Whatever your reasons for moving to Madrid, if you come from outside the Euro zone, there will come a time when you need to purchase currency to pay for rent.
There are two options available when purchasing and transferring currency – you can use your bank or take our recommendation and use the services of a specialist currency exchange provider.
1. Avoid the banks! Use a payment specialist instead.
- Banks often set their buying and selling rates for currency first thing in the morning – when you visit a branch, you’ll see them hanging on the wall. Payment specialists, however, do not set the rates in advance but call into the market floor to obtain the best rate possible at the time of the transaction. You may save up to 4% on the cost of the currency by getting better-than-bank rates – On the cost of a £30,000, the savings could be up to £1,200.
- Your funds will be transferred within 1-2 days using a specialist services whereas banks take 3-5 days. Furthermore, unlike the banks, currency companies can eliminate transfer charges and receiving fees imposed by most overseas banks.
- Not only do banks tend to offer customers lower exchange rates but usually charge a commission and transfer fees, all of which can be reduced, if not eliminated altogether.
2. Get the best exchange rate for your payments.
Use a dedicated currency specialist rather than bank personnel that may or may not know the currency markets. Specialists can help you determine a strategy on how to buy currency at the right time for the right price.
Let’s think about the payments you are most likely to make…. They will probably include the following:
- The Deposit which usually consists of 2 rent or up to 8 months for quality property and long-term rents.
- Regular Transfers for rent and living expenses once you are there
These are the recommended payment strategies for renting:
1. Spot Contract – Buy a lump sum of currency needed now or soon.
If you’re renting a property overseas you will need to pay for a deposit and the best option is to use a ‘Spot Contract’. This allows you to purchase and transfer money to your overseas bank or financial institution today (or within days).
2. Forward Contract – Buy currency now at a fixed rate and pay for it later.
A ‘forward’ contract is ideal if you have to make regular payments abroad in a different currency i.e. for rent and living expenses. Forward contracts let you fix your monthly rate of exchange in the future, making sure you know exactly how much you are receiving each month and want to ensure against an unexpected changes (in either direction) in the price of your currency
This guest post was by Alex Willson, from Smart Currency Exchange. If you need advice and help, or need to transfer money for several months, their report is well worth a read. To find out how much you can save (and how to save it), get the free quote and report by clicking here.