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Transferring Money to Australia
Learning Centre
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Currency Specialists (our partners)Buying Australian Dollars?With OzForex you will get a better deal. Our highly efficient dealing platform and small margins allow us to offer you excellent exchange rates so your money goes further.OzForex offers:
    www.ozforex.com.au or phone local call 0845 686 1950 (in UK) 1300 300 424 (in Aus)
----- Important - Please Read Intro to Currency ExchangeMost migrants will need to convert their money into Australian dollars and transfer the funds into their Australian bank account at some stage during the migration process.The timing of this transaction will vary between individuals; some may transfer funds before leaving home, while others may wait until they have arrived in Australia. Some may decide not to sell up their assets until they have committed to staying in Australia, maybe a year or so later. This presents a risk to the migrant, because exchange rates can fluctuate quite significantly and the rate may not be as high as you'd like at the time your funds are ready to transfer. In this section we discuss how the £/$ rate has moved in the past and some of the options available when converting currency. No Advice IntendedNone of this discussion should be treated as advice regarding what is a "good" rate or which strategy is best for you to follow - always seek professional advice.-----
Foreign Exchange (FX) - The BasicsThis feature article provided by Moneycorp (www.moneycorp.com.au) June 2009Setting up home in Australia is a bold and exciting move. It is probably one of the biggest decisions you will ever make – and you will want to set out with as much money as possible. However, exchange rates can fluctuate by as much as 10% in a matter of weeks – so your escape fund could shrink significantly while you’re busy planning your move. That’s where thinking about foreign exchange in advance can help. The following chart outlines the last year of GBP/AUD trading, highlighting the difference timing can make in your foreign exchange transaction.
To put the above into perspective, if you had wanted to transfer £100,000 into dollars on 14th October, at a rate of A$2.50 you would have received A$250,000. Trading six months later, on 10th June at A$2.02 would get you just A$202,000 – $48,000 LESS. These types of fluctuations frequently occur, and can sometimes work in your favour, however steps can be taken to minimise the risk of negative fluctuations. To ensure that you do make the most out of your money when moving, it is key that you understand all of the options available and that you get expert guidance on the currency markets. Moneycorp offer expert guidance on the currency markets at no cost, and will talk to you in jargon-free language, ensuring you understand the details of the currency markets, and what it means for your transaction. To help you get to grips with the basics, see below for a brief outline of the tools/products that Moneycorp offer. Spot ContractsBuy or sell a currency for immediate delivery. Spot contracts are suitable if you want to receive your currency quickly and efficiently.Forward contractsBook to buy/sell your currency in the future, at a rate you fix today. Forward contracts can help protect against adverse currency movements and can be used to lock into favourable exchange rates.Stop loss ordersSet an automated order and agree a minimum limit at which you will buy/sell your currency. This effectively guarantees the minimum rate that you will receive. Stop loss orders are suitable if you have funds to transfer but no real time constraints and are looking to make the most of any favourable currency movements. Stop loss orders will also protect you from adverse currency movements.Limit ordersSet an automated order and agree a target exchange rate at which, if the rate is achieved, you will buy/sell your currency. Limit orders are suitable if you have funds to transfer but no real time constraints and are looking to make the most of any favourable currency movements. Stop loss and limit orders can be run together to make the most of positive currency movements, while offering protection from negative fluctuations.With six offices worldwide, including an office located in Sydney, Moneycorp are always available to talk to you about any foreign exchange questions you may have. Information supplied by Moneycorp, 201 Sussex Street, Sydney, NSW, Australia ----- Forward Contracts etc.If you've never made a large foreign currency transaction, you may be confused by some of the terms used and their significance to you. This section aims to give you an introduction to some of these terms. Spot contractA spot contract is also known as a "buy now, pay now" option and is where you fix the rate today and pay for the currency straight away. It is a very simple and fast way of buying your currency, and means you are protected from any adverse movements in the market.Forward ContractAlso know as a Also know as a "buy now, pay later" option, the forward contract allows you to fix a rate of exchange today for delivery in the future, but only pay a 10% deposit. The forward date can then be set for anything up to 2 years in the future, thus giving you complete peace of mind knowing how many dollars you will receive.For example, you could fix into today’s rate for £100,000, but should most of the equity be tied up (e.g. In your house) then you can secure this rate with just a £10,000 deposit, and pay the remaining £90,000 when the house sale completes. Market Order or Target RateIf you think the exchange rate will rise, then you can set a level at which you want to buy your dollars. If and when this level is hit, the currency is bought on your behalf and the currency dealer will contact you. It is worth noting that is does carry an element of risk because if the target rate is not reached, the currency is simply not bought for you and you leave yourself at risk to the market moving against you.Bid/Ask Rates and SpreadJust like any traded commodity, there is a bid and an ask rate for a currency. The bid rate is the rate quoted when you want to buy the currency, the ask rate is for selling.The spread is the difference between the bid and ask rates. Generally, the spread is smallest for inter-bank and large value transactions and greatest for tourist (eg. holiday cash) transactions. Inter-bank RateThe rates you normally see quoted in the newspaper or on currency websites are the inter-bank bid/ask rates, which are the rates used by banks and other financial institutions when buying/selling very large amounts of currency.When trading smaller amounts, you can expect to receive a rate below the inter-bank rate. The larger the amount, the closer to the inter-bank rate you may expect to achieve. ----- Bank or Broker?Obviously your aim is to get the maximum amount of Australian dollars you can. The biggest factor in that transaction is the prevailing exchange rate and you have no control over that.A second factor is whether you can arrange a forward contract, if this is your strategy, with a particular company or bank. A third factor is how close to the inter-bank rate you can achieve. Each organisation dealing in foreign exchange will determine their own spreads. The difference between, say 2.15 and 2.18 doesn't mean much when you're changing £500 to go on holiday, but if your changing £100,000, it's serious money. Another factor is how much it costs to send the funds to your Australian bank account. This will vary between organisations. What are the Options?Your main options are to use your bank in your home country, the Australian bank you open your account with or a company that specialises in foreign exchange.You can obtain quotes from more than one organisation, for the amount you intend to transfer, then compare the rates, level of service and other costs. Obviously you need to get quotes at pretty much the same time, so they're based on the same inter-bank rate. ----- DisclaimerInformation on this website is intended to give the reader an overview of many aspects of life in Australia, such as healthcare, real estate, tax, superannuation etc. While we at Aussiemove have performed a large amount of research on each subject area, we do not claim to be experts in those fields and we recommend that migrants discuss their requirements with companies specialising in those fields before making purchases, investments or other decisions concerning their move. The content of this website is general in nature - no specific advice is intended. Specifically, no advice about future movements in exchange rates should be construed from any content in this website. We are sponsored by a number of companies that provide services to migrants. However, we make no specific claims or guarantees regarding their performance and we accept no liability regarding their products or services. All individuals should do their own research. ----- |
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