Which currency exchange contract?
At Interchange we can help you to choose the right contract. The contract is important, because as well as tailoring it to your particular transaction, it can secure you a better rate.
The kinds of options available are: spot contracts, fixed term forward contracts and forward time options contracts. Our account managers will explain these to you, and help you decide which contract or combination of contracts is in your best interests and currency exchange needs.
Exchanging Currency with Interchange is easy. If you are a Business client
SPOT CONTRACT
A Spot Contract is the contract to use when you need a currency immediately. It enables you to purchase your currency at today’s rate. The money is made available for delivery immediately on receipt of your cleared funds. It can either be transferred telegraphically to your designated account, or held on account pending your instructions..
FIXED TERM FORWARD CONTRACT
This is used where you have a future commitment to pay monies on a fixed date in the future, for example a stage payment on the purchase of a house under construction. You can fix the rate for up to 2 years ahead. The rate is fixed and locked in at the time of the agreement, and remains constant irrespective of fluctuating exchange rates.
It ensures that your financial commitment is fixed and constant in pounds sterling. It’s a form of insurance often used by large companies to ensure that their commitments or monies owed to them in foreign currency are fixed in value in pounds sterling.
FORWARD TIME OPTION CONTRACT
A Fixed Term Forward contract is used where you have a future commitment to pay monies on a fixed date in the future, for example a stage payment on the purchase of a house under construction. You can fix the rate for up to 2 years ahead. The rate is fixed and locked in at the time of the agreement, and remains constant irrespective of fluctuating exchange rates.
Cap your costs
An added advantage of a forward contract is that you only need to make a deposit between 5% and 10% of the contract value. This allows you to cap the cost of your future commitment, while retaining your capital until the payments are due.
For more information on the various options that are open to you, or a quotation, call one of our account team on 0800 107 4443.
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FOREIGN CURRENCY EXCHANGE SERVICES
