank and the rates they can get elsewhere. This is a major issue for many consumers - they don't realise they don't have to use a bank to convert their money!

If You Are Paying A Commission, You Are Paying Too Much

Many banks will charge you a commission in addition to making a profit from the currency conversion rate they charge you. This double-hit approach is typical of banks - they'll make money off you anyway they can. You don't have to stand for it!

Using A Specialist Foreign Exchange Company

Instead of a bank, I choose to use Elldridge Lynch for all my currency conversion transactions, because:

1. They consistently give me a better rate than I can get anywhere else, for any size transaction.
2. They've been doing this for more than 20 years, so I know I can trust them with my hard earned money.
3. They never charge me any commission on my transfers.
4. They have reasonable TT/wire fees.
5. I can do everything online through their website, so I can transfer money to and from any country in the world wherever I might be in the world at the time.
6. They are open 24 hours, 5 days a week.
7. Their customer service is excellent.

The net result of using Elldridge Lynch for currency conversion is that I no longer feel as though I am getting ripped off when I need to convert one currency into another. The good news is that you can easily save money by using them too!

Step-By-Step: Using Elldridge Lynch To Convert Money

To get started transferring money with Elldridge Lynch, you need to open an account with them. This can be done entirely online from the convenience of your home, almost anywhere in the world. Below I'll walk through the steps involved in doing your first currency transfer with Elldridge Lynch.

Getting Your Feet Wet - No Risk, No Obligation Demo Accounts

If you prefer, you can very easily open an online demo account for free and get familiar with how to transfer money using the Elldridge Lynch website. You basically get pretend money and can do as many test transfers as you need to so that you can avoid making any mistakes with your first real transfer.

Opening A Transaction Account

Before you can make your first real money transfer, you will need to open a transaction account for free with Elldridge Lynch. If you have previously created a demonstration account, you can simply upgrade it to a real transaction account by logging into your account and selecting the option to upgrade your account. Either way, your account application can be done online in less than 5 minutes.

Identification is required to open an account. You can submit this via email, so the process is very simple. You will need to provide two forms of identification - one form of photo ID like a passport or drivers license, and another form of ID like a utility bill that shows the address you use to register an account. The email address you specify during the account opening process will also need to be verified - this is simply a matter of clicking a link in an email sent to your email account.

Once you have provided ID, your account is typically approved within a 24 hour period during the working week. Often it can be approved within only a couple of hours of applying. You will receive an email informing you when your account has been approved. Once that is done, you are ready to do your first currency conversion!

Diving In - Your First Currency Conversion

The first step in setting up your account so that you are ready for your first currency conversion is to create a beneficiary - a recipient of the money that you receive when you convert your money. For example, if you are converting British Pounds into Australian Dollars and paying it into your bank account in Australia, you would create a beneficiary that contains your bank account details in Australia. To create a beneficiary using the Elldridge Lynch website, simply go to My Beneficiaries -> Add A New Beneficiary on the menu bar once you are logged in to your account.

You can create as many beneficiaries as you need, in as many currencies as you need. They are simply a way of channeling the proceeds of your currency conversion. If you want to pay someone else, you can, simply by creating a beneficiary with the bank account details of the person you want to pay.

Note that it isn't essential to create a beneficiary as a first step - you can simply hold the proceeds of your currency conversion in your Elldridge Lynch account and then disburse them at a later date, if you prefer.

Getting A Conversion Rate

The next step in doing a currency transfer is to get an exchange rate for the currencies you want to convert. As shown in the image to the left (click to enlarge), when you are logged in you choose Currency Trading -> Get A Spot Quote from the drop-down menu. This will take you to the page on which you can enter the details about what currencies you want to convert, and the amount of the currency you have to convert.

So, to get a rate for the transaction you want to complete, simply fill out the form as shown in the screenshot to the left. Take care to get the currencies the correct way around! For example, if you have £9,000 and you want to convert it to Australian Dollars, you would specify Great British Pound as the currency you are selling, Australian Dollars as the currency you are buying, and put 9,000 in the Sell Amount box. If you wanted to buy a fixed amount of Australian Dollars instead, you would put that amount in the Buy Amount box and leave the sell amount box empty (as you would then be told in the next step how much GBP you would need to buy that many Australian Dollars).

The next step is to nominate where you want your converted money to go. As shown in the screenshot to the left, this is where you choose a beneficiary (or multiple beneficiaries) that you created earlier. You can also create a new beneficiary at this stage if you choose to.

Alternatively, you can hold the money in your Elldridge Lynch currency account and come back at a later point and disburse it then.

You're Done!

Congratulations! You've just discovered a way to get a great deal on your foreign currency transactions. I trust the information provided here will put you more in control of the process of converting your money and will help you avoid paying a cent more than you have to.

Open an Elldridge Lynch account for FREE now