A guaranteed rate is where OFX agrees to a rate with the client for a conversion. This is most useful if a client needs to convert money today they know how much they need to pay. The alternative is an indicative rate where the client knows they have a payment to make in the future so they want to set it up now but the rate will only apply to the customer on the day the conversion takes place. A third option does exist where if a customer wants to book in a forward contract they are able to book a guaranteed rate for the future but paying a deposit up front.

Once you confirm a guaranteed rate conversion the rate is locked in. To keep your agreed rate, you’ll need to have cleared funds in your Global Business Account within two business days. If the funds aren’t received in time, your transfer will be cancelled and a late settlement fee will apply. This fee covers any loss caused by reversing the transaction.

Key aspects of guaranteed rates include:

1. Security Against Volatility: By locking in a guaranteed rate, customers protect themselves from adverse movements in the currency market, providing certainty about the amount they will pay or receive.

2. Binding Agreement: Once a guaranteed rate is established, it becomes a binding contract between the customer and the financial institution, meaning that both parties are obligated to adhere to the agreed-upon terms.

3. Potential Fees: Customers should be aware that there may be fees associated with securing a guaranteed rate, particularly if they need to cancel or amend the transaction after the rate has been locked in.

Guaranteed rates are particularly useful for businesses and individuals who want to manage their exposure to currency risk effectively.

Why is this page important?
Understanding guaranteed rates allows users to make informed decisions regarding currency conversions, helping them mitigate risks associated with currency volatility.

Next Steps:

1. When considering a FX payment, evaluate whether securing a guaranteed rate aligns with your financial strategy.

2. Review any associated fees before locking in a guaranteed rate.

3. Contact customer support if you have questions about how guaranteed rates work.

Other Useful Articles:

• What are my FX rates?

• What is an indication rate?

• How do I book a Forward Conversion?