What is a spot transfer?

2 min read

A spot transfer is a foreign exchange agreement between two parties to buy one currency by selling another at an agreed price on an agreed date within the next two working days, known as the spot date.

The spot rate of the transfer is set by the exchange rate at the time you exchange your currency, and fluctuates by the second. You could call it the here and now rate – make an immediate exchange between any two currencies and the rate you pay at that point is the spot rate.

Spot transfers are the simplest, quickest and most common type of currency exchange. With a fixed spot rate that tells you exactly what the transfer will cost, you have all the information you need to make your exchange straight away without help or consultation. This is useful for simpler transactions like paying people overseas and buying foreign products or currency.

Is a spot transfer instant?

Spot transfers have to happen within two working days, on what’s called the settlement date. So although it’s very quick, it’s not instant (although we usually do them on the same day).

A quick example:

  1. Justine owns a travel booking business in the UK but pays her foreign contractors like tour guides and transport operators in euros, which means she needs to exchange €50,000.
  2. She speaks to her Clear Currency account manager who gives her an immediate spot rate on the pound versus the euro so she knows exactly how much she’ll have to spend in pounds to get that €50,000.
  3. Justine agrees to the spot rate, transfers her pounds to Clear Currency and has her euros within two working days. Simple.
The Clear Currency effect:

Keep it simple

spot rate

The spot rate is the set exchange rate for the transaction.

spot date

The spot date is the day the transaction takes place.

settlement date

The settlement date is the day you get your currency.

What spot?

You may see it called a spot FX trade (the FX means foreign exchange), spot deal, spot transaction or even simply a spot!

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