Exchanging money to study abroad

Do you plan to study abroad? Then find out how to get the best exchange rate when you pay for your studies, with these 5 tips.

1. Use Google to find out the present exchange rate

You need to know the current exchange rate, before you can get a good one. To find out the exchange rate with Google, just enter the two currencies you plan to exchange into the search bar.

For instance, if you're exchanging euros for US dollars, enter "euros for US dollars" into Google. This will deliver the present exchange rate. From here, you'll be in a much better position to get a good exchange rate, because you have a frame of reference.

2. Talk to your bank or foreign exchange broker about what exchange rate you can expect

Next, while you'll clearly want to get the highest foreign currency total you can, it's important to be realistic about the exchange rate. Afterall, it's no good waiting for the exchange rate to hit a magic figure you've got in mind, if it's extremely unlikely to come up.

Given this, what you should do is talk to your bank or foreign exchange broker about what you can expect. They'll tell you how the exchange rate has performed in the last 3 to 6 months, and give you an idea of what may happen next.

3. Don't exchange currencies at the last minute

Third, it's possible that, with all the excitement of getting ready to study abroad, you leave exchanging currencies to the last minute. However, what this means is that you'll end up with whatever exchange rate is available at the time, even if it's bad.

And of course, if you're transferring a large sum to study abroad, this means you can end up with significantly less foreign currency. Given this, to ensure you have the best time you can while you're abroad, don't exchange currencies at the last minute.

4. Once a good exchange rate becomes available, don't wait to see how high it goes

Fourth, one thing that may happen is that your target exchange rate not only becomes available, but goes even higher. In such case, it's tempting to wait before you exchange currencies, to see how good the exchange rate gets.

However, I would advise against this. This is because the exchange rate is extremely volatile, with no one able to predict with certainty what will happen next.

What can happen is, while you're waiting to see how high the exchange rate goes, it suddenly falls. Then, if this happens, you might end up with a worse exchange rate than you'd placed in the first place.

5. Compare the exchange rates available, don't accept the first one you're offered

Last of all, when you finally come to exchange currencies, you should speak to a variety of foreign exchange services. This is because, in particular, a foreign exchange broker can provide you with an exchange rate up to 4.0% better than a bank.

4.0% might not sound like much, but if you're transferring a large sum, it can add up to thousands. So it's well worth the effort of speaking to more than one foreign exchange provider.

Peter Lavelle works for foreign exchange broker Pure FX