5 tips for finding best exchange rates
5 tips and the best exchange rate IN !
Getting best exchange rate is the first thing on any ones mind when sending money to friends or family abroad. Better the rate larger the sum you care about gets. But how can you get higher exchange rate while sending money overseas? You don’t need to be pro to get the best rate, you just need my 5 tips.
Before we get to finding best exchange rate let’s discuss what is exchange rate and how it is decided.
What is an “Exchange Rate“?
In simple terms exchange rate is a price of one currency in another currency. In other terms the price at which you exchanged the currency for the other one is known as exchange rate.
How is exchange rate decided?
There are multiple factors driving currency rates like market situation, foreign policies, country’s financial stability etc, but like any other commodity core of it is supply and demand. Higher the demand and short the supply, higher the value of a currency. When you exchange currency you are basically trading your currency for the other one. When there is good demand for the currency you are selling, higher the rate you get.
How to get best exchange Rate?
Getting best rates is not a rocket science anymore. You need to know what to look for when you are trading your currency. Without further delay here are my 5 tips to get best bang buck,
1. Use online tools to compare exchange rates
There are few good exchange rate comparison sites available which do the hard work finding and comparing exchange rates offered by vendors in the market. My recommendation is to use ExchangeRateIQ.com who provide the most accurate and reliable rate comparison offered by vendors along with other key details you must consider while transferring money. Just enter your search criteria and ExchangeRateIQ.com will list the best available rate top of the all available offers.
2. Find exchanges who offer the transfer with higher rate but no fees
Yes, there are many exchanges out there who charge nothing for foreign currency exchange. Why do they offer you free transfer? e.g. Transfast, Remit Money, Remitly, Placid Many of them make profit by pooling money and selling currency when market is favorable. There are some vendors who charge fees per transfer but offer slightly higher exchange rate.
3. Always consider realized exchange rate
Realized exchange rate is a true rate you get after paying fees and other charges for transfer. Fees applied could be money transfer fees by exchange, cash advance fee charged by credit card, wire transfer fee etc. So before you decide to transfer make sure you consider all charges and find the exchange who offer you the best rate with your transfer criteria.
Let me give you an example. Consider you are transferring $2000 from USA to India from your bank account and below are two results you see,
As you may notice offered exchange rate is higher by Vendor 2, 69.45 INR / USD but as Vendor 2 is charging fee of $4.99 realized exchange rate is lower than Vendor 1. In this example you are better off exchanging money with Vendor 1.
4. Lock in your exchange rate
Look for vendor who is locking in the exchange rate until transaction is completed. Dont get caught in market fluctuation and loose money. Once again ExchangeRateIQ.com make is simple for you to pick by showing the fixed or locked in rate.
5. Send one large transfer rather than several smaller transfers
Some of us like transfer to be scheduled or periodic. If you transfer money periodically try cutting down the frequency and send large amount of money with each transfer. E.g. If you send $2000 per month try sending $4000 every other month. Larger the sum better the rate you get. Many money transfer companies offer higher exchange rates and lower fees for large money transfers. Also there are exchanges like Venstar Exchange who only offer large sum transfers and with whom one can negotiate for the rate by calling them.
Even though large transfers provide better rates you might have to consider tax regulations and foreign transfer policies before making a large transfer.
Beside exchange rate there are other factors you should consider when sending money oversees such as how soon money will be delivered? how your beneficiary will get the money? is money transfer for saving or payments? Is your final option is the best option for sending money? There are many things need to think of. Look for tips on these in upcoming articles.