Maximising Offshore Savings
Minimise Forex charges through an intermediary
In today’s era, forex intermediaries have proven invaluable for minimising foreign exchange charges, offering cost-effective ways to manage and transfer funds internationally.
Lower transaction costs: streamlines forex transaction costs, by ensuring a more direct and efficient process.
Real-time exchange rates: access to real-time rates means clients can make informed decisions at the most advantageous times. This again helps individuals and businesses optimise their forex transactions and cut costs.
Transparent pricing: transparency and consistency in margins and spreads are important when it comes to foreign exchange transactions. Typically, intermediaries bring greater fee transparency compared with traditional banking institutions.
Brown, however, highlights a common oversight: individuals are often unaware of the two revenue streams for a bank or foreign exchange intermediary in a trade.
Beyond the obvious stream of commissions and fees per transaction, which is typically clearly stated on the trade advice, the second fee lies within the exchange rate – the spread or margin that is added to the interbank exchange rate.
“Clients need to be aware of the percentage margin or cents that is added to the exchange rate, which could vary and is typically very opaque in the industry. A healthy spread or margin ensures the client receives competitive pricing on the exchange of their currency.”
While offshore savings offer numerous benefits, Brown underscores the importance of understanding all associated risks and striving for a balanced approach.
“On the positive side, offshore savings can provide opportunities for higher returns, asset diversification, and greater financial security. But, they also come with currency exchange rate risks, geopolitical factors, and regulatory challenges. By adopting these strategies, South Africans can safeguard their wealth and capitalise on international investment opportunities.”
