Money Transfer Spotlight: What You Should Know About Forward Contracts

23-04-2020 | treasuryXL | XE |

XE said it before: not all money transfers are created equal. Depending on…

  • How much money you want to transfer,
  • What currencies you want to exchange,
  • When you want to make your transfer, and
  • Whether you want to take your time to get the best possible rate

…the type of transfer that’s best for you could vary.

When you just want to make just one quick transfer on the spot, without any additional considerations or extra hassle, a simple spot transfer will make the process quick and simple. If you know you’re going to be making multiple transfers on a consistent basis, Regular Payments will ensure that you can make all of your payments, without having to worry about entering the same information ad nauseam.

But let’s say that you know you want to make a money transfer, you know how much you want to transfer, and the rates are good, but you’re not quite ready to send it out. In that case, you’ll probably want a forward contract for your international money transfer.

What is a forward contract?

In a forward contract, you’re making an agreement to transfer:

  • A predetermined amount of a certain currency
  • To another predetermined currency
  • At a predetermined date
  • At a locked in currency exchange rate.

In short? You let us know what you’re exchanging, how much you want to transfer, and when you want to make the transfer, and your transfer will be sent on that date. So if the rates are in your favor but you aren’t planning on making a payment or purchase just yet, you can still take advantage of the favorable rate without having to make your full transfer.

We like to think of forward contracts as the buy now, pay later option. You’ll pay a small deposit now, but you won’t make the bulk of your payment until your set transfer date.

When would a forward contract be the right move for me?

Forward contracts are a great option if you’re worried about potential fluctuations in your currency pairs. Sure, you could just wait until you’re ready to make your payment or purchase to make your transfer, but you can’t guarantee that you’ll like your rate when the time comes.

Are you planning on making any larger purchases, particularly property or investments? You can ensure you’ll get the most for your money if you lock in your good rate now, even if you won’t be making your transfer for months.

How do I set up a forward contract?

Setting up a forward contract is no more complicated than any other money transfer. Ready to get started? Visit our Money Transfer page to learn more about our options and how we can help you initiate your transfer.

 

Get in touch with XE.com

About XE.com

XE can help safeguard your profit margins and improve cashflow through quantifying the FX risk you face and implementing unique strategies to mitigate it. XE Business Solutions provides a comprehensive range of currency services and products to help businesses access competitive rates with greater control.

Deciding when to make an international payment and at what rate can be critical. XE Business Solutions work with businesses to protect bottom-line from exchange rate fluctuations, while the currency experts and risk management specialists act as eyes and ears in the market to protect your profits from the world’s volatile currency markets.

Your company money is safe with XE, their NASDAQ listed parent company, Euronet Worldwide Inc., has a multibillion-dollar market capitalization, and an investment grade credit rating. With offices in the UK, Canada, Europe, APAC and North America they have a truly global coverage.

Are you curious to know more about XE?
Maurits Houthoff, senior business development manager at XE.com, is always in for a cup of coffee, mail or call to provide you detailed information.

 

 

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