Salaries and bonuses
If you’re working overseas and want to send money back home, we can help. We can also bring your money back into the country if your salary or bonus is paid in a different currency.
We’ll get you the best rate available. We can give you a spot rate for immediate transfer or we can also fix the rate you’ll exchange at up to three years ahead, using forward contracts, so you’ll know exactly how much you'll receive in advance.
We also offer many other ways of minimising your exposure to fluctuations in exchange rates such as Currency Options. Have a look at our Foreign Exchange Services section for more information.
We’ll transfer your salary or bonus quickly and efficiently, making a same-day payment to the bank account you nominate.
We can help you find the quickest, most competitive and efficient ways of moving your money to where you need it to be. You can protect your hard earned money using a forward contract or currency options.
Converting salary
Chris recently moved job and now receives his salary in US dollars. Chris decided to speak to World First about exchanging his salary monthly at the prevailing rate each month, and arranged for his employer to transfer his salary directly to us.
Every month when we receive the dollars, we convert and transfer the sterling to his UK bank account at the prevailing rate. This means the amount he receive varies each month.
Over the last 12 months, the exchange rate has varied between 1.614 and 1.474, which has given him an average rate of 1.544.
Chris has had luck on his side, and using the prevailing rate has worked out better than if he’d locked into a forward contract 12 months ago.
We have other clients who prefer the security and consistency of fixing the rate in advance. We can help you decide which route is best for you.
Converting a bonus
Peter Dring works in the City. He’s due to receive a bonus of $300,000 US dollars in February 2011, and he wants to convert it to sterling.
If he’d chosen to lock into a forward contract, the rate would have been 1.5570 – but he wouldn’t have been able to benefit if rates had moved in his favour.
So he decided to enter into a protection option which will guarantee him a worst case rate if the exchange rates move against him – but will also allow him to benefit if the exchange moves in his favour.
This type of hedging strategy is not generally available for individuals through banks.
When he entered into the protection option, the prevailing exchange rate was 1.56. Mr Dring felt the rate might fall further, but didn’t want it to go beyond 1.60.
He bought a protection option at 1.60 for a cost of 1.5% of the total amount he was exchanging (ie, $4,500, or approximately £2,808.40).
This meant that whatever happened to currency values before he received his bonus, he would always be able to carry out the exchange at 1.60 if the rates moved against him.
This arrangement could go two ways for Mr Dring when his contract ends in 2011:
•If the spot rate is 1.80, Mr Dring will sell $300,000 at 1.60 and receive £187,500
•If the spot rate is 1.52 Mr Dring will sell his $300,000 and receive £197,368.42
Advantages
•Mr Dring is protected at 1.60 and will receive a rate no worse than this
•If the rate is better than 1.60 when the contract ends, he can benefit
Disadvantages
• There's a premium to pay (there are also non-premium Currency Options that we can offer
While you’re working hard for your money, World First will work hard at making sure it stays in your pocket.
Call us on 0800 542 7488, or +44 20 7801 1050 to see how we can help. Alternatively arrange for us to call you back.
