What The Banks Don’t Want You to Know About Foreign Exchange

The secrets of the foreign exchange market

The foreign exchange or forex market is the largest financial market in the world – larger even than the stock market, with a daily volume of $5.1 trillion, vs. $84 billion for equities worldwide.

This market isn’t just enormous in size, it’s also extremely profitable for certain parties.

This blog will look at why the foreign exchange market is so large, why banks profit so handsomely from it, and how you as a consumer, can save money when exchanging currency with deVere FX.

READ MORE: FX Market Report 27/04/2020

READ MORE: Your Bank Account is Losing You 3% Per Year

Why do banks profit so handsomely from foreign exchange?

The forex market is huge. It is the largest market in the world, with $5.3 trillion changing hands every single day. With such large amounts of money moving around, it gives plenty of opportunities for various parties to take fees.

Banks accused of overcharging small customers for forex services – Financial Times

Conventionally, access to the FX market was controlled by banks and brokers, so, some inevitably took advantage of their position in order to capitalise at their customers’ expense. This was and still is often in the form of hidden fees and commissions.

Exchange rates fluctuate constantly, as a result of supply and demand factors including interest rates, national debt levels, travel and tourism and international trade. The true exchange rate at any given moment between two currencies is known as the mid-market rate. Unfortunately, most banks will never offer clients this rate.

The components of a bank or broker FX transaction:

The exchange rate fee

As mentioned above, a hidden fee, known as the spread, is loaded into an exchange rate to boost the bank’s profit on the transaction.

The transfer fee

Banks regularly charge additional fees to transfer funds into the beneficiary account.

The extras 

Add-ons include: Account maintenance fees, small-print amendments and other types of charges with the main objective to extract as much money as possible throughout the transfer process through as many different methods as possible. Ultimately meaning the banks win and the consumer loses.

How can you avoid this?

Whether you are a private international investor or represent a business involved in worldwide trade, deVere Foreign Exchange provides a wide range of services that can help you save money on exchange rates and international payments.

Our dedicated FX account managers pride themselves on their thorough market knowledge and awareness of the global market. We ensure that whatever your requirement dVFX has the experience and resources to make your money go further.

Trade 190 unique currency pairings online with our new deliverable 24/5 currency platform.

Key benefits include:
  • Exchange rates up to 5% better than those offered by major banks
  • Free international payments
  • Forward contracts that enable you to fix your exchange rate for future transactions (ideal if you are buying or selling a currency property)
  • A dedicated account manager who can explain your options and help you obtain the best available exchange rates
  • Free currency-specific market updates by email
  • All funds are held in designated ‘client account’ in the UK
  • dVFX is a non-speculative organisation (We do not gamble with your money)
  • Part of the deVere Group, one of the world’s biggest international independent financial advisory firms, with over US$10 billion in funds under administration and management and more than 80,000 clients in over 100 countries

 

About us

deVere Insights is a proud component of the deVere Group. Our company has always prided itself on leading the way in the sphere of wealth management. This website is in place to share information and expertise.