By-pass the banks and get currency at much better rates

For most people, sending money abroad for various purposes (replenishing an overseas account, making payments when buying a property, etc) or simply buying some foreign currency banknotes as a part of funding a holiday abroad, has traditionally involved popping along to the bank and arranging the transaction. It will work pretty efficiently most of the time - the bank will make a charge for doing a transfer and, unless you are dealing in pretty large amounts, they will most probably 'sting' you with a pretty poor exchange rate.

When I was making the stage payments for the purchase of my holiday home abroad several years ago the individual payments I had to make were pretty substantial, so like most people I did the transactions though a foreign exchange trading company. For the very finest exchange rates, 'inter-bank' transactions normally begin at GBP5million and up, but if the individual amounts are rather lower (in the several tens of thousands of Pounds, typically the case when buying a property in a series of stage payments as the project progresses) one can still make very significant savings by going though a dealer, rather than simply going along to the bank branch, because even if they call up their own exchange centre to arrange the deal the margin they will take on the deal will be a lot greater than from a foreign exchange dealer. In addition, the foreign exchange dealer will not charge for the actual transfer, unless the deal falls below its own thresh-hold amount. Obviously one still needs to get the funds into the hands of the dealer so they can do the trade; in the days before internet banking (not so very long ago) that would probably mean sending the dealer a sterling cheque, which would take a few days to get there and be cleared by them, or (for a fee) arrange a domestic transfer through the local bank to the bank account of the dealer.

More recently I have been transferring funds once or twice a year to a currency dealer using my internet banking facility with my British bank in order to replenish my account abroad with the funds needed for my extended stays there; doing it only a couple of times a year means both better exchange rates because the amounts are a bit bigger and secondly no transfer charges because the amounts exceed the foreign exchange dealer's minimum amounts for free transfers - their profits come from the spreads they still make on the exchange rate, albeit a lot smaller than the local bank would levy.

However, I like to travel with some of the local currency of wherever I'm travelling to (unless the exchange control rules of the destination country preclude this) so that at least I can pay for a taxi on arrival or perhaps buy meals on the first day or so, before I can get to the bank there to change some money, in the old days in the form of travellers' cheques, in more recent years by sticking a piece of plastic in a cash-machine - and avoid the 'gouging' rates that exchange bureaux at airports typically indulge in. For this initial spending-money cash I have usually just gone to my bank, ordered the money a few days ahead and gone back to pick it up when delivered, paying the currency-note rate charged by the bank and thinking I had few realistic alternatives (apart from, say, going to the Thomas Cook branch in nearby Inverness) where perhaps the rate might be very slightly better.

However, having just a week or so ago done a relatively larger transfer to replenish my Spanish account using a foreign currency dealer (for reference this was World First), with me transferring the payment to them on-line via the internet and it reaching the destination two or three days more quickly than doing it direct from my own bank, as well as achieving a much better exchange rate (with a saving of about 3.5%) I began to wonder if I could get a better rate on-line for currency notes too, for that initial local spending money in Euros - a Google search threw up the compareholidaymoney.com website and the stark divergences in rates offered. The firm at the top of the list Travel FX seems to get a great number of uniformly-positive reviews so I thought I would give them a try. In a nutshell I booked a transaction with them last Saturday morning, transferred payment to them on-line during the weekend and received the Euro bank-notes today (via Royal Mail 'special delivery'), saving myself 3.99% compared with what I would have been charged by my bank locally, in fact the notes rate was not so much different from what a foreign currency dealer would have been offering for a funds transfer, whereas the margin on notes from local banks is usually much greater than for transfers, resulting in a much less favourable deal for bank-notes even than for transfers. As this was the first time I had ordered foreign currency notes over the internet I was slightly anxious that my notes would turn up as promised, but I have to report that I was kept fully informed by email at each stage of the process and the notes turned up here on time today, as agreed when I placed the order last Saturday. I shall most certainly consider using this method and this firm in future. It really is a "no-brainer" so far as I am concerned - technology and the internet have made such processes possible and it would be foolish not to use them.

The perils of online banking ... Grrr!!

UPDATE - see update at end of this post.

I have been using my bank's telephone banking service for several years with absolutely no problem, but thought it would be good to start using the online equivalent, too, specially as I am shortly going to be abroad for several months and it would be easier (and cheaper - remember I am Scottish, he he) to interact with the bank here in the UK when necessary online than on the telephone. Anyway I had it all set-up a week or so ago and it seemed to be working fine.

However I had been told by several telephone helpline people, both from the telephone and online banking helpdesks that the passwords and security codes for the two services were independent of each other. I now discover that this is total nonsense as, according to the lady I have just spoken with at the online telephone helpdesk, when I set up the online service it in fact supercedes the telephone banking password and codes (this is just ten minutes, ten minutes[!], after I had been told by a lady at the telephone banking helpdesk that they are different!!!).

So the scenario half an hour ago was as follows: go online to check my various account balances. No problem - I even printed out a statement for the current account.

Then I tried to log into the telephone banking service to transfer some money between accounts (to settle an interim tax bill before I go abroad), but it wouldn't let me because of password/security code problems (as I now discover because I should have used the same codes as for online banking)!

The result of this fiasco is that I am now locked out of both telephone and online banking until the codes can be reset by 'snail mail' and by telephone. Frankly, Royal Bank of Scotland, this is not a problem I want to have just a few days before I am due to depart for Spain until April! The online banking lady says she is going to make sure there is feedback about giving customers rubbish information (about the interoperativity of password/security codes between the two services). As there is plenty of money in both the accounts that would have been affected by the transfer that started this whole problem, I shall pay the tax bill tomorrow in the old-fashioned way with a cheque at the bank; I simply operate a tax savings account for my own accounting convenience.

Rant over; I'm off to bed! (At least the rotten head cold I've been suffering with for the past 3 or 4 days seems to be on the mend).

UPDATE: (Wednesday 10JAN07 10.20 GMT) Well, the saga continues; I received last Friday the confirmation form which I had to sign and send back to the bank; they apparently did not register it into their computer until yesterday (it is not entirely clear whether they received it yesterday or Monday). In any case, someone at the bank decided to be 'helpful' by requesting that an 'activation code' be sent to me, which another part of the same organisation tells me is completely unnecessary as my signature on the form sent back was adequate to re-activate the account. However, now that the activation code has been reqauested it cannot be stopped so unless it arrives, by some miracle, later today in the post then I simply will not be able to get back online until I get back here in April, nor of course will I be able even to use the telephone banking service. The two departments in The Royal Bank of Scotland that deal with online ('digital') and telephone ('direct') banking hardly seem to talk to each other, the basic reason it seems to me why this whole fiasco has occurred. I'll decide whjat to do about my banking arrangements in the UK when I return in late-April; having banked with them for almost thirty years (my accounts for the ten years prior to that were in London with a small specialised bank) I am reluctant to move, but this recent incident has frustrated me enormously.

On the bright side, however (and I always try and look on the 'bright side' - note cunning reference to Monty Python), I did manage to find locally (in that good old standby shop Woolworths) the two kinds of lithium button cells, CR2025 and CR2032, this morning that I needed for two different pieces of electronic gadgetry I am taking with me and whose back-up cells hadn't been changed for a while.