You could try a currency broker like "currencies direct" or "hifx" as they will offer forward contracts for around a 5-12% deposit. There not allowed to do it for speculation purposes so you would have to tell them that you were buying a house in spain or soemthing.
I used to work as a currency dealer and I haven't heard of isxfx however by the sounds of it there definitely worth investigating as they seem to offer services similar to what your looking for. How much are you looking to hedge and what currency's eg. sterling-dollar?
Have you thought about using instruments such as CFD'S, Spread bets or covered warrants.
Basically your only going to get close to interbank if your doing amounts of around £5-10 mill sterling. Anything over say £250 000 you should get about 0.3% off interbank. Around the £100 000 mark you will get 0.5-0.7%. Around the £50 000 or below your only going to get about 1-1.5% of interbank. These margins are for spot rates it will differ for forward contracts and depending on what currency. Let me know what currency's your looking at and i can advise you better.
Be warned if they think they can get away with more they will try. Keep your cards close to your chest and let it be known you have Reuters or Blomberg terminal and that your monitoring the interbank. They'll be finding out how switched on u are from the word go, so just let them know you mean business.
I'm not sure about the 1% margin. We wouldn't go below around about 5% but this was for regular clients or for those who's amounts were small say £15 000. I know some speculative brokers will let you play with margins around1-2% but you usually have to have a big account with them say around £50 000.
I think ISX FX have just started, they guarantee to beat any other rate offered. I was quoted 0.5% away from the interbank bid by HIFX, but ISXFX quoted me 0.25% away, thats a 25pip saving. I asked how they can offer such a service as I myself have worked for deutsche & cmc, but they did not say.
My trade was for £100,000 into USD, thats $250 for ISXfx (i don't know how they make money).
They also quoted me a 2 - 5% margin on forwards of any size.
I have traded CFDs whilst I was at CMC and I don't trust any RFQ systems (too much manipulating).
I agree about trying to rip you off. When I first called HIFX, they quoted me 1.5% out on a £50,000 trade. I told them that I traded Futures from the states and needed to hedge my account. After this (I guess because they now that I have a good understanding of the market) they were willing to go down to 0.5%. Funny that!
By the sounds of it I'd give ISXFX a try. The only thing to wary of is that they quote you 0.25% of interbank and when you come to do the deal you dont get that rate and you say "hang on a minute what happened to that really good rate" and they say "sorry mate thought you were doing half a mill when I quoted you" Its a well known trick. You may want to sign up with a couple and get into a dutch auction for the best rate. They hate that cos your playing them at there own game.
Make sure that they offer you a time-option forward rather than a fixed forward. Because of the way the interest rates for sterling and dollar are you can get time-options at no extra premium. it basically means if you want to you can take delivery of your funds at any point up to the maturity date rather than at the maturity date for fixed forwards.