Some online money transfer specialists allow you to lock in exchange rates for your transfer, saving you the trouble of watching the markets daily. Receive a guarantee that you can exchange money at a specified rate in the future. Your currency trade is executed only when a currency reaches a price you’ve set beforehand. These tools help you delay orders until the exchange rate is in your favor, create recurring transfers and even buy currency as a failsafe if the exchange rate is trending against you. Hedging options are tools that can help you save more money when used correctly.
If the USD is gaining strength against the currency you want to send to, consider waiting to see how high it will go before you buy. Staying on top of currency exchange trends can help save you money. Either way, you’ll almost always save money by comparing money transfer specialists and avoiding your bank. Others will charge you lower fees and offer a slight markup on the exchange rate. Some online money transfer specialists will offer the mid-market rate on your exchange while charging you high fees. Use an online money transfer specialist.To get the best rates, you’ll have to look for money transfer providers that aren’t your bank. This transfer would cost you 4,000 JPY - about $30, because of exchange rate markup. Instead, at the rate offered, you’ll receive 96,000 JPY. If you transfer $1,000, you won’t receive 100,000 JPY. In our example above, the mid-market rate used by banks is 1 USD = 100 JPY, but the rate the bank will offer you may be 1 USD = 96 JPY. Instead, your provider adds a margin on top of the exchange rate to make money. When you convert money through a money transfer provider, you likely won’t get the mid-market rate. This is the rate that banks use to trade money with one another. For example, the mid-market rate between the US dollar (USD) and Japanese yen (JPY) could be 1 USD = 100 yen. Market demand dictates how much one currency is worth compared to another currency - this is the mid-market rate. As they do, they increase and decrease the value of currency. Every day, traders buy and sell currency on the forex market.