This is one of the most opaque areas of foreign exchange and it’s remarkably hard to get a straight answer from a currency broker.
It’s also one of the most important elements of using a broker for foreign exchange.
You can read our article on Berry FX (which we own) on how to compare exchange rates which goes through the details but in short.
A bank will charge around 4% for international currency transfers (as standard) a currency broker should charge no more than 0.5%.
Some brokers will charge up to 1% if you don’t lock in fixed and transparent exchange rates when you set up an account with them.
For larger transactions, it is possible to negotiate tighter rates for SME.
It’s also important to understand that this percentage (or fee) is built into the exchange rate and will be the difference between the mid-market price and your exchange rates.
When brokers say zero fee foreign exchange, this refers to no additional fees or commission added on.
If your currency broker won’t tell you what their percentage is, go with a different one as it’s a sign that they are not being transparent with their pricing.
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Richard started the Good Broker Guide in 2015 and has been a broker for 20 years most recently at Investors Intelligence and previously acting as multi asset derivatives broker at MF Global (Man Financial). Richard started his career working as a private client stockbroker at Walker Crips and Phillip Securities (now King and Shaxson) after interning on the NYMEX oil trading floor in New York and London IPE in 2000.