People who go on holiday or a business trip had to go to the bank and ask them to exchange their money for them. They work with currency exchange rates to determine how much foreign currency your savings are worth. Now, holidaymakers and travellers can also exchange their money online. TransferWise is one of the companies that offer online money transfer services. You can read honest reviews of TransferWise here. But why should you always look for a company that works with real exchange rates?
Only One Exchange Rate
Many people make the mistake of thinking that the exchange rate is the rate that a money transfer company charges for the exchange or one currency for another. That is not the case. There is the mid-market rate which determines the rate at any given moment. Because the economy fluctuates, this rate also fluctuates. The value that one currency has in comparison to other currencies is constantly shifting because the economy is alive and changing as we speak. It’s a gradual fluctuation rather than an abrupt one but over the course of the day, week or month, you can still notice some changes. And therefore both money transfer companies and people who want to exchange their money should be on top of things.
Dishonest Money Companies
Many companies, including banks, claim not to charge any transfer fees if you request them to exchange your money for another currency. They state that they make no profit from the transaction and base their rate on the mid-market rate at the time. Sometimes they only set their rate at the start of the day, which is acceptable, but too many companies do charge a fee, even when they say they don’t. At the end of the day, they have still made a lot of profit from people who chose their company to exchange some money.
Changes in Money Transfer World
There was a time when people had to trust that a bank or other financial company told them the truth because they had no access to the real exchange rate. They simply could not find out what the mid-market rate of the day is let alone the mid-market rate throughout the day. That time has passed. You can search online for the mid-market rate and calculate whether a company charges a fair fee or not. You also have digital access to many more companies than the bank in your neighbourhood.
Take Charge of Your Own Foreign Exchange
As we mentioned earlier, it’s important to be aware of the exchange rates if you want to transfer money. See if a bank’s story checks out by suggesting different amounts of money that you want to transfer. Compare their rate with the rate of some other companies to see which company offers you the best deal. If a company advertises with “zero fees” and “o% commission” then that’s what they should offer. No profit should be no profit at all. Being trustworthy is incredibly important, especially when it comes to money affairs.
