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Sunday 23 October 2016

The 60-second guide to... shopping around for currency online

Published 03/07/2016 | 02:30

Shop around for online deals when changing currency
Shop around for online deals when changing currency

If you're heading off on holidays to a non-EU country or even just to Britain or Northern Ireland (Brexit or no Brexit), shopping around for foreign currency online can be cheaper and handier than going down to the FX desk at your local bank, An Post or a specialist FX service at the airport.

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Before you shop around, its a good idea to get a feel for whatever the 'spot' rate is because there can be a big difference between this rate and what you are offered by FX services.

As of last Tuesday, to buy £500 sterling online would have cost you €616.60 from No1 Currency (owned by Fexco), although that doesn't include postage, which is another €6 unless you opt to collect it from a branch. (You'll get free postage on purchases over €750.)

This is cheaper than An Post, which would have charged €620.42, while AIB bank would have asked for €624.63.

The AIB rate, unlike An Post, includes a 1pc commission on the euro value of the transaction).

There are other services that offer commission-free rates, but these may be offset by a FX rate that is less competitive.

But you could get an even better rate by opening an account with the Irish peer-to-peer currency exchange service, Currency Fair.

CurrencyFair's marketplace allows people to choose either to exchange immediately using the best rate currently available, or offer up your funds at a rate of their choosing and wait for another customer to match them.

At the best available rate last Tuesday, £500 sterling would cost you €615.50, which includes the flat transfer fee of €3 and a margin of between 0.4 and 0.5pc.

But if you wait for another customer to match you, you could pay a lot less and the margin would be just 0.15pc.

The only thing is you'll need a bank account in the destination country or access to one, so it might not be practical for one-off or very occasional currency exchanges.

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