Getting the best foreign exchange rates for hard currency transactions may seem a simple enough task to handle. You'd find out however that it can take a great deal of your time. Of course you can always go to your bank or to the nearest money changer near you but he question is "will you be getting the best foreign exchange rates" every time? Remember a few cents difference can mean a big difference when making volume transactions.
You may have to shop around, ask around, and even surf around a lot before you can really get the best foreign exchange rate available. Don't forget that you always have the option to forgo of the task if and when the current rates of exchange are too high (meaning if the rates are higher than when you bought the currency). If the rates are too high and you are not much in a hurry, then you can forgo the task until better rates are available. This is where the exchange rate calculator comes handy because with it, you can check on the rates every now and then.
Here are some tips by Yee Kok Siong a forex investor on how to get it for hard currency transactions:
- Get the latest interbank rates from your bank or from any online bank.
- Using an online exchange rate calculator make a conversion and compare it with the inter-bank rates. There should not be much difference between the two but always choose the one with best foreign exchange rate for your reference rate.
- Using this as your base of reference, get quotations from various money changers. Do not however expect to get the same rate from money changers. The interbank rates and spot market rates are for wholesale transactions (usually in millions of dollars) while the money changer rates are retail transactions. Besides, money changers would normally pad up the rate with a small amount of profit to cover their operational costs so they will give you different quotations. Use the interbank rate for reference only but make sure the difference it has with the money changer's quotation should be in the range of 5% to 10% only.
- It is not best to make hard currency transactions online unless it is with a banking institution. But if you will be doing an online transaction with money changers make sure you will be dealing with a reputable firm. You can always check its background online or even ask around from friends. Make sure also that the transfer process of the funds are secured.
- There is also a need for you to be aware of the current levels of the exchange rates compared to their rates in the past. Currency exchange rates fluctuate rather rapidly. What may be high today may be lower a day or two from now. So, unless you really need the cash, postpone the transaction to some other more opportune time in the future when exchange rate levels are in your favor.