Rates on offer from specialist online foreign exchange providers show what a raw deal people transferring money overseas get from the high street, new research has revealed.
Andrew Hagger of money website Moneycomms found that people transferring money overseas on a monthly basis - to pay for property or their children studying and travelling abroad - could be paying up to £600 a year more than they need to by not using specialist providers.
For example, Hagger's research found that transferring AUD$2,000 to Australia cost £1,146.64 with Barclays but £1,093.14 with online specialist Fair FX (which commissioned the research). So the high street Barclays deal, which included fees and charges of £25, was £53.51 more expensive than Fair FX's (which didn't have any fees or charges).
Regarding interest rates, Hagger said: "While some banks may appear to offer a reasonable deal on mainstream currencies such as the Euro and US Dollar, when it comes to lesser used currencies such as the Czech Koruna, Polish Zloty and Swiss Franc the costs are far less competitive."
For example, to transfer 5,000 Polish Zloty with Barclays cost £47.82 more than it did with Fair FX, £42.13 more than Caxton FX, and £39.30 than HiFx. While the difference in cost was smaller for transferring Euros (£36.07 more with Barclays compared to Fair FX).
Hagger said: "Consumers simply don't appreciate that there are cheaper alternatives available and are confused by the combination of uncompetitive exchange rates and transaction fees levied by the banks."
He added: "It has been reported previously that up to 90% of transactions are still conducted through the banks, so there is a huge amount of money to be saved if only consumers took advantage of deals from some of the specialist breed of online brokers such as FairFX ,Caxton FX , HiFX and Moneycorp."