Ben Todd | Apr 16, 2017 | 3
How To Get The Best Exchange Rate While Abroad…or At Home
There are three ways that you may get the best exchange rate. One of them simply involves shopping around. One of them includes playing/dallying with an online marketplace, and the other includes waiting for the right time to buy. Getting the best exchange rate may not always be an option. In many cases, if you need the money relativity soon, then your best option is to shop around until you find the best rate for the amount you wish to convert.
Shopping Around For the Best Rate
The amount of money you are exchanging will determine which company is the cheapest for you. One company may offer you the best deal if you are only changing $300, and another may offer the best deal if you are changing $12,000. Most currency exchange companies will have a rate checker on the homepage of their website.
Check your rates, but make sure you do your calculations to see how much you are really paying. If a company says it has no fees and they use the most current market exchange rate, then ask yourself how that company is making money. They have to be making money some way, so do they have hidden fees, or do they give a poor quality exchange rate?
Use a Peer-to-Peer Currency Market
You’ll see us talk a lot about a peer-to-peer currency market. This is a new type of money transfer/currency conversion that uses technical voodoo to basically give you the inter-bank rate or better. This is the currency exchange rate that banks give each other — something that you, as a regular user, will never get from a bank or currency exchange. These services are revolutionizing the money transfer game and are, in our opinion, the best way to convert currency — if you are willing to wait a few days for the transfer and conversion to happen.
Transferwise Currency Conversion – Check What You Get
Dallying With An Online Marketplace
You are given two choices, you either change your money at the current rate, or you put your money onto the online market and wait. If you put your money on the market, you have to set an exchange rate. When that exchange rate becomes available, your trade is made and you get your exchange rate.
It is not like waiting for the exchange rate to change. You are waiting for action from the other users. For example, if you wish to turn your dollars into Euros, and somebody floods the market with Euros, then they will probably be willing to trade for a lower rate that suits you.
Buying Currency At The Right Time
Use an online tool that emails you an exchange rate when it changes, or that emails you an exchange rate every day. You can find them on many exchange websites. I use the Transferwise one because you do not have to sign up to use it. Have the rate emailed to you every day and when the rate hits the amount you want, then you spend your money and convert your cash.
You then keep your converted currency in a savings account until you are ready to use it. Most people do not like the idea of leaving money laying around doing nothing, but if you bought your converted currency for a cheap rate, then it may actually earn you money while it sits there, since you may sell it when the rate changes again.
Conclusion – Getting The Best Exchange Rate Depends On Your Situation
If you are short on time, such as if you only have a few days, then shop around online for the best rate. If you are willing to play with an online market, then spend a few weeks waiting for the right price to come along. If you have plenty of time and plenty of money to invest, then making big exchanges when the time is right is the best option for you. That is how you get the best exchange rate.