Currency exchange doesn't have to be costly. Follow these five tips to help you save money.
February 7, 2022 — 3 min read
If you've ever travelled abroad, sent a money transfer to family overseas, or made international business payments, you know it can be a pain to exchange currency. Searching banks, online exchange providers, or the streets of an unknown city for the best rates can be time consuming and costly. If you don't pay attention, foreign exchange costs can add up.
Here are five tips to help you save on currency exchange.
Planning ahead may take time, but it's worth it to foresee any possible roadblocks in saving money. First, find out what the current mid-market exchange rate is with our Xe Currency Converter or Xe App. Next, compare the rates and fees offered by banks, exchange cambios, and online providers. Once you find the best deal, exchange your funds.
Some foreign exchange costs can be transparent and others can be hidden, so it is important to understand what you are paying for. Just like every other company, foreign exchange providers need to make a profit to stay in business. The following are three ways in which providers make money:
Currency providers may charge a commission, flat fee, handling fee, or minimum charge.
They may include a spread in exchange rates by buying currencies at one rate and selling them at another – with a margin included.
FX providers may also charge transfer fees for wire transfers and other delivery methods.
Download the Xe App, on the App Store or Google Play, and compare your provider's price to the mid-market rate.
Since every currency exchange transaction has associated costs, fewer transactions can sometimes result in lower costs. Depending on the type of transaction, you may save money by consolidating several money transfers into one large transaction. Some foreign exchange providers may even offer better rates, or waive commission fees for currency exchanges over a certain amount.
Every country has its fair share of counterfeit currency – some more than others. To avoid fakes, try to become familiar with the look and feel of the currency. Take note of watermarks and other security features. Although it may not be possible to spot a high-level counterfeit, keeping an eye out for these details can make spotting a fake easier. Try to use trusted foreign exchange providers and established currency exchange companies.
If you're moving abroad, studying internationally, or plan to stay in a foreign country for a long period of time, consider sending money and banking overseas. Opening up a local bank account can minimize fees and help keep your money secure. It also makes consolidating your currency transactions much easier, helping mitigate the risk of currency fluctuations.
We hope these 5 tips for currency exchange were helpful. Share this blog with others so they can also make better decisions with their next currency exchange.