If you need to exchange a large amount of currency, you want to choose a way that is safe, convenient and cost-effective.

In this helpful guide, I will explain the obvious (and hidden) costs, what options you have, how the process works, and the way to get a better rate.

What are your options?

If you need to exchange a large sum of currency, you have two options:

  1. Use a bank
  2. Use a currency broker

The advantage of using your bank is that it's more familiar, and the money is already sat in your account.

The disadvantage is the banks know that too.

It probably won’t come as a complete surprise to hear that in terms of cost, the banks are generally not the best way to exchange large amounts of currency.

I suspect the banks can’t compete too aggressively because they are lumbered with very high costs.

The UK’s largest banks, such as Lloyds, Barclays, HSBC and Natwest, have annual costs that run into the billions. Who do you think pays for that?

All the big banks know that there will be a certain amount of walk-in traffic no matter what they charge.

So, there doesn’t seem to be a great incentive for them to drive down their fees and charges.

In contrast, a currency broker specialises in currency exchange.

They wouldn’t get any customers if they charged excessive rates and fees.

With far lower operating overheads, a currency broker can undercut the banks and pass on the savings to customers in the form of better exchange rates and low (or no) fees.

As a general rule, banks can charge up to 3%-4% more than a good currency broker.

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What are the costs?

There are two costs you need to be aware of: transfer fees and exchange rates.

The transfer fees are more visible.

Every time to make an international money transfer, a lot of banks charge you a flat fee.

The fee varies from bank to bank but is in the region of £10 to £25 per transfer.

On a large currency transfer, that may not sound like a lot. But if you send money regularly, the fees can begin to add up.

I'm not a fan of transfer fees. They annoy customers for a start. 

And it complicates the cost of the transfer, which is probably deliberate.

For large currency transfers, the more important cost is the exchange rate.

Think of an exchange rate as effectively the price of money.

Each bank or currency broker will quote you their own exchange rates.

It can make it difficult for customers to compare costs.

If you are going to run a cost comparison, it needs to be roughly at the same time (within the same hour) as exchange rates change throughout the day.

Don't worry - there’s no need to build a spreadsheet or use a complex formula.

The simplest way to make a comparison is just to focus on the amount of money you receive net of any fees.

The bigger the number, the better off you are.

I happen to have an account with both Barclays and HSBC, so I can easily monitor their exchange rates.

I’m not having a go at these banks, but my view is that there are better rates available elsewhere.

Shop around and see for yourself.

Even small improvements in the exchange rate can have a significant impact on the money you will receive.

On a large currency transfer of say £100,000, even a tiny 0.5% difference in the rate could cost you an extra £500.

Exchange rates often move more than that within a day. 

Bad timing or a poor exchange rate could cost you a lot more.

Using the example above, an unfavourable swing in the exchange rate of just 2% could translate to a shortfall of £2,000 in the money you receive.  

Why you should be wary of exchange rates online

These days most people go online to look up exchange rates.

Many websites are offering free 'live rates' – such as XE, Oanda or DailyFX.

However, when it comes to changing large amounts of currency, people can be in for a shock.

That’s because a lot of the exchange rates you see online are not available to the public.

They are what’s called ‘interbank’ exchange rates.

As the name suggests, interbank foreign exchange rates are used by banks to trade currencies with other banks.

They are not rates that individuals can access.

Even large companies and currency brokers don’t buy and sell currencies at interbank rates.

I don’t blame anyone for thinking the interbank rates are accessible. It’s not made clear at all - quite the opposite.

But if you take a closer look at these ‘free’ exchange rate sites you will find a disclaimer somewhere saying words like “for information purposes only” or “Consumer clients or small to medium-sized businesses cannot access these rates.”

Knowing exactly what your money is worth allows you to budget effectively and takes away the uncertainty.

To get a genuine rate, the best thing to do is request a quote from your bank or a currency provider.

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Is it safe exchanging large amounts of currency?

Safety and security is critical for anyone looking to exchange a large sum of currency.

I’ve been a customer myself.

Before I sent any money, I wanted to understand what security measures were in place.

Let me first explain something that most people aren’t aware of.

Behind the scenes, both banks and currency brokers use the same SWIFT international payment system.

SWIFT is the standard, secure system used by everyone.

It's been around for decades and connects almost all banks around the world.

When you transfer money abroad, it will travel via the SWIFT system – whether you use a bank or currency broker.

Another important thing to know is that any company that is Authorised and Regulated by the Financial Conduct Authority is required to segregate client funds.

What does that mean in plain English?

It means your money is held in a separate, safeguarded account used solely for client transfers and not mixed with company funds.

Before you use a bank or currency broker, make sure they are Authorised by the Financial Conduct Authority (FCA) – the UK’s financial regulator.

To find out if a currency broker is Authorised, you can search for a company on the FCA register.

Is there a limit on large currency exchange?

In most countries, there are no legal limits on currency exchange.

The UK, US, Canada, Australia, NZ and the countries in the EU have no restrictions on the maximum size of a bank-to-bank money transfer.

There are, however, some countries such as India, China, Russia and Argentina that do restrict the movement of money (it is always easier to get the money in, than out).

In the UK, although there are no legal barriers, the big UK banks often set their own internal daily limits for online transfers.

Here are the daily limits of the Big Four:

  • Natwest: £25,000
  • HSBC: £50,000
  • Barclays: £50,000
  • Lloyds: £30,000

The daily limits imposed by banks can be a problem for large currency exchange.

If your transfer is over the limits, it may end up costing you more time and hassle, as well as transfer fees, if you then have to make several transfers.

An easy workaround is to use a currency broker (also called a money transfer company) instead.

Currency brokers don’t usually have any daily limits, so you might find them to be the best way to exchange large amounts of currency.

How to exchange large amounts of currency (in 4 simple steps)

Step 1 – Customer ID check

Before you can exchange currency, you need to be identified.

There is a legal obligation to verify new customers to comply with financial regulations.

It usually takes about 5 minutes, and there is no obligation to trade.

Step 2 – Secure an exchange rate

Once identified, your bank or currency broker will ask the currency you need and the amount of currency you have and quote you their current exchange rate.

No transaction will occur without your permission.

If you are happy to proceed, the bank or broker will lock-in your exchange rate.

You will then be emailed a confirmation with all the details of your transaction.

Step 3 – Pay for your transfer

Banks will require your money upfront, but currency brokers will allow you to lock-in a rate before you send your money in.

The confirmation email will have the bank details of where to send your money.

Step 4 – Your money gets converted

When your money is received by your bank or currency broker, they will convert it into the currency needed and send your funds to the bank account requested.

Steps to transfer money from Spain to the UK

Getting the best exchange rate for large currency transfers

As you may have seen, exchange rates move up and down in value every minute of the working week.

That’s why on the typical currency chart you can see the big peaks and troughs, but you can also see plenty of little movements as well.

On large currency transfers, even little movements in the exchange rate matter.

As an example, a 0.5% move in the rate on a £75,000 currency transfer is a difference of £400.

A swing of that size can happen every day.

Given the natural volatility of foreign exchange markets, it’s not easy for customers to know the right time to exchange their money.

You might find it useful to speak to a currency dealer who is continually watching rates and is familiar with the news, events and price patterns that trigger the fluctuations.

A currency broker can help you achieve a more favourable exchange rate.

No one has a crystal ball of course, but say the Pound has a strong run or hits a specific rate, this could be useful information for a client.

Not all currency brokers offer this level of pro-active service.

In fact, a lot of brokers these days are really just online platforms or ‘apps’.

You pretty much have to do everything yourself.

It suits some people, but not others.

For large currency exchange, customers often want the peace of mind of having someone they speak to.

Having a real person you can speak to brings several advantages:

  1. The details of your transfer can be checked to make sure everything is in order.
  2. You can discuss current rates and levels to aim for.
  3. When you transfer your money, you are kept informed at all stages.

Personally, I think all three elements make the process a lot better for customers.

Quick Summary

  • You can use a bank or currency broker to exchange large amounts of currency.
  • The cost is a combination of exchange rates and transfer fees.
  • Currency brokers can normally beat the banks in terms of cost, but rates and fees vary depending on the amount.
  • If a currency broker is Authorised by the FCA, it is required to use safeguarded client accounts.
  • Some currency brokers (money transfer companies) are just online-only platforms, whereas others will offer you guidance on exchange rates and personal assistance.

Who are we?

Key Currency is a leading UK-based currency broker. 

We give you access to commercial exchange rates and charge no fees.

And unlike banks and online-only operators, we don't push you onto a trading platform and make you do everything yourself.

Our customers are allocated an account manager who will take care of the entire process for you as well as guide you on current exchange rates.

Moving a large amount of money can be stressful. I’ve been there myself. Of course, you want to get a good rate and not be hit with any hidden charges, but you also want to know your money is secure.  

We’re committed to providing a service of the highest integrity and safety.

As an Authorised Payment Institution, regulated by the Financial Conduct Authority (Register No. 753989), you have the peace of mind knowing that all money transfers are conducted through fully safeguarded accounts.

As a company, we are open and transparent.

The names, faces and backgrounds of all our people on our website for all to see. We don’t hide behind an app or glorified mission statement.

Key Currency has a 5-Star "Excellent" rating on the customer review website Trustpilot. We have received reviews from hundreds of happy customers.

Why not compare us to your bank or existing provider by requesting a quote below.