Preparing to exchange money
Your bank will generally not give you the best rate of exchange even for large sums, so choose a specialist currency provider that may be able to save you significant sums, sometimes thousands. Register with three or four currency providers so that you have a choice of rates when you are ready to do the deal.

Some companies publish their live dealing rates on their websites, but many companies will not give you a dealing price unless you register. If they don't want to quote you a dealing rate before you register, ask them how many 'basis points' they quote away from the 'inter bank rate' for the amount you want to convert, because this should be a standard price calculation. The 'inter bank' rate is the rate that the banks deal at between themselves. The lower the number of 'basis points' away from this rate, the better the price you are getting. One hundred basis points equals one cent on the Sterling / Euro rate, so if the inter bank rate is 1.4750, 100 basis points less would be 1.4650. You can check the inter bank rate on various websites. If the company in question won't even tell you this, or they say that this information isn't available, my advice is to be suspicious and not to register with them.

The key stages of currency exchange
First you need to register with a provider and complete anti-money laundering checks. Beware of providers who are willing to accept faxed or uncertified copies of identity documents as they may be breaking the law. Also, check there will be no additional charges, and ask how long it will take to pay your currency out. The longest you should wait is one day after you have paid your money to them, so if they say several days, I would again be suspicious. They can make a lot of interest hanging onto your cash.

Next, you need to decide what type of currency deal is best for you. The two most popular types are 'spot trades' and 'forward trades'. Spot trades mean that you simply buy the currency at the current price, and pay for it immediately. Forward trades mean you fix a rate in advance but don't pay the full amount until later. They can be good to lock-in a favourable rate, but they usually require a 10 per cent deposit on which you might not get any interest, and the rate will have an 'insurance premium' built into it so won't be as good as the spot rate.

When you are ready to trade, check the rate with all the providers you have registered with. It is important to do this at precisely the same time, as rates can move quite quickly. In most cases, you will need to phone to get the rates so you might want to get a couple of friends to help you and make sure they are all done at the same time. Then do the deal with the provider who is giving the best rate. Make sure you know exactly what rate you are getting, and that there are no additional charges to send your money overseas. Go to your bank and arrange a CHAPS transfer. This is an electronic transfer of your money. The banks charge for this service, but they should release your money to your currency provider almost immediately, and definitely that day. To be certain, ask the bank to confirm when they make the transfer. Wait two days then check that your currency has arrived where it should be. If not, it's time to chase up the provider for proof of when it was sent. Some overseas banks are very slow at recognising payments so you might need proof that the money has been sent.

Tips and advice
Do as much research as you can, and be sure in your own mind what type of deal is best for you. Also try to look at the exchange rate over the last few months and decide what would be a good time or rate for you to deal at. Don't rely on asking for advice from currency providers or ask them what they think you should do – regulations state they are not allowed to influence or advise you or try to predict exchange rate movements, and if any of them do this they are breaking the law. Don't assume that an exchange rate shown on a provider's website is one you can deal at.

Currency mystery solved
An Ipsos MORI Poll of exchange rates offered by ten different UK-based FX providers has listed 4X Currency as the UK's best specialist foreign exchange provider. A mystery shopper telephone exercise was conducted to find the best rates available to customers seeking foreign currency exchange, and found that 4X Currency's rate of 1.4803 Euros to the Pound was the most favourable – .73 of a cent more than the lowest placed provider.

The shopper enquired how much each FX company charged on a purchase of 165,000 euros and revealed that 4X Currency's offer – £111,463.89 – was the most competitive, and over £550 cheaper than that of the bottom-placed company.

An Ipsos MORI spokesperson reported that a further interesting finding from the research was the huge variety of registration processes available when joining up to the organisations: "Each organisation had quite different requirements for opening a trading account, ranging from forwarding certified personal documents to simply completing a few details online."

Helen Scott, Managing Director of 4X Currency, said she was delighted with the results of the survey. "Ipsos MORI is one of the UK's most trusted research organisations, and this survey has provided a much-needed comprehensive comparison between the different foreign exchange providers," she said.

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Article published on 16 April 2007