HSBC the worst bank for international FX transfers

HSBC – ‘the world’s local bank’ – offers the worst exchange rate in the UK for international transfers of £1,000, mainly used for personal transfers for property and living costs abroad, as well as small business payments, research from money transfer specialist Currencies Direct has revealed.

It found that Brits lost £1bn in international money transfers last year – simply by using their bank to make international payments. Given the forecasted increase in international money transfers from the UK this year, the amount they are expected to lose is set to rise to nearly £1.2bn in 2016.¹

The research revealed that, despite 8 in 10 people using their bank to send money abroad, less than 4 in 10 bank customers are actually satisfied with their exchange rate. Of the people unsatisfied, more than half either rarely or never compare exchange rates.

HSBC came out worst among the UK’s eight major banking institutions, with a fee of £30 and an FX rate of 1.229, resulting in a full transfer cost of 6.73%. Halifax was the second worst, with a fee of £9.50 and an FX rate of 1.232, resulting in a transfer cost of 4.25%. The best was RBS followed by Nationwide, with transfer costs of 3.78% and 4.04% respectively.²

Although the average saving between a bank and a currency specialist is approximately 3%, Currencies Direct points out that the amount varies and can be as high as 5% on transfers of £1,000.

Gary Pitt, Head of Marketing at Currencies Direct, commented:

“It’s crazy that people know they’re getting a bad deal, but don’t do anything about it. Especially when alternative services are out there, and are so easy to access.

“A simple Google search or asking around will quickly uncover alternative money transfer options to the bank, which can have a huge impact on the amount of money that arrives in your destination account.

“Our generation is becoming less and less reliant on the High Street banks, as companies offering alternative options grow in popularity. We’re able to listen to our customers and make changes to our service much more quickly, meaning they get a better experience and more money in their back pocket.”

The new International Money Transfer Index™ (IMTI™), launched last November by FXCompared.com, provided part of the research. Daniel Webber, Co-Founder, commented: “When people send a substantial amount overseas, say for an overseas property purchase of €100,000, choosing an alternative to the bank means you’ll save, on average, more than £2,000.

“That’s enough to make a significant difference to your start overseas – you could get a new kitchen, or maybe a hot tub and a bottle of bubbly to toast your new holiday home.”