Currency exchange in Portugal

Changing currency values, as well as poor exchange rates and pointless fees from your bank, mean that you could lose thousands of pounds when transferring money to and from Portugal to pay for a property.

You can generally get a better exchange rate by using a foreign exchange specialist, otherwise known as an FX provider, to secure a better exchange rate, not to mention cheaper fees and charges.

For example, if you are thinking of buying a property in Portugal for €250,000, for example, and transfer the funds with your bank, it would cost you up to £198,427 (that’s at the average bank’s exchange rate of €1.274=£1*, plus a £25 transfer fee).

But the same transaction with foreign exchange specialists Currencies Direct, for example, would have cost you £195,771 (by eliminating transfer fees from the picture and using a better exchange rate of €1.277=£1*).

(*Rates correct on 5 April 2016)

Expert advice

• You will usually find that a foreign exchange specialist almost always offers a better exchange rate than a high-street bank, will not charge transfers fees and provides a wider range of services designed to meet your needs.
• There are often ongoing expenses that you will need to pay even after you have completed your move. Most people will still have to transfer money between the UK and Portugal even after they have moved. Thankfully, a currency provider can set up a Direct Debit for you and save you money in the short, medium and long term.
• In order to stay on top of what is happening in the currency market, you should register for rate alerts email notifications and sign up to market newsletters.

Selling a home in Portugal

The exchange rate is also important when selling a property in Portugal, as you may wish to transfer a large sum of money back to the UK.

Some people opt to take out a ‘forward contract’ in this situation. This option will enable you, for a small deposit, to freeze today’s exchange rate even if you do not need to transfer your money until a later date. It is the currency world’s equivalent of ‘buy now, pay later’.

Alistair Cotton, money transfer expert at Currencies Direct, comments: “The currency markets are constantly fluctuating, so when moving a large sum of money, taking advantage of exchange rates when they are in your favour could literally save you thousands.”

Servicing your mortgage or sending everyday funds

When buying a property in Portugal, you may find – whether living in the country permanently or regularly using a holiday home – that you need to make regular transfers from the UK. That could be in order to pay a mortgage or simply transferring money to finance everyday living costs. Whatever the circumstances, you are strongly advised to find a regular transfer service that enables you to make these types of weekly, monthly or quarterly payments hassle-free. But while banks often charge £20 to £40 to transfer money abroad, many FX providers do not charge anything.

Tailored service

All sorts of overseas money transfer providers offer a service tailored to help you. Research and assess your options allowing you to choose products that best suit your needs and requirements.

Spot contracts

Purchase currency today with a view to funding something instantly. Use for:

• Paying bills in Portugal
• Transferring funds instantly across your UK and Portuguese accounts
• Sending money to somebody overseas

Forward contracts

You can fix a rate for up to 12 months, by paying a small deposit now. Use for:

• Purchasing or selling a home overseas
• Large international acquisitions
• Transferring all your money to another country

Frequent transfers

Set up a Direct Debit and even fix the exchange rate for up to one year. Use for:

• Paying your mortgage
• Pension transfers abroad
• Transferring funds for everyday cost of living

Limit orders

You could potentially set an automated currency purchase when your target exchange rate is reached. Use for:

• Maximum benefit when exchange rates move in your favour
• Non-time sensitive transfers

Main reasons for using a FX firm

Because exchange rates can rise and fall, it is important that people develop a clear plan on how to handle their own currencies. To help reduce the risk of currency fluctuations and to increase the chances of securing the best rate possible, it is highly advised that you use a currency specialist to secure the best possible deal that suits you.

• Enhanced exchange rates. There are a wide range of exchange rates available, with some of the best deals generally available through specialist foreign exchange companies, and not the banks, which generally offer a poorer rate in comparison
• No concealed costs or fees. FX providers usually do not charge transfer fees every time you transfer money overseas, unlike banks which generally charge an average fee of £25 per transaction. Many charge a receiving fee as well
• Individual service. A currency specialist will always be available to assist you. Whether it is a one-off payment or regular transfers, they will always guide throughout the process
• The vast majority of FX providers offer their customers a round-the-clock online money transfer service that allows you trade anywhere and at any time
• Swift transfers. Most FX providers can complete a transaction within 24 to 48 hours, unlike a bank that can take up to a week to transfer money abroad
• Safeguard your money. When using an FX provider, always ensure that they are authorised by the Financial Conduct Authority (FCA)

Keeping an eye on the markets

Do not worry if you do not have the time to stay on top of the currency markets. Foreign exchange providers are dedicated to monitoring what is happening in the market on your behalf.

What rate do you want?

You can let your foreign exchange specialist know what exchange rate you are interested in by setting up a rate watch which will let them know what you think is an acceptable deal. The FX firm will assign a member of their expert team to monitor the markets on your behalf.

In contrast, banks generally do not offer this type of currency service because they do not have the time or resources. They will then alert you when your desired rate arrives, and yet you are still under no obligation to actually trade.

Email alert

Stay abreast of currency developments with rate exchanges and market updates by signing up to newsletters and email alerts provided by many FX providers.

The Social Network

From regular tweets on Twitter to posts of Facebook, most foreign exchange firms are active across the main social media platforms providing their followers (and customers) with regular currency news. So join their social networks now.

Currencies Direct is the UK’s leading foreign exchange specialists and has helped more than 150,000 people with overseas money transfers. Visit currenciesdirect.com for more information.