Having had to buy Euros several times last year I was amazed just exactly how many companies there have been who bought and sold currency! They all claimed to offer the most effective exchange rates and that they certainly were’ the most effective company to change money’and they all claimed that there is no commission! Wow! no commission! Awesome. I’m saving money already and I haven’t even opened my wallet!
I called among the companies I’d seen on Google and asked for a rate if I were to buy €15,000.00. I’d checked what the bank were offering and also knew what the postoffice were offering so I’d a general idea of what the exchange rate was; from memory it absolutely was around 1.1510 back May 2011.
The guy I spoke to gave me a price of 1.1480! Great… the bank that same day were offering 1.10!! OK I said, I’d like to buy at that price. I was brought back down 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 throughout the day that the rate might be better or worse by enough time my account was opened.
There’s always a catch!!
To open an account I’d to accomplish a form and provided our details, DOB,address etc. I also had to provide info on the foundation 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 several days I was telephoned and told that they’d been struggling to verify my address ( I’d recently moved house ) and therefore I was asked to provide a copy of my passport and a copy of a recently available utility bill! I scanned said items and emailed straight away prop money euro shop. Within 1 hour I received another call to ensure that my account was now active. These guys were certainly thorough.
I asked for a price if I was to buy €15,000.00.
The reply I acquired was… 1.1880… I was delighted! The marketplace had indeed moved and within 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 over the sterling equivalent. My Euros were delivered for a passing fancy day and all in all it absolutely was an excellent experience.
A day later I was chatting to a friend who had also bought some Euros for a passing fancy day that I had. I asked him what exchange rate he received ( gloating a bit!!) 1.1940 he explained!
Then proceeded to describe he had accounts opened with 2 or 3 different brokers. As it happens that although no brokers charge a commission as such they do charge a % on the exchange rate. I’d actually been charged 1% while the exchange rate was just over 1.20… this meant that I’d just paid £125.00 for the privilege of shopping for Euros! I asked my colleague exactly 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 after he first started buying currency he used his bank, realised he was paying an excessive amount of and contacted a broker friend of his who suggested he should open at least two accounts with various brokers and then play one off against one other! Don’t they all work off the same prices I asked? They do he explained however explained that the broker was looking to make as much money on each transaction because they could. At the same time the marketplace was getting so competitive that frequently brokers could afford to undercut one another in order 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 certanly be pretty competitive while if one other broker offered an improved rate I’d simply call one other to see if he could match it!
The moral of the story is this; look around, open a few accounts and simply play one off against one other! They want your business and any profit is profit, irrespective of how small!