Why is the exchange rate in the comparison table lower than the published exchange rate?
Foreign exchange brokers make their profit in the difference between the published exchange rate (also known as the inter-bank, mid-market, wholesale or headline exchange rate) and the exchange rate offered. This is known as the spread or margin and the same as paying a commission or fee. This exchange rate offered can be up to 5% better than a high street bank and even slight differences can have a huge impact in the cost of your foreign exchange transaction.

How do you ensure the brokers are safe and secure?
All of the foreign exchange brokers that are listed on currencytoday.co.uk attain the strictest standards and must meet the following criteria:

1. Authorised and regulated as a Payment Institution by the Financial Conduct Authority (FCA)
2. Licensed Money Transmitters by HM Revenue and Customs
3. Operate segregated client bank accounts in accordance with FCA rules on the safeguarding of client funds
4. Are well established and respected in the foreign exchange industry
5. Have a strong financial position (ownership, accounts, ratings and references)

What is the Margin?
This is the percentage difference between the inter-bank rate and the rate you are offered (also known as the spread). If the headline rate is 1.1800 and the rate you are offered on £20,000 to Euros is 1.1718 the margin you are paying is 0.7%, 82 pips OR a commission of £140. Please remember "No commission" doesn't exist as the broker wouldn't make any money or be in business!

What is a Pip?
This is also known as a tick or a point and is the fourth decimal figure on an exchange rate e.g., on GBP vs. Euro the difference between 1.18 and 1.1718 is 82 pips (0.0082) or 82 points.

What is a cent?
This is the second decimal figure on an exchange rate e.g., on GBP vs. Euro the difference between 1.1800 and 1.1700 is 1 cent (0.0100) otherwise known as 100 points / pips. Please note one hundred points is not the same as 1%. A 1% commission on these two exchange rates is 118 pips / points. You simply move the decimal point two spaces to calculate the equivalent in pips for 1% on a GBP vs. Euro exchange rate.

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