One necessary evil that you’re going to have to get to grips with when moving to Hong Kong is that of currency exchange. It’s likely that you’ll have payments to cover back home – such as mortgages, the kid’s university fees, household bills – and if you’re being paid in Hong Kong Dollars, then being at the mercy of the currency markets comes with the territory. And of course, you may have to convert money from home into Hong Kong dollars as well.
The thing is, when changing money between currencies you can either come out as a winner or a loser. OK, we all accept that it’s going to cost us something to change between one currency to another. But depending on the service you use, you can either get a fair exchange rate, or you can lose out big time with rubbish rates, not to mention paying fees and commission.
This guide is all about discovering the options available to you – and more importantly, the ways to change between currencies without losing a big chunk of your cash to the powers that be.
In our humble opinion, there are four major considerations to factor when changing Hong Kong dollars to your home currency (and vice versa). These are:
- Getting the very best exchange rate
- Not paying crazy commissions or fees
- The speed of the transaction
- The safety and security of your money
Currency exchange options
In short, there are three ways in which you can easily exchange your money.
- An exchange bureau (like the ones you see on the streets or at airports). Let’s immediately discount this – you get ridiculously low rates of exchange, pay commission and/or fees.
- Next up – your bank. Mmmm… Let’s consider the banks against the four pointers we mentioned above:
- Getting the very best exchange rate: Banks do not offer good exchange rates. In fact, they are regularly 3-5% less than you can easily get using a different type of currency exchange.
- Not paying crazy commissions or fees: Banks always charge fees or commission. And if they promise you they don’t, then they make up for it with their lousy rate of exchange.
- The speed of the transaction: Banks are historically slow at completing any transaction. And in the case of currency transfers, this typically can take up to 4-6 days. Of course, you can pay for an expedited service – but naturally there’s going to be a charge for that…
- The safety and security of your money: OK, the banks do come out well in this section. But isn’t there a currency exchange option that ticks the boxes in all four of our major considerations?
Happily there is! And it’s known as a FX Broker
Also known as a Foreign Exchange Broker. In short, an FX Broker is a non-banking company that makes its money by buying and selling currency. But as an offset of this, they provide currency exchange to both businesses and individuals.
So how does an FX Broker score on our four essential points?
- Getting the very best exchange rate: Because FX Brokers deal directly with the currency markets (and this includes fixing rates for future conversions), they can provide you with near perfect rates when exchanging your money. In fact, on average you’ll gain an extra 3-5% when converting your money with these guys, as opposed to using a bank.
- Not paying crazy commission or fees: In general, there are no commission or fees to pay when using such a service. The only exception might be if you’re only changing up a small amount of money (say below £3,000 sterling or $4,000 US).
- The speed of the transaction: In most cases the currency conversion is carried out within the day. And you’re kept up to date with status reports every step of the way (usually via email and/or SMS).
- The safety and security of your money: The best FX brokers are regulated by what’s known as the FCA (the UK Financial Conduct Authority).
As you can see, FX brokers stand out as the very best way to carry out currency exchange. Of course, the next thing you need to discover is which company to use.
There are a lot of FX brokers out there, and it can seem a bit of a minefield as to which one to choose. The brokers we’ve listed are ones that we’ve had personal experience using, or have been recommended to us by people we trust. They’ve all been successfully trading for a good number of years, consistently are rated highly by their users and are fully regulated by the FCA.
- Award winning Torfx have been in business for over a decade.
- Set up your free account online or over the phone.
- Make online transfers 24/7.
- Use the services of your own Personal Account Manager
- Fix exchange rates up to two years in advance
- Winner of the ‘International Money Transfer Provider of the Year’ and the ‘Consumer Moneyfacts Best Customer Service’ awards.
- Currency Solutions are based in London, UK, and have been carrying out currency transactions since 2004.
- Set up regular transfers at a set exchange rate, making it easy to budget your funds.
- Have been ranked as number 1 on the review site, TrustPilot, for 3 consecutive years.
- Rates for both small and large currency conversions are far higher than that offered by the banks.
- Fix and set rates for future transfers, and only transfer the funds when the date arrives.
- TransferWise has Richard Branson as one of its backers and is the creation of the people behind Skype. The company was launched in 2011 and has their HQ in London.
- Set up your free account in seconds – either with an email address or via Google or Facebook.
- Simplicity itself to discover the exact amount you’ll get for your conversion by simply using the website tool or speaking to a customer service advisor.
- Transfer between multiple currencies.
- Recently renamed OFX (they were previously called UK Forex) have been currency specialists for 17 years
- They provide multiple methods in which to set up your currency exchange: online, via the telephone or by using their mobile app. Each option is available 24/7.
- Offers one of the largest currency exchange options, working in 55 different currencies.
- Most transactions are carried out on the same working day.
- FC Exchange has been in business since 2005 and are based in the City of London.
- A free account set up is simple (takes minutes) and is obligation free.
- Offers the ability to set up regular payments.
- Exchange rates have been secured for the future, guarding against any major currency readjustments. This means that whatever happens to currency rates in the short term, you’ll be guaranteed to benefit from the best rate possible.
- Have been featured in UK newspapers, The Telegraph and The Times.
Here are our recommendations again: