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Where To Find The Best Foreign Exchange Rates

One of the main attractions of cryptocurrency was always the potential for a decentralized currency that would eliminate the need for foreign exchange. The rationale makes sense: we live in an increasingly globalized world. Why should our money be any different? After all, we regularly buy digital items online in different currencies anyway.

Furthermore, millions of people now earn their living working remotely. It would be only natural for them to earn in one widely-accepted currency. For better or worse, that has not come about. Cryptocurrency may dominate the news cycle on economic forums but is still a highly impractical means of paying or receiving money. It is far from being accepted worldwide. If you're waiting for that one global currency, you're going to have to wait a lot longer.

This all means that in 2021 we are still stuck dealing in foreign exchange. Finding the best exchange rates is a matter of interest for people who are travelling, sending and receiving money abroad, and those who use the Forex market for trading.

However, there is still no clear answer on where to find the best exchange rates. Fortunately, we have enough information and resources to get as close as possible.

Here is a quick guide on how to find the best foreign exchange rates.

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Foreign exchange when travelling

While the world hasn’t quite opened up just yet, travel is slowly becoming a reality again. If you have a trip planned abroad, you might want to start figuring out how you are going to exchange your money when the time comes.

The topic of Forex when travelling doesn’t come up as often as it used to. In the past, you would have to make a plan in advance. Today, you can simply tell your bank that you are going abroad and use your debit and credit cards. Is it even necessary to change money beforehand?

That depends on how much the currency pairing fluctuates and how strictly you want to stick to a budget. If you are going to a country where the currency is constantly swinging in relation to your own, simply using your card when the time comes could leave you paying more than you expected for certain amenities.

If you do choose to change money in advance, don’t do so through a kiosk at the airport. Rather, go to your bank or travel agent and do it through them. While banks are not perfect when it comes to foreign exchange, and we will go into the reasons why, they are better regulated than Forex outlets and they will generally give you better rates.

That said, you are likely better off using your debit or credit card. At some stores – especially in international airports – cashiers will give you the option to pay in the local currency or to pay the equivalent sum in your own currency. Remember to always make the purchase in the local currency, as you will get a better exchange rate this way.

Foreign exchange for international transfers

The topic of Forex is much more relevant for those who are regularly doing international money transfers. This has long been the case for many businesses, and is common for millions of individuals now as well. The gig economy makes it possible for freelancers to make money in foreign currency and receive it locally every month.

When you are earning in foreign currency, getting the best rates for international transfers becomes crucial. If you don’t do your research, you could end up losing a significant amount of money with each transfer. Even if you don’t notice it at the time, the amount builds up over the months and years.

Going with your bank might seem like the most convenient option – and you probably trust them more than you would any other financial institution – but when it comes to Forex, they are taking advantage of clients. Banks are notorious for charging high fees on foreign exchange transactions. But the issues with banks don’t stop there.

If you've done international money transfers through your bank, you will have noticed that they gave you a different exchange rate than the one you found on Google. This is because they hide extra fees in the exchange rate, keeping the difference on every transaction.

The good news is that there are plenty of alternatives in 2021, especially considering the fact that so many people have had to deal with this same issue.

The best exchange rates for receiving money

To get the best exchange rates for international money transfers, you will need to look at online money transfer companies. Companies like Wise (formerly TransferWise) and WorldFirst offer transfers with low fees and commissions, while providing you with a better exchange rate than you would get at any bank.

They also have added features which ensure you get the best exchange rate on regular transfers. You can use tools such as hedging and futures contracts to make future transfers at today’s exchange rate, regardless of what happens to the currency pairing in between.

WorldFirst has an excellent multi-currency account which you can use if you are receiving money in a number of different currencies. A multi-currency account allows you to keep the sum in its original currency until you are ready to make the transfer. However, WorldFirst’s multi-currency account is at present limited to businesses and online sellers.

The future of foreign exchange rates

Over the past ten years or so, the international money transfer industry has soared. It has gone from being a hub of small startups and old archaic institutions to one of innovation and disruption. With more competition, these companies are being forced to constantly improve, offering the best exchange rates possible to clients.

International money transfer companies go some way to solving the problem of foreign exchange rates. But they do treat the symptoms rather than the root cause. Unlike concepts like cryptocurrencies and international currencies, they are unlikely to change the Forex game any time soon.

But neither are cryptocurrencies likely to change Forex for good in the near future. We’ve seen their potential, but it will be years before they truly impact the concept of foreign exchange itself, if they ever do. For now, we are stuck with fluctuating exchange rates, and have to choose the options that will get us the best margins possible.

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