Bank Profit Margins on Currency Exchange Rates

Jul 17, 2003 6 Replies
I

I am in the position of having to change US Dollars into UK pounds on a regular basis and have been surprised at the difference in exchange rates provided by my bank from the published rates.



Usually there is a difference of over 3 cents from the rate I get ( Royal Bank of Scotland, "commercial rate") compared to what I see on say the BBC website as the exchange rate.



Now obviously these rates are presumably for transfers in the millions rather than thousands, but I would have expected to get closer to them than



3 - 3.5 cents.

Anyone know if this difference is typical, or if any other UK Name banks will do a better deal on a regular basis?



My ideal would be someone who can offer the whole thing online, with dollar and sterling accounts and change between them at will, at a competitive rate.



If anyone knows any way of comparing the rates available from different banks, or can suggest any solutions I'd appreciate it.


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S

When I looked into it when we lived in the UK the midland bank (HSBC) only offered the commercial rate for accounts with a balance of

100,000+ (not sure if that was GBP or CDN$) Needless to say the banks will bend you forward whatever the transaction. This is why the Europeans have all gone the way of the Euro despite it's many flaws. You could try a US bank.. but as with any of these things caveat emptor.
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D

Try these

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- let me know how they quote. Daytona

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F

During pre-euro era currency exchange offices had the thightest spreads because it was their only business. You don't have any of those there in UK?

And now the commission for international money transfer between banks inside Euroland is at maximum the same as for domestic, by EU law.

Nobody seems to remember anymore George Soros.

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N

Sorry - A quick caveat - you need to have an average monthly balance of $3,000 between the two accounts otherwise they charge you $20 per month. So may not be worthwhile doing unless you have some spare cash lying around.

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I

Thanks for that. I had actually found the citibank website yesterday and noticed that the facilities they offered online were a good match for what I wanted. So your post saying they offer good value as well seems to seal things. I'm going to give them a try for the next couple of months.

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I

Interesting looking web site, but my cautious nature means I prefer to stick with the more well known banks.

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