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Currency Exchange Tips
Which of the Banks in Burnaby Offers the Best Exchange Rate?
Living in Burnaby, it’s a certainty that all five major Canadian banks will have branches located close to you. If you already bank with one of the major Canadian banks (BMO, CIBC, RBC, Scotiabank, TD), you can see the exchange rate spread charged by your bank in the earlier chart. You’ll notice that your bank charges a very similar if not equal spread to the other major Canadian banks, with the exception of CIBC.
If need to make frequent or large currency transactions, then you should consider aligning yourself with a bank best able to facilitate this. In Canada, HSBC offers the best exchange rates, so they would be the logical choice. However, if you aren’t adamant about conducting your exchange transactions at your bank, you can save a great deal of money by switching the use of a foreign exchange provider, such as Knightsbridge Foreign Exchange.
Places to Exchange Currency
If you’re located in Burnaby, you’ll have a number of options for exchanging currency. Some places you use to conduct your currency exchange transaction include:
Doing your currency exchange transaction at the airport is relatively commonplace, especially for smaller transaction sizes. Oftentimes individuals forget to exchange currency beforehand, and decide to use the services at the airport at the last minute. This can be convenient if you did not think to plan in advance, but if you can avoid using the airport, you should. Airport rent is expensive, and these overhead costs are built into their exchange rates. This can be costly.
Similar to the airport, mall kiosks have high overhead costs as mall rent is expensive. These kiosks are more commonly used by foreign visitors, so if possible they should be avoided.
As you’re already aware, you can exchange currency at your bank. For small amounts of currency, using your local banking provider is an excellent choice. The service will be convenient and familiar, with most of the desired currencies in stock. More exotic currencies can always be ordered.
Electronic Currency Exchange Providers
If you’re looking to exchange a large sum of money, you should look to use an electronic foreign currency exchange provider, such as Knightsbridge Foreign Exchange. If you are exchanging a smaller amount of currency, this option will likely not be suitable for you.
Why can I not get the exchange rate I see on Google?
When you simply type in USD/CAD on into a search engine such as Google, or look at a website specializing in finance, you will see the mid-market exchange rate. The reason you will be unable to make exchanges at that rate is because there are back-end costs associated with currency exchange that are built into your exchange rate.
By transacting with a foreign exchange provider such as Knightsbridge Foreign Exchange, you are able to get a rate closer to the mid-market exchange rate, as they can leverage economies of scale to get you the best rate.
Why do banks charge so much for exchange services?
Banks have more expensive exchange rates for a number of reasons. Firstly, they are very large, and therefore have significant market leverage. Many people are more than happy to pay the exchange rates charged by the bank, so they can continue to charge those rates. Secondly, banks build in a markup to their exchange rates to help cover back-end expenses, such as book-keeping fees and the wages of the employees who help facilitate your transaction.
How do I ensure I’m getting a better rate than the bank?
To ensure you are getting a better rate than your bank, you will have to do a comparison. Firstly, call up your foreign exchange provider and ask them to quote you an exchange rate. Note the difference between the quoted exchange rate and the mid-market rate, and write it down. Next call the bank, and get a similar quote. Note the difference between the quoted rate and the mid-market rate. If your foreign exchange provider’s quote is closer to the mid-market rate, then they are cheaper than your bank!
(Note: Exchange rates fluctuate in real time. You’re exchange rate will already be invalid by the time you hang up the phone, which is why you should make comparisons based on the spread. This enables you to make comparisons ceteris paribus).
Get better exchange rates than the banks, visit KnightsbridgeFX.com or call 1-877-355-5239.