Take the worry out of transferring money overseas

How to protect yourself from sudden movements in the exchange rate when transferring money abroad


The only guarantee with foreign currency exchange rates is that you can never be sure what will happen next. They are almost impossible to predict, with political storms, announcements by central banks and unexpected economic results sometimes blowing even the most stable currency off course.

This makes life difficult for anyone budgeting with foreign currencies. For instance, you may be buying a house abroad, paying for an overseas mortgage or your regular household bills. You may be dependent on your pension to fund your lifestyle, or have family and friends living abroad that you send money to regularly.

If you don’t know what exchange rate to expect, you won't know how much to budget for each month in euros, which could throw your finances into a mess.

The Irish Times International Money Transfer Service
Fortunately, there is a solution: you can take advantage of favourable exchange rates when they appear and fix the rate on your transfer in advance.

Given the unpredictability of exchange rates, this is a wise move and can be done through The Irish Times International Money Transfer Service, operated in partnership with well-established currency specialists, Moneycorp. This service offers exchange rates that beat the banks’ rates by as much as 2 per cent. It also offers expert guidance on how to make the most of your money, whether this is by fixing your rate or timing your transfer to target a better rate.

Every customer with The Irish Times International Money Transfer Service will be assigned their own personal account manager to help them decide what is best for their finances. Your account manager could suggest methods for fixing your exchange rate to take the worry out of adverse movements. The two most popular methods are ‘regular payment plans’ and ‘forward contracts’.

Forward contract
With a forward contract, you are locking into the current exchange rate in advance for a payment that needs to be made in another currency. It’s not uncommon for exchange rates to vary by as much as 10 per cent over the course of several months, so a forward contract offers peace of mind.

This is attractive to those who are planning to buy a home abroad. It’s especially useful if you are buying a new-build home, which has to be paid for over several months as the development completes its different stages. By fixing the rate you will receive before you need to make the money transfer, you have fixed the price of the home in foreign currency relative to your euros.

The best way of thinking about a forward contract is as insurance against the rate moving in the wrong direction. You will have to pay a deposit to secure the contract and you may not always get the best rate possible if rates change, but you also won’t be hit by the rate unexpectedly moving against you.

Regular payment plan
There are several scenarios that may require transferring money on a regular basis. If you have retired overseas, you are likely to be relying on your Irish pension to live, or you may be earning a salary in a different country to where you are based.

If you have taken out a foreign currency mortgage, you will need to transfer funds every month to pay it, or you may simply need to cover your property’s regular outgoings. Parents may need to pay for school or university fees if their child is studying abroad, while others send money to help their family living overseas.

You don’t want the fluctuating rate of the euro hitting the income you receive or the amount you need to send every month. To guard against this, you can take out a regular payment plan.

This plan allows you to send funds regularly on the schedule you want: weekly, monthly, quarterly, etc. You can fix the amount that you want to be debited from your Irish bank account each time, but the amount you will receive in foreign currency will vary. Alternatively, you can fix the amount you want to receive in your foreign bank account. This will cost you a different amount in euros, depending on the exchange rate at the time. You can also fix both the amounts by locking into the current exchange rate. This option is available for plans lasting between six months and two years.

Whatever option you choose, a direct debit is set up so that a set sum is transferred automatically from one account to the other, so you don't have to worry about missing your payments.

The Irish Times International Money Transfer Service's fees are low: €5 for a standard payment, which takes three to five days to arrive, and €9 for an express payment, which takes just a day or two. When compared to a typical bank's international transfer fees of around €20, this represents a significant saving, especially on your regular transfers.

It’s wise to protect yourself in the volatile world of currency markets. The golden rule is to expect the unexpected. But you can make it less of a worry and open a free no-obligation account today with The Irish Times International Money Transfer Service.