Currency exchange on Forex VS the other exchanges

The term «currency conversion» has long ago left a narrow audience of economists and currency speculators. The number of exchange points indicates a high level of interest of the population in this type of services. Free exchange of currency is used by millions of Russians, pursuing a wide variety of purposes — preserving capital from the devaluation of the national currency, paying out foreign currency loans, traveling abroad, etc.

Currency exchange in banks

Traditionally, banking institutions enjoy the greatest confidence in the performance of any financial transactions. The force of habit does not always help to get better financial results, which is well illustrated in such massive transactions with money as currency exchange.

Banks use their image of reliability, charging commissions from customers, for virtually any type of operation. There is nothing illegal in the fact that while exchanging currencies, the bank’s exchange rate differs from the officially established rate of the Central Bank of Russia, naturally, not in favor of the client. The exchange rate difference may be 2-3%, which can significantly affect the profitability of the transaction, especially if the amount is significant. Another inconvenience in the relationship with the bank is the need to provide a passport (when exchanging more than 15.000 rubles), and in some cases, at the discretion of the bank, and the data on the origin of funds (requirements entered into force in 2017).

The development of the financial services market, especially thanks to Internet services, provided a variety of alternative opportunities, when conducting foreign exchange transactions.

Exchange of currencies through the system of Internet banking

Remote exchange of currency can be carried out through Internet banks. In most cases, the exchange rates in the Internet bank coincide with the rate in the branches of the bank itself. Customers who use the Internet banking service are interested in instant execution of their order and a low margin. To use this method of conversion, you need to become a customer of a bank with the Internet banking service, open at least two accounts — ruble and currency (dollar or euro, as a rule) and acquire a plastic card of this bank. The main restrictions are related to the list of currencies that can be converted — traditionally it is only USD and EUR. Swiss franc, British pound sterling, yen, etc., refer to unpopular currencies, and it is difficult to find such offers in Internet banks.

Currency exchange on the Internet exchangers

The exchange market for electronic money is growing along with increasing requests for various financial transactions via the Internet. Electronic payment systems can not always provide access to the right services, which forces users to contact Internet exchangers. These structures, in fact, are financial intermediaries, so commission fees are not only necessarily present, but can unpleasantly surprise by their size. Another problem faced by customers, the lack of a necessary currency reserve, and, this is what exchangers with low commissions suffer from.

Among the huge number of Internet exchangers (over a thousand registered), it is difficult to choose those that meet all the requirements and guarantee the safety of funds. Specialists who monitor this market note that trust is caused by no more than 40 companies.

Forex currency exchange online

Forex brokers offer to exchange currencies on terms that are much more convenient and attractive than banking operations. To conduct the conversion, you need to go through a simple registration procedure on the site of the selected broker, open an account and access your personal account.

The purchased currency can be quickly transferred to your bank account. In order to monitor the exchange rate fluctuations in real time and to independently perform the operations of purchase / sale, you can install a special program (the most popular is QUIK). Opening an account and installing the software does not require any money costs. If necessary, instructions for buying/selling currency can be given to the broker by phone.

The bought currency does not have to be immediately withdrawn from its brokerage account and used later if the exchange rate changes favorably.

  • the interbank exchange rate for Forex is much more profitable than the rate that the bank pawns. For example, a European licensed broker Hamilton (official website with a Russian version) can exchange a variety of currencies with minimal commissions;
  • the exchange takes place in a few minutes on-line;
  • there is no need to leave the house, which will protect the safety of funds. Changing large amounts of cash in exchange offices, there is an additional risk of becoming a victim of criminals. This risk increases many times, if you exchange with street currency speculators, where it is possible with a high degree of probability to get a «tip» and fake bills;
  • in the «assortment» a large number of currencies, including the «Exotic» ones;
  • currency exchange on Forex is open 24/7.  Operations can be conducted always and from any point where there is an access to the Internet;
  • there are no restrictions on the amount of exchange;
  • there are no hidden commissions that can be present at the exchange offices;
  • the exchange of currencies on the Forex market is impersonal, which provides additional guarantees for the security of funds and ensures the confidentiality of transactions;
  • on Forex you can not only change the currency, but also use the market situation for the performance of operations of buying/selling, in order to profit on the difference in the changing exchange rates.

Currency exchange has become another new service in the Forex market. The terms on which it is proposed to conduct exchange transactions meet most of the clients’ requests and create real competition to banking institutions.

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  • Tuesday, December 15, 2015
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