How to get the most/best rate from a foreign currency gift
September 25, 2016 6:29 PM   Subscribe

I was recently gifted an early inheritance from a great aunt who lives abroad. She sent over Swiss francs with a travelling family member and now I have to exchange it, but every time I look into the rates and fees it seems like I will lose a significant amount. What is the best way to ensure I get a decent exchange rate?

I am in Australia. It seems that most of the information available online (rates etc) is geared towards buying money to take with you when you travel, so I am having a hard time even finding the info I need about selling foreign currency. Plus, with everything happening online, having the actual cash seems like it's a rarity these days. I don't have a time (or do I need to make a whole day available?) to drive to every foreign exchange store and compare rates.

Google tells me that the exchange rate will give me $X Aussie dollars. My bank tells me they will give me $1000 less. I absolutely understand there are fees and of course you get a lower rate wherever you go, but to lose so much makes me wonder if there are any other options.

I would like to share this money with my daughter and save it for a rainy day so I want to ensure I get the most I can. It's not a huge amount to begin with, so every dollar counts.

Does anyone have any ideas, or recommendations, about how to exchange this money for the best rate?
posted by Youremyworld to Work & Money (10 answers total) 1 user marked this as a favorite
posted by humboldt32 at 6:44 PM on September 25, 2016

You will probably get a better rate from a dedicated currency exchange place than from a bank.

Currency exchange places earn their rent and salaries through either 1) a "spread" between the rates at which they'll buy and sell a given currency and/or 2) a flat fee per transaction. I suggest looking up "currency exchange" on Google Maps and then phoning the places to ask them their rates and fee structure. The lowest spread I have seen -- between U.S. dollars and Canadian, in Ottawa (national capital, population ~1 million) -- has been about 2 or 3 percent. If you have a large amount to exchange, you may be better off with a place that charges a low spread plus a flat fee.
posted by heatherlogan at 6:50 PM on September 25, 2016 [1 favorite]

You realise that the rate to translate cash is always going to be worse than the rate for transfers, which is likely what Google gave you? Whilst it may have seemed practical by sending cash your aunt picked the least advantageous option.
posted by koahiatamadl at 8:49 PM on September 25, 2016 [2 favorites]

We've had good results with They're a peer-to-peer broker instead of a bank, for us in Canada they charge a 1.3% fee, which is a lot better than the 2 ~ 3% spreads you'll get from a bank or dedicated exchange. You do need to have the funds available for an electronic exchange, though. So for the Swiss Francs, you'd need to open a Swiss account, unfortunately, which might be more trouble than it's worth.
posted by cfraenkel at 9:12 PM on September 25, 2016 [1 favorite]

I've had luck with the exchange rate given by XETrade, which is a website I've used a number of times in the past. However to my knowledge it is only set up to transfer from one bank account (in one currency) to another bank account (in another currency). There are some other similar good sites online, but I don't know whether or how any of them would work with cash. Any chance of returning the cash to her and asking her to transfer it electronically via one of those sites?
posted by ClaireBear at 9:38 PM on September 25, 2016

Thank you for your replies. As you have all noted, having the cash is not great, but my great aunt is in her late 80s and I do not think she understands electronic transferring, plus she would be deeply offended if I tried to suggest she take it back and transfer it another way.

I looked into all your online suggestions, but none of them offer a way to get the cash to them. I guess it's the ring around on a day when the rate looks good. I will just have to accept the fees and be grateful for the gift :)

Thanks everyone.
posted by Youremyworld at 10:02 PM on September 25, 2016

The other way of course is to take the gamble that the value of the AUD will fall against the CHF and you will get more money if you exchange it some time in the future. Could be an option if you don't need/want it now, but there is obviously the risk that the value could go the other way.
posted by ryanbryan at 11:21 PM on September 25, 2016

Have you any friends visiting Switzerland? Ask around. The very best rate you can get is to sell your currency to someone who would have to buy it at the other end.
posted by Joe in Australia at 2:06 AM on September 26, 2016

You could try a local F/X provider, like AFEX? Maybe give them a call and explain your situation. I know shops like these used to be able to handle personal currency transfers, but we're in a different era now and money movements are more highly regulated and scrutinized. But you're not really moving money overseas so maybe there's a way to get it done locally.
posted by JoeZydeco at 9:25 AM on September 26, 2016

> The very best rate you can get is to sell your currency to someone who would have to buy it at the other end.

What he said. If we're talking about a modest amount of money, the best rate you can get for cash is by selling it at the listed exchange rate to someone who can use it at the other end. That's a win-win - you can't get that rate anywhere else for selling, and they can't get that rate anywhere else for buying, so you both beat the spread.

OTOH, if you're lucky enough to be talking several thousand dollars, you'll have to eat the spread and possibly the taxes. You could try one of the "peer to peer money transfer" groups that match outgoing and incoming transfers (e.g., Midpoint came up in a quick search). This is basically a more formal version of hawala, but you'll need to do your own due diligence on the providers.
posted by RedOrGreen at 12:17 PM on September 26, 2016

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