How the Currency Exchange Process Works

You may be used to fronting up to your bank or to a currency exchange booth at the airport when you need to change some money for a holiday, paying your money in at the counter and wandering out with a brightly coloured, unfamiliar pile of Pesos, Dollars, Yen or Euros.

It seems like a simple process, but when you imagine doing this with the much larger sums of money that you will probably be exchanging when you emigrate to New Zealand, it gets a bit more complicated - and a lot more expensive.

Your bank can of course arrange to wire your money from your account in the UK to a bank account in New Zealand, changing it into New Zealand Dollars in the process - but they will use their own exchange rate, which won't be as good as the rate you would get from a specialist foreign exchagne broker. And of course, the whole process takes days, so you don't get the opportunity to pick exactly the rate you want. Both the sending and sometimes even the receiving bank add their charges, meaning that you end up with fewer Dollars than you should. UK banks are often also restricted by their own or government red tape, and put annoying restrictions on how much you can exchange in one transaction.

Using a specialist foreign exchange broker is a more efficient and economical way of changing your Pounds into New Zealand Dollars. Once you've opened an account with a broker the steps you need to take to transfer your money are:

Step 1: Contact your broker

When you're ready to change some money you need to contact your broker to organise the transaction. You can do this online with Currency Online or over the phone with HiFX. The broker will agree a rate with you and specify a Value Date, which is the date by which you'll need to get your money to them to complete the transaction.

Your broker will also confirm where you want your money sent once the transaction has been completed and your money has been converted into New Zealand Dollars - this is sometimes referred to as the Beneficiary Account.

Step 2: Confirm the transaction

You'll be sent a Contract Note to confirm the transaction within an hour or two - it is important to check this over carefully.

Step 3: Complete the transaction

Transfer the Pounds you need to complete the transaction to the account (sometimes referred to as the Nominated Account) specified by your broker. In most cases this will be detailed on the Contract Note.

Your New Zealand Dollars will be transferred in to your Beneficiary Account, and your currency exchange transaction will be complete.

Interested in finding out more about fluctuations in the Pound to New Zealand Dollar exchange rate? Check out the next article on Exchange Rate Volatility.

At Broadbase International we specialise in helping British migrants make a confident start to their new lives. Please contact us if you have any questions about the financial side of life in New Zealand, and don't forget to order your free copy of our comprehensive New Zealand Guide.