Glossary entry

Rate lock

A rate lock is a feature that holds an exchange rate for a set period or for a specific transfer, so the rate does not change while you complete the payment. It can give certainty if you have a fixed budget, but it also means you cannot benefit if the market moves in your favour. Check how long the lock lasts, what happens if your payment arrives late, and whether there is a fee or deposit. A quote that does not say whether the rate is locked is worth asking about. See also: forward contract, spot rate, and the guide How to Read a Money Transfer Quote.