Note
Currency broker vs bank for a Spain property purchase
Quick answer
We name no bank or firm and take no commission. Banks are convenient and may cost more on the exchange rate. Specialist firms may charge less but need to be checked for authorisation. Compare the euros that arrive and the terms in writing.
Applies toBuyers deciding whether to use their bank or a currency firm.
On this page: 10 sections
§ 1What each offers
A bank offers convenience: you already have the account, the transfer is part of a service you know, and the bank may be able to speak to the receiving bank. A currency firm offers a specialised service, often with a dedicated contact, lower margins and tools such as forward contracts. The price and the safety differ from provider to provider. This page belongs to the chapter in the basics of transferring money.
§ 2Cost
Banks often include a larger margin in the exchange rate, and may add fees for international transfers. Firms often quote a smaller margin, sometimes with no fee. Neither is always cheaper, and promotions change. The only reliable method is to ask for quotes for the same amount on the same day, and compare the euros arriving. The rules on currency exchange explains the costs.
§ 3Regulation
Banks are supervised as credit institutions. Currency firms are authorised as payment or e-money institutions, or in other ways depending on the country. Ask a firm for its authorisation details and the name of its supervisor, and check them on the register. Ask how it protects client money while the transfer is in progress.
§ 4Service
Consider the service you need. Do you want a person to speak to, in your language? Will you make several payments? Do you need a forward contract? The rules on forward contracts explains what that involves. Will the provider help if the receiving bank asks questions?
§ 5Risks
The main risks are using an unauthorised firm, falling for a fraudster who impersonates a provider, and paying more than you realised. Confirm the account details by phone, use only firms you have verified, and keep all quotes.
§ 6Our position
We take no commission, and name none. The criteria above are the same for any provider.
§ 7A routine
Collect two or three quotes, ask for the authorisation, read the terms, send a small test and then the large transfer. Keep the records. The rules on pounds to euros and the rules on dollars to euros apply this to the two largest currencies.
§ 8Trying both
You can use both: your bank for small and routine payments, a firm for the large conversion. Open the firm’s account early, because identity checks take time, and test with a small sum. Keep one folder for the paper trail from each.
§ 9Warning signs
Be wary of cold calls, pressure to act today, promises of rates that beat the market, requests to send money to a personal account and firms you cannot find on a register. Walk away from any of these.
§ 10What your lawyer can do
Your lawyer can tell you which payments are needed and when, check the account details of the notary and the registry, and warn the receiving bank. A lawyer does not usually choose the currency provider, which is your decision.
FAQRelated questions
Which is cheaper, a bank or a firm?
It depends on the provider, the amount and the day, so we name no winner. Ask each for a quote in writing for the same amount, and compare the euros arriving after all fees.
Are currency firms safe?
Firms must be authorised where they operate. Ask for the details and check them with the supervisor. Ask how client money is protected. If you cannot confirm, do not use the firm.
Do you earn from these links?
No. This handbook takes no referral fees from banks, lenders, brokers or currency firms. If that ever changes, the pages affected will say so, and the policy pages will explain it.
Financial note. No rate is printed unless it comes from a dated, official publication. Capital is at risk, exchange rates move, and no lender, broker or provider is recommended here. Mortgage terms are set by each lender; ask a registered intermediary about yours.