If you’re an expat living in, or moving to, the Algarve, you may need to transfer money in from time to time. Whether you are moving large sums to buy a property in the Algarve, or transferring regularly for your living costs, if you live outside the Euro-zone, it’s not just a case of transferring money from bank to bank. There are foreign exchange rates and transfer charges to consider.
Surprisingly, a bank doesn’t always give you the best deal – either on costs or on exchange rates. If you’re moving say, £3,000 sterling, and the rate of the day is 1.3 (for simplicity’s sake), you could reasonably expect to get €3,900 in return. Except that a bank might only offer you a rate of 1.25, plus charge you €30 for the privilege - meaning that your spendable cash after the transfer is only €3,720.
That’s a fair amount of money to ‘lose’. Using a foreign exchange company means that you could potentially save thousands on the exchange rate alone.
Currency exchange companies generally offer better rates than banks, and often they have lower fees as well. If you have a larger amount to transfer, they will negotiate better rates for you too. So how do you know which company to use when there are so many options out there?
It can pay to shop around, but that can be time consuming and, if the exchange rate is dropping, it can cost you money while you’re finding out the details.
GCEN (Global Currency Exchange and Money Services) offer a variety of currency services, and can help to ensure that buyers achieve the best exchange rates plus provide to a stress-free process for those purchasing property in the region.
GCEN can help to protect you against fluctuating exchange rates
Whether you need to exchange a lump sum or set up regular monthly payments, GCEN can help you to achieve the best exchange rate.
Small movements in the exchange rate can prove costly when purchasing a property overseas. Planning ahead and fixing your exchange rate at the time of agreeing the purchase can save you thousands and give you the peace of mind of knowing how much your property in Portugal will cost you.
For example if you intending on purchasing a €250,000 property and agree the sale when the exchange rate is 1.35, your property will cost £185,185.19. If the exchange rate drops to 1.32 when you complete the same property now costs £189,393.94. That’s an extra £4208!
One great product offered by GCEN is a Forward Contract which allows the client to secure an exchange rate for up to a year in advance, taking the risk out of any adverse currency market movements. The currency is bought at an agreed rate and a deposit is paid to hold the rate until the client is ready to complete the transaction. The foreign currency is then transferred to an account of their choice.
Here is an example: John has £100,000 to buy a property in Portugal. He has seen a property and knows that with expenses it will come to €130,000. It is January and he does not need the money until April. The exchange rate he has been offered on a forward contract today is 1.35, which means he will get €135,000 - and he knows he can afford to buy the house. John agrees to this rate and pays a deposit. He then breathes a huge sigh of relief as he has secured the exchange rate and has peace of mind that he will be able to afford his property in 3 months’ time.
Once you’ve bought your property you may also need to send money abroad to cover living costs, mortgage payments or household bills. Wide variations in the exchange rates mean the amount you receive in euros will vary. Using a foreign exchange company like GCEN means you can minimise the risk of currency fluctuations, they will discuss your options for the cheapest, easiest and safest way to transfer money.
With GCEN you can also transfer money by phone and online – they do everything to make it as easy and simple as possible for your money movements.
All foreign exchange companies are required to be registered and authorised by the FCA (Financial Conduct Authority). You can confirm if a company is registered and authorised by checking the FCA website. It’s very important you distinguish if a company is registered or registered and authorised.
Registered companies do not have to provide the FCA with the same level of information as authorised companies do. Authorised companies have to comply with stricter guidelines and provide guarantees over how client money is held. Authorised companies also have to satisfy the FCA with regard to their own financial status.
To find out more, why not visit GCEN – they have offices right here in the Algarve. Their main regional office is in Vilamoura and they also have a sub office further west in Lagos. Having representative offices here in the Algarve means that GCEN understand the buying and selling processes, know many of the lawyers, and most importantly, understand the local banking system.
They understand the needs of clients buying in Portugal, and can offer their knowledge of the currency markets in order to get your money to Portugal in the quickest, most cost effective manner, without being pushy. They ensure you and your lawyer are aware of when money will arrive in Portugal to aid the sale.
It’s vital that you are registered with a currency company to ensure you can always get live up to date rates. Registration with GCEN is completely free and with no obligation to use their service.
A few days ago the rate of Sterling to Euro peaked at 1.41. Today the rate is still excellent at 1.39. If you need to move money, we recommend that you strike while the iron is hot. Lock in your transfer with GCEN today!
If you’re interested in buying property in the Algarve, find over 22,000 properties to choose from with Meravista.com’s fabulous interactive map search.