Getting the Best Rates and Avoiding Fees
Comparing exchange rates
In most cases, non-bank providers offer significantly better exchange rates than the banks. There are some traps when comparing exchange rates that are outlined in the next section. The key point is to compare rates at the same time and ensure you are getting a genuine quote.
The Interbank rate is the wholesale rate. No customer will receive this rate but your aim is to get as close to that rate as possible when you book your exchange rate. The exchange rate that is applicable to you is the customer rate. If possible, negotiate a fixed margin or number of 'points' away from the interbank rate. The difference between these two rates, the margin, is how forex providers make their money.
Many providers display Inter-bank rates on their websites without making it clear that these are not their customer rates. You should not use posted website rates for comparison purposes unless the providers are willing to be bound by them.
Fees
Business and private customers can be charged two fees when they transfer funds. The first, a transfer fee, can be charged by the forex provider or bank at the beginning of the transfer. The second is a receiving bank fee which can be deducted when the funds arrive at the destination account. Savings on the exchange rate usually far outweigh the cost of fees so it's important to look at both the fees and the exchange rate combination when transferring funds.
OzForex
OzForex, a subsidiary of Macquarie Bank, offers fantastic exchange rates and unparalleled service if you are looking to transfer money. Real time online rate booking, forward contracts, limit orders and 24 hour service, are just some of the features that make OzForex the market leader in international money transfers. Call 1300 300 424 to speak to a dealer now.
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