Money transfer from UK offshore building society account to German bank account - ripoff by bank?
Thread poster: Krokodil
Krokodil
Germany
Local time: 10:09
German to English
+ ...
Nov 4, 2005

I wonder whether anyone can offer some advice in the following matter.

A few weeks ago I arranged to transfer about £ 20,000 from a British offshore building society account to my German bank account. I don’t know whether it is an exception among such institutions, but this particular one (Alliance and Leicester) offers the facility of direct transfer abroad without the necessity to transfer money first to a British bank and thence to a German one.

On that particular day the official buy/sell exchange rate was about 1.46 euro to the pound. However, after the transfer had been completed I found that the rate used had been something like 1.43.

For future transfers I am now reconsidering the method I previously used, i.e. via the intermediary of my Barclays account in the UK, but they only permit a maximum transfer of £ 5,000 on any one day. Nevertheless, when I used this method I never checked the exchange rate which was used, so I may have been pushed around here as well without knowing it.

So I have two questions:
- Have I been ripped off by the bank used by the Alliance and Leicester (or is this typical practice), and:
- Does anyone know whether there is a way of transferring large sums in one lot from the UK to Germany so as to avoid being placed at a disadvantage due to bank/exchange rate shenanigans?

Any comments would be appreciated.


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Ralf Lemster  Identity Verified
Germany
Local time: 10:09
English to German
+ ...
Which official rate? Nov 4, 2005

Hi Krokodil,
First of all, please note that I moved your thread to Money matters.

A few weeks ago I arranged to transfer about £ 20,000 from a British offshore building society account to my German bank account.

It's worth noting that, given the amount, this payment wouldn't fall under the regulations for cross-border euro payments even if it was instructed in euros.

I don’t know whether it is an exception among such institutions, but this particular one (Alliance and Leicester) offers the facility of direct transfer abroad without the necessity to transfer money first to a British bank and thence to a German one.

Most major British financial services providers should be able to do that.

On that particular day the official buy/sell exchange rate was about 1.46 euro to the pound. However, after the transfer had been completed I found that the rate used had been something like 1.43.

Which official rate are you referring to? Note that any exchange rate fixing usually refers to a middle rate - there is usually a spread between the buying and selling rates. A 6-cent spread for sterling/euro sounds reasonable for a retail exchange transaction. Economically, trading foreign exchange is no different from any other trading activity: you buy at a lower rate than your selling rate.

If you regularly excecute such transfers, it might be worthwhile opening a euro account in the UK, and having the funds exchanged to euro before instructing a cross-border euro transfer, from the euro account.

Best regards,
Ralf


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Krokodil
Germany
Local time: 10:09
German to English
+ ...
TOPIC STARTER
Money transfers UK > Germany and exchange rates Nov 5, 2005

Hello Ralf,

I didn't put my posting in "Money matters" as I thought that this related to money matters in connection with translation business.

I suppose it might be an idea to open a euro account in the UK, but the interest rates don't seem to be very high and I'm not sure whether this would compensate the losses incurred by the exchange rate on GBP accounts. Maybe one thing to do in future would be to wait until the exchange rate is particularly favourable - up towards 1.50.

I don't know whether the Yahoo currency converter uses any "official" exchange rate, but on the day in question in October both ask/bid were quoted at something like 1.465 with only a small difference between both figures. Maybe the fact that the the difference was so small is what irritated me and made me think I was getting a bad deal. Are there any "better" Internet currency converters, or are they basically similar?

Perhaps you could let me know what the regulations for cross-border euro payments stipulate, for example for larger amounts up to 50,000 GBP, or maybe you could point my attention to a suitable website.

Bye,
Croc


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Ralf Lemster  Identity Verified
Germany
Local time: 10:09
English to German
+ ...
Exchange rates shown on the web are indicative Nov 5, 2005

Hi again, Croc,

I didn't put my posting in "Money matters" as I thought that this related to money matters in connection with translation business.

...which, strictly speaking, is true, but I don't see a problem.

I suppose it might be an idea to open a euro account in the UK, but the interest rates don't seem to be very high and I'm not sure whether this would compensate the losses incurred by the exchange rate on GBP accounts.

Depends on the expected frequency of transfers, of course.

I don't know whether the Yahoo currency converter uses any "official" exchange rate, but on the day in question in October both ask/bid were quoted at something like 1.465 with only a small difference between both figures. Maybe the fact that the the difference was so small is what irritated me and made me think I was getting a bad deal. Are there any "better" Internet currency converters, or are they basically similar?

I'd say they're pretty similar - the problem is that tight bid/offer spreads do not reflect the reality of exchanging small amounts (the notion of 'small' is relative, of course, but in international foreign exchange, the amount you mentioned is small). Ask your bank which reference rate they're using, and which spread (the difference between buying and selling rates) they apply. As I said, six cents sounds about reasonable.

Perhaps you could let me know what the regulations for cross-border euro payments stipulate, for example for larger amounts up to 50,000 GBP, or maybe you could point my attention to a suitable website.

Search for standard euro cross border in the forum: you'll find numerous threads on this.

This was discussed in a number of threads, e.g.:
www.proz.com/topic/12183
www.proz.com/topic/12208
www.proz.com/topic/11806

The relevant EU Regulation 2560/2001/EC currently applies to payments not exceeding EUR 12,500; this threshold will rise to EUR 50,000 on 01JAN2006 (Article 3).

HTH - best regards,
Ralf


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Money transfer from UK offshore building society account to German bank account - ripoff by bank?

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