Lloyds Bank Pipped on my Pound / Dollar Payment

I paid a US data supplier at the start of January and the rate I received taught me the benefit of shopping around for the best exchange rates.

As editor of Pound Sterling Live you would think by now I would be quite savvy on sourcing the best possible exchange rates in the market for international payments.

I am not though; when paying international suppliers I still stick with my bank, Lloyds, to pay suppliers in both the United States and India.

I stick with them out of habit and quite frankly, despite the bad press banks tend to get, I quite like my bank.

That said, at the start of January I made a monthly payment to my US supplier and came to realise I need to be a little more proactive when transferring money:

1) Fees. A 15 pounds fee is levied by Lloyds + any agent fees charged by the recipient’s bank in the US. This second fee only shows up on your bank statement a couple of days later and is a bit of an unknown.
2) Exchange Rates. This is arguably the biggest area of contention.

The rate I paid on my GBP to USD conversion was 1.4237, the live market rate was actually at 1.4586.

This is a wide spread and I contacted George Cole at the RationalFX dealing desk to sound out their quote for a transfer. I am often in touch with George as he can often offer me an insight into what is going on in the retail currency market.

The rate quoted was 1.4466 with no transfer fee being levied.

The saving gradient using the rates provided is notable:

• A 50K GBP transfer: Lloyds = $71185, RationalFX = $72330. Saving = $1145.
• A 100K GBO transfer: Lloyds = $142370, RationalFX = 144660. Saving = $2290.

The experience serves to illustrate that exchange rates are actually a fluid and discretionary product where spreads are widened and closed on a number of considerations; the most important being profit.

The transfer process is also relatively simple with RationalFX - you transfer money into a UK client account held by RationalFX at Barclays (this is ring fenced from their actual corporate account and working capital as per FCA rules).

They then conduct the transfer to the account you instruct them to with the payment being made on the same day.

My suggestion is simple, just get a quote from an independent provider’s dealing desk and from there make the decision as to whether or not it is worth your time to get proactive on transferring money.

To enquire about better rates, please find out more here.