Having had to get Euros many times a year ago I was amazed just how many companies there have been who bought and sold currency! They all claimed to provide the very best exchange rates and that these were’ the very best company to switch money’and each of them claimed that there clearly was no commission! Wow! no commission! Awesome. I’m saving money already and I haven’t even opened my wallet!
I called one of the companies I’d seen on Google and called for an interest rate if I were to get €15,000.00. I’d checked what the lender were offering and also knew what the post office were offering so I had an over-all concept of what the exchange rate was; from memory it had been around 1.1510 back in May 2011.
The guy I spoke to gave me an amount of 1.1480! Great… the lender that same day were offering 1.10!! OK I said, I’d like to get at that price buy fake euros online. I was cut back down seriously to earth when the chap on the telephone said that I’d first need to open an account and then also mentioned that as exchange rates moved each day that the rate may be better or worse by enough time my account was opened.
There’s always a catch!!
To open an account I had to perform an application and provided our details, DOB,address etc. I also had to provide info on the origin of my funds, my reason behind buying currency and the type of my business. I duly returned the documentation and waited for confirmation that my account was good to go.
After a few days I was telephoned and told that they had been struggling to verify my address ( I had recently moved house ) and therefore I was asked to provide a copy of my passport and a copy of a recent utility bill! I scanned said items and emailed straight away. Within 1 hour I received another call to verify that my account was now active. These guys were certainly thorough.
I called for an amount if I was to get €15,000.00.
The reply I acquired was… 1.1880… I was delighted! The market had indeed moved and in my favour. I’d prefer to proceed and buy at that price I said.
I received a contract note within ten minutes and then instructed my bank to transfer on the sterling equivalent. My Euros were sent out on a single day and all in all it had been a good experience.
A day later I was chatting to a colleague who’d also bought some Euros on a single day that I had. I asked him what exchange rate he received ( gloating a little!!) 1.1940 he said!
Then proceeded to spell out that he had accounts opened with 2 or 3 different brokers. It turns out that although no brokers charge a commission as such which they do charge a % on the exchange rate. I had actually been charged 1% whilst the exchange rate was just over 1.20… this meant that I had just paid £125.00 for the privilege of shopping for Euros! I asked my colleague how many Euros he’d bought… €20,000.00 was his reply. It had only cost him £84.00!!!
How had this happened? My colleague then explained that whenever he first began buying currency that he used his bank, realised he was paying too much and contacted a broker friend of his who suggested that he should open at the very least two accounts with various brokers and then play one off against one other! Don’t each of them work off the exact same prices I asked? They do he said but explained that the broker was looking to make just as much money on each transaction while they could. At the same time industry was getting so competitive that quite often brokers could afford to undercut each other to be able to win the business.
I was a tad annoyed but immediately contacted another broker and opened another account. On my next currency purchase I acquired the’best’price from broker A and then called broker B to see if he could improve. If the rate couldn’t be bettered I figured out that the rate must be pretty competitive while if one other broker offered a better rate I’d simply call one other to see if he could match it!
The moral of the story is this; shop around, open several accounts and simply play one off against one other! They require your organization and any profit is profit, no matter how small!