We take a look at why not using your bank for foreign exchange is generally a good idea to save money. As an example, we show 6 tables to compare the 4 big Aussie banks to two currency exchange specialists, OFX and Travelex.
Why are Bank Exchange Rates so Poor?
While banks can handle international transfer of funds it is often not the main focus in their relationship with customers.
Banks are especially bad at offering payments to smaller countries or currencies that are not among of the most popular ie: AUD, USD, EUR, CAD, NZD etc.
Banks value the reltionship they have with their customers in terms of taking deposits and making loans, but less so in terms of payments especially international payments.
Latest Rates from the Big Four Aussie Banks
These four table show the latest rates from the big four Ausrtalia banks (CBA, ANZ,NAB and Westpac) for foreign transfers and travel money. The percentages with the rates show how much margin the bank is charging compared to the market mid-rate.
You can click the rates to goto directly to the comparison table for the currency and transaction type of your choice.
Now Compare the exchange rates from OFX and Travelex
If you’re still using your Australian bank to make money transfers chances are you’re paying excessive fees and receiving inferior exchange rates.
To illustrate the point, the two tables below let you can compare the above bank exchange rates (and margins) to those currently being offered by two of our FinTech partners – OFX for foreign transfers and Travelex for online travel money purchases.
You can use our foreign transfer calculator which ranks FX providers and banks according to customer service, use feedback plus most importantly the exchange rate costs compared to the mid-market rate and to the banks.
Making overseas transfers via your bank’s online banking service is often convenient and relatively easy. But Banks know this so the exchange rates and fees they charge are very expensive – often 5% to 6% more than you can get by using an Online Payment Provider.
So it is important next time you are looking to send money abroad that you Compare the Exchange Rates of your bank to our recommended BER FinTech partners.
How to Compare Travel Money Rates and Fees
In this section we look at how you can pay fewer fees and avoid common traps when you’re buying Travel Money.
The fees & costs for buying foreign cash comes in three forms:
- Minimum charges – which can be expensive if you’re only exchanging small amounts of money.
- Flat fees – which can actually be good value because they don’t change, even if you’re exchanging large sums of money.
- Handling fees – which are what the currency seller charges for its exchange services.
Some currency sellers advertise commission-free foreign exchange, but while this may sound like a good deal, be aware they could be making up for the loss of commission with higher exchange rates. As a result, this could actually be more expensive than if you’d just paid commission.
If you plan ahead by a few days and order your travel money online you can get upto 10% better exchange rates probably end up extending your travel budget by a couple of precious days.
Our travel money rate & fee calculator is programmed with these various fee models to make it easy for you to find the best deal for your particular foreign exchange needs.
Get a Better FX Deal when you Send and Spend Abroad.
Key Takeaways from the ACCC inquiry into currency conversion services. BestExchangeRates referenced among comparison sites playing an important role in customer awareness of the excessive currency margins charged by banks.
Last update: 1 Oct, 2019
Both the Australian dollar and British pound sterling have had a hard time of late caught between the rock of the China/US trade war and the Brexit hard place.
Last update: 27 Aug, 2019
Enthusiasts would have us believe that Facebook’s own digital currency, Libra, will instantly revolutionize the remittance industry upon its release in 2020 — except it won’t. A harsher reality awaits, with conversion costs, capital gains taxes and a lack of Libra-priced goods all likely to limit its appeal.
Last update: 6 Jul, 2019