The price we agreed for some property was in GBP which avoided exchange rate concerns of both the vendor and purchaser. However the sale had to be in Euros from a Spanish bank. And it was agreed that the exchange rate to be used would be that of the day before the completion. Again to reduce risk we planned to exchange the money as late as possible.
Having considered many many options we transferred around £40,000 from a UK bank to a GBP account at La Caixa. We were due to pay £8 in the UK and 0.4% at La Caixa (as they were GBP, expensive at £160 but less than some of last week’s exchange rate changes).
The money was sent and arrived ... but ... it was sent as Euros. The good news is that La Caixa did not charge us £160. The bad news is that this meant buying Euros and then selling them for GBP. This was not a notional transaction using the same rates and so would cost us. However the UK bank converted it to Euros at a very good rate, then La Caixa’s rate to buy GBP was so bad that we ended up with over £1000 less in the GBP account in Spain than had left the UK.
Next we then had to convert the GBP in La Caixa into Euros. Again La Caixa’s exchange rate was very bad. Compared to the rate available at FTT (an online currency broker we also used and where everything is really clear) we got about 500 Euros less from La Caixa. This was even after the bank official waived the commission fee.
Finally, we went to collect the bankers cheques on the morning of completion. We had little reaction to the fact that we would be charged approaching 100 Euros for the cheques. The bank official showed us that she had reduced the charges from the standard amount, but not down to zero which is what we had been told would be the cost 3 weeks earlier.
In summary when transferring GBP to a GBP account, check that they will not get exchanged for Euros on the way (obvious though this seems) and La Caixa are great for customer service, but have TERRIBLE exchange rates.
If we had moved all the money with FTT we would have been at least 1500 Euros better off, out of £40,000. So much for research and reducing risk!