Currency Exchange Tips

Large amount? Don’t use banks. As mentioned before, banks have large mark-up fees that you really don’t need to be paying and can definitely avoid if you’re willing to take a little extra time to see what else is out there for you. Generally with amounts of US$5,000 or greater, you can save 2% or more at independent foreign exchange providers such as Knightsbridge FX.

Negotiate. If you are inclined to use a bank there is sometimes room for negotiation especially if you are exchanging a large sum of money. Don’t be afraid to try and ask for a better rate. You may surprise yourself!

Currency Exchange for First Time Users

At one point or another, most people will have to exchange currency whether it is to go on vacation or to pay off some bills you owe in another country. Besides going to the bank and asking how to do it, it can be confusing to teach yourself. We’ve outlined some general things to look out for that should help with your first currency exchange experience.

Registration

Beyond initial inquiries, the first step in your interaction with a bank or foreign exchange provider should be registration. As you probably know, financial services companies in Canada are monitored and regulated by the Government of Canada and regulatory bodies such as FINTRAC. Regulations require that financial services companies keep track of who they conduct business with and registration is usually the easiest way to do so.

Do not use any company that does not require you to validate your identity.

A last step or the next step to the registration process is to validate your identity. Don’t be surprised if they require you to present a passport or driver’s license or anything of that nature. As mentioned above laws and regulations require financial services companies to validate who you are to ensure any business conducted is not suspicious in behavior or intent.

Choosing a company

With so many companies that provide foreign exchange services out there, it can be difficult to choose. If you have friends or relatives that have exchanged currency before it may be wise to ask them. However, they may not even know the best solution out there. As a rule of thumb, look out for any media articles that give credibility to the company. You can also check to see if they are registered with the Better Business Bureau (BBB) which will show that the company is reputable and in compliance with the law. As a last resort, you can always visit the company or give them a call and look out for anything suspicious. The internet is a very valuable resource in discovering the best and worst companies out there and you should use that to your advantage.

Timing

Try to exchange your money a day in advance of when you actually need it. This follows the same logic as to why you may get some nice clothes dry cleaned a day or a week in advance of fancy events. The reason is to avoid any last minute unforeseen circumstances that may prevent you from meeting your needs.

When is the Best/Worst Time to Exchange Money?

Asking when the best and worst time to exchange money is no different than asking what the weather will be like in a year from now, nobody knows. One rule of thumb we can follow though is to never exchange money on the weekends. Banks and foreign exchange providers face foreign exchange risk and liquidity risk for holding currencies over a weekend. As a result, they will charge a hire exchange rate than what is usually expected. In general, it’s good to keep an eye on exchange rates and the factors that affect exchange rates so you can at least get a general idea as to where exchange rates are headed which will help your chances of transacting at a favourable rate.

How to Ensure You Are Getting a Better Exchange Rate Than Your Bank?

Don’t let the person on the phone or at the counter convince you that you can’t get a better rate without first seeing what’s out there for you and where current spot exchange rates are. Often there is a better deal out there if you’re willing to look. To compare all you have to do is ask for a quote on an amount, $1,000 for example, at the places you want to compare and you have all the numbers necessary to calculate your potential cost savings if any.

How to do Physical Cash Currency Exchange at Each Bank

Physical cash exchange is easy but may not be worth it. There are kiosks in malls, independent foreign exchange retailers, and even banks that do physical cash exchange, however, this will be much more expensive and time consuming than an electronic transfer. If you must do so, simply talk to the person at the counter and they will walk you through the necessary steps to get you well on your way to making an exchange.

Physical Cash Currency Exchange Requirements

Physical cash exchanges will also require registration, validation of identity, and possibly some other steps such as getting a bank draft or void cheque as further proof. Again if possible, try and do an electronic transfer and/or in higher denominations as this will save you time and money

Travel

How to Save on Foreign Exchange Rates When Travelling?

Exchanging money while travelling can be intimidating, especially if you’re unfamiliar with your surroundings or the landscape. Asking a small business or something from around the area can help you in determining the best foreign exchange provider in the area. In addition, sometimes businesses will accept the currency you have especially if it’s U.S. for a small fee or no fee at all. The best chances of this are at businesses where you plan to make a purchase that have stores worldwide such as some kind of luxury store. Another option would be to use your credit card however this option can be expensive due to high mark-up fees. Generally, if you have to choose a foreign exchange provider while travelling, avoid those with high markup fees above 3% or try negotiating.

Get better exchange rates than the banks, visit KnightsbridgeFX.com or call 1.877.355.5239.