The importance of exchange rates can not be overemphasized; it basically affects the economy of a country, a business, an employee, and an individual too. Due to their impact on international commerce and financial flows, exchange rates are essential to a nation’s economy.

When sending money abroad or purchasing on international websites, exchange rates also play a major role. This is why it is important to be fully aware of all that exchange rate entails, you can read about that here. Also, you should always take the time to choose the supplier with the best conversion rate for your currency combination if you want to save money.

When foreign conversion rates are favorable, you can find incredible deals, but when they are unfavorable, you end up spending much more than you budgeted. You will learn how you can get the best of the exchange rate in this article.

How to get the best exchange rates on international transactions

It is almost impossible to not have at least one or two transactions to do internationally, we are either purchasing something online, or we are transferring money to someone in another part of the world, or we want to study as an international student. There will always be a need to use the exchange rate if we do any of these.

Here are a few tips you can use to get the best exchange rate when you carry out international transactions

1. Learn about the exchange rates

Exchange rates are important in affecting a country’s trade and economic performance, and they frequently have an indirect effect on a variety of aspects of your day-to-day life, including the price of your groceries at the neighbourhood market, the cost of fuel, employment opportunities, and even the interest rate on your bank loans.

Therefore, It is important to have proper and adequate information on how the exchange market works. That way e can understand the factors that influence the exchange rate changes, how the foreign exchange market works, and how to interpret the basic exchange charts and graphs. You can read more about that here.

2. Examine the exchange rates early

Early examination of exchange rates is important. Foreign currency rates are a bit difficult to forecast because not only do prices change daily, but they are also not uniform. To be safe, you should begin monitoring currency moves for at least a month before you intend to make your international transaction.

That way you can purchase when your currency is stronger and the rate is rising. Additionally, try to avoid purchasing currency at the last minute because the rates tend to be higher when it is urgent. Therefore, you should order it in advance for a little higher rate.

3. Avoid exchanging money at airports or railways

You should avoid doing your currency exchange at airports or railway stations since, although being handy, these kiosks seldom provide the greatest prices. You’ll discover that they extort a lot of money from people while preying on their urge to exchange money.

Know your currency’s mid-market rate. Exchange rates are skewed in favour of money transfer service companies. To determine who is providing the best currency exchange rates, it is thus advisable to utilise the mid-market rate as a benchmark.

4. Use international banking applications

Consider utilising an international banking app to handle your money if you frequently go abroad or have to make international transactions. Services like Wise (formerly TransferWise), OFX, WorldRemit, Revolut, and some other online money transfer services provide reasonable exchange rates and minimal margins.

Holding several currencies and transferring money to accounts in other nations are made simpler by these apps. These service providers often charge less than regular banks when sending money abroad or making international transactions.

5. Use transfer tools like limit orders, forward contracts, and recurring payments.

To obtain a stronger exchange rate, think about using a currency forward contract to exchange your money. Especially if you are purchasing a house overseas or making another significant purchase and have determined what is an acceptable exchange rate for your plans.

This gives you the opportunity to lock in a favourable exchange rate for up to two years, ensuring that you won’t lose money if the FX market changes negatively and that you will know the exact cost when it’s time to settle.

This is also helpful if you need to stick to a budget on other occasions, including when starting a business overseas or organising a destination wedding. Please be aware that certain forward contracts call for a deposit. Therefore, you should do your research well.