Forward Contracts
Fixed, flexible or window forward: match it to your date.
One locked rate. Three ways to draw the currency against it. The right one depends on how certain your settlement date is.
A forward holds an exchange rate for a currency payment you have already committed to but will settle later. What the fixed, flexible and window variants change is not the rate. It is when you are allowed to draw the currency against it.
This is a three-way choice, not the two-way one the name suggests. The deciding factor is your settlement date: fixed when you can name the exact day, flexible or window when that day is still uncertain. We set out all three, so the later window example is no surprise.
One point to carry from the start. Whichever variant you pick, the full amount is still committed, and you must settle it by the final date even if the underlying deal shrinks or falls through. Later on we put the cost of that in pounds.
Currency Expert compares and introduces business FX providers. Tell us the currency, the amount and how firm the date is, and we will help you compare providers whose terms fit the transaction.
There is no charge to use Currency Expert. We may receive a fee from a provider if you become its customer.
Start with the date, not the product
A forward assumes you can name the day you need the currency. The moment that day is uncertain, the choice of variant follows from the shape of the uncertainty.
Before you choose a variant, answer one question: when will you actually need this currency, and how sure are you of the day. A fixed forward assumes you can name the exact value date. The moment that date is uncertain, settling the whole amount on a single fixed day becomes the problem.
“Uncertain” splits two ways, and the split decides flexible against window. Sometimes you know the rough period but not the exact day, a completion that could land anywhere in a month. Sometimes you must draw in an unpredictable series of instalments across the whole term.
The plain rule falls out of that. Choose a window forward when you know the rough period but not the exact day. Choose a flexible forward when you must draw in unpredictable instalments. We carry the mechanics, the numbers and our own view in the sections below.
One caveat before you go further. Date flexibility changes when you draw the currency, not whether you are committed to it. You are still on the hook for the full amount by the final date, and we come back to what that costs if a deal collapses.
Three ways to hold the same rate
The rate is identical across all three. What differs is the draw-down: one fixed day, a run of instalments, or a defined future window.
Fixed forward: one exact date
A fixed forward, sometimes called a closed or standard forward, locks the currency pair, the amount and the rate against one exact value date. On that maturity date you settle the full amount at the locked rate, whatever spot has done in between.
It is the cheapest of the three, because the provider knows precisely when it must deliver. It fits only where your date genuinely will not move.
Flexible (open) forward: draw down any time to expiry
A flexible, or open, forward locks the rate but replaces the single date with a final maturity date. You draw portions of the total at any time up to that expiry, and the whole amount must be drawn and settled by the final date.
Watch the per-draw minimum. If you expect to take, say, EUR 5,000 at a time, a provider that sets a minimum draw of, for example, EUR 25,000 quietly limits how granular that flexibility really is. Those figures are illustrative; ask the provider for the actual minimum.
Window forward: draw down inside a defined window
A window forward also locks the rate, but confines draw-down to a pre-agreed future window, say 1 October to 30 November, rather than from the day you sign. You draw the currency on any day inside that window.
It is built for the case where you know roughly when the money is needed but not the exact day, such as a property completion or a staged supply-chain payment.
Flexible vs window: how the draw-down mechanics differ
The difference is the shape of the draw-down, not the rate. A window forward gives you one defined future period and expects you to draw inside it, usually in one or a few goes, once the event lands.
A flexible forward gives you the whole term from signing to expiry and lets you draw repeatedly, in tranches, as an unpredictable schedule unfolds. Same locked rate: a single defined window on one side, a run of instalments across the full term on the other.
One earned warning a public glossary will not give you. Providers use “flexible”, “open”, “window” and “open-dated” inconsistently, sometimes interchangeably. Do not choose on the label. Ask what the draw-down rules actually are: from when, until when, and the minimum draw size per instalment.
A fourth product sometimes joins the same conversation, but it answers a different question. A dynamic forward trades a less favourable protection rate for the right to keep some upside if the market moves your way, for a premium.
It does not hold the same rate as these three, and it is a decision about upside rather than about your date. We cover that trade-off in the options and structures section of our corporate FX guide, not here.
What draw-down flexibility costs, in pounds
Flexibility carries a small premium, and it scales with how wide a window you buy. Forward points are a separate cost that sits under every forward.
Run one number through this whole page. Take a European property completion with a sterling cost of about £500,000, roughly €575,000 at an illustrative rate. We carry that same £500,000 into the worked example and the risk section, so you track one set of pounds.
The flexibility premium, and why a wider window costs more
Flexibility is not free. Because the provider does not know which day you will draw, it prices the worst case within the window. So a window or flexible forward carries slightly less favourable forward points than a fixed-date forward. You pay for the right to move the date.
Put an illustrative figure on it. On £500,000, an extra 0.2% for a tight window of about 30 days is around £1,000. That is the cost of the right to draw on any day in that month rather than one named day.
The premium scales with how much flexibility you buy. A wider window of about 90 days, at roughly 0.5%, is around £2,500 on the same £500,000, against about £1,000 for the 30-day window. Both are illustrations, but the direction is real.
The flexibility premium on £500,000, illustrative
Forward points sit underneath, and can help or hurt
Underneath every forward, fixed ones included, sit forward points. These come from the interest-rate differential between the two currencies over the term, and they are separate from the flexibility premium. Forward points can move in your favour or against it; the premium only ever adds.
The one fact that stops you getting the sign backwards: the currency with the higher interest rate trades at a forward discount, so its points are subtracted. Whether that helps or hurts a euro buyer depends on which way the rate differential runs.
We keep the full dated, worked GBP/EUR mechanics in our currency hedging guide rather than repeating them here, because they apply to every forward.
The point to hold here is narrower: do not conflate the two costs. Forward points sit under all forwards and can help or hurt; the flexibility premium sits on top and only adds. When you compare quotes, you want both visible.
A property completion that slips into next month.
The same £500,000 completion, this time priced for a date that moves rather than a deal that collapses.
Worked example
Say you date a fixed forward for 31 October, expecting to complete then. The purchase slips into November, as completions do. The forward still matures on 31 October, so you must either take delivery of euros you cannot yet use, or roll the contract, extending it by a month through an FX swap.
The roll is not free. Its cost is the interest-rate differential for the extra month plus the provider’s spread, and it can come to more than the roughly £1,000 you would have paid for a 30-day window. Paying to fix a date you were not sure of is how a simple forward turns expensive.
A window forward covering roughly a 30 to 60 day period avoids that. You draw the euros on the day the solicitor confirms, at the rate you already locked, with no roll and no scramble.
The completion is one draw inside a known period, which is why it points to a window. Contrast a staged supplier deal you pay in unpredictable instalments across the whole term. That is the flexible forward’s shape. Two different exposures, two different variants, one locked rate behind both.
Read this before you sign
Draw-down flexibility does not cancel the obligation.
Whichever variant you choose, the whole amount must still be drawn and settled by the final value date, even if the deal shrinks or falls through. A flexible or window forward is not an escape hatch. It gives you room on the day, not a way out of the trade.
Take the same £500,000 completion. Say the purchase collapses and you no longer want the euros. You still hold the forward. If spot has moved about 3% against you, closing it out crystallises a loss of roughly £15,000 on the full amount. That figure is illustrative, but the mechanism is not.
That close-out loss is the real cost of the obligation, and it is separate from, and can dwarf, both the flexibility premium and the roll cost above.
There is a second point, quieter but worth stating. Buying draw-down flexibility does not reduce the deposit. The deposit is set on the notional, not on how freely you can draw it. A window forward and a fixed forward on the same £500,000 tie up the same cash.
We keep the full deposit and margin-call mechanics in our currency hedging guide, since they apply identically to every variant. What draw-down flexibility buys you is timing. What it does not buy you is a smaller commitment, or a smaller deposit.
Our view: buy only the flexibility the date needs
Match the product to the date, and match the width of the window to the actual span of uncertainty.
If the date is genuinely fixed, buy a fixed forward. It is cheaper, and there is no reason to pay window pricing for a day you already know.
If the day is uncertain but the rough period is known, the window is usually worth more than the last fraction of a per cent on the rate. As the completion example shows, it is also usually cheaper than rolling a mis-dated fixed forward.
Our call between the two variants is straightforward. Buy a window when you know the period, a completion or a delivery month. Buy a flexible or open forward only when the draw-down is genuinely unpredictable across the term, accepting that it prices the widest worst case.
Do not reach for the flexible product to cover a single uncertain day; the window is tighter and cheaper.
Match the window to the actual span of uncertainty. Paying about £2,500 for a 90-day window when a roughly £1,000 30-day window would cover the date is spending real pounds for flexibility you will not use.
The dynamic forward is a separate decision about keeping upside, not a date-certainty tool, and we price that trade-off in our corporate FX guide.
Who offers which variant, and what to ask
Not every provider offers every variant, and some offer no forwards at all. The terms drift, so date any specific claim and confirm it before you rely on it.
Some money-movement services offer no forwards at all. Wise, for instance, provides spot transfers and multi-currency balances only, not forwards (checked 14 July 2026). That kind of claim drifts, so we date it, and you should confirm it against the provider’s own terms.
- ◆Which variants do you offer, and what are the actual draw-down rules, from when and until when?
- ◆Is there a minimum draw-down amount per instalment, and what is it?
- ◆Is the deposit returned proportionally as I draw down, or only at final settlement?
- ◆What is the deposit percentage on this contract?
- ◆Can the window be extended if completion slips, and on what terms?
A proportionate next step
Once you know which variant the date calls for, compare live forward quotes from specialist providers against the same mid-market rate before you commit. That comparison, not the transfer fee, is where the money on a payment this size is decided.
Where your deposit sits
Safeguarding is not the same as FSCS protection.
A forward ties up a deposit set on the notional, and that cash is safeguarded in segregated accounts under FCA rules, separate from the firm’s own money so it can be returned if the firm fails. That is real protection, and different in kind from a bank deposit.
The FSCS deposit guarantee, £120,000 per eligible person since 1 December 2025, covers bank and building society deposits, not money held with an FX provider, whatever the amount.
Any provider that implies FSCS cover on a safeguarded account is one to question. The FCA’s safeguarding regime also tightens from 7 May 2026, with daily reconciliations and, for larger firms, annual audits.
Tell us the currency, the amount and the date.
Share what you are buying, roughly how much, and how firm the settlement date is. We will identify providers whose forward terms fit, and be straight about what the flexibility costs and what the obligation commits you to. You decide whether to proceed, and deal directly with the provider.
Common questions
How do I choose between a flexible and a window forward if my date is uncertain? +
If you know the rough period but not the exact day, a completion likely to land within a month, choose a window forward. If you must draw the currency in unpredictable instalments across the whole term, choose a flexible or open forward. The window is tighter and usually cheaper.
Can I extend a window forward if completion is delayed, and what does extending cost? +
Sometimes, on terms that vary by provider. Extending a forward means rolling it through an FX swap, priced on the interest-rate differential for the extra period plus the provider’s spread. Ask before you book whether the window can be extended and how the roll is priced.
What happens if I cannot draw the full amount by the final date, or the deal collapses? +
The obligation stands. The whole amount must be settled by the final value date. If the deal collapses, you still hold the forward, and closing it out can crystallise a loss. On a £500,000 forward, a 3% adverse move is roughly £15,000. Draw-down flexibility does not remove that.
Is a flexible or window forward more expensive than a fixed one, and does a wider window cost more? +
Yes, slightly, and yes. Because the provider prices the worst case, flexible and window forwards carry a small premium over a fixed-date forward. It scales with width: on £500,000, roughly £1,000 for a 30-day window against about £2,500 for a 90-day window. Illustrative.
Do I pay a deposit on a window forward, and is it returned as I draw down? +
You do, and the deposit is set on the notional, not on how freely you can draw. Whether it is released proportionally as you draw or only at final settlement varies by provider, so ask. Buying a window does not reduce the deposit compared with a fixed forward on the same amount.
Is a dynamic forward the same as a currency option? +
They are close cousins. Both trade a premium, or a less favourable rate, for keeping some upside, and both sit outside the scope of this page. This guide is about matching a locked-rate forward to your date. For the upside trade-off, see the options and structures section of our corporate FX guide.
Match the forward to the date you actually have
A good forward decision is not a market prediction. It starts with how certain your settlement date is, then buys only the flexibility that date needs and no more.
Tell us the currency, the amount and how firm the date is, and we will help you compare providers whose forward terms fit the transaction.
For how we compare a provider’s rate and fee against the live mid-market, see how we compare providers.