Currency Conversion

Comments

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  greenpossum on 05/05/2012 - 20:03 ¶

  What is it for, travel, sending to relis, or the sort of sum associated with buying a house? If the latter, shop around financial institutions for the best bank draft rate.

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    DeWalt on 05/05/2012 - 20:05 ¶

    Its to purchase property. I've spoken to HSBC because they will let me setup a local (Malaysian) bank account - but they haven't told me what the rate used for currency conversion is.

    Any recommendations/tips for a newbie?

    DeWalt

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      greenpossum on 05/05/2012 - 20:15 ¶

      A Telegraphic Transfer (TT, but anachronistic, since it's really Internet Transfer these days) incurs a flat fee of around $25-40, and the exchange rate varies daily. So you would have to call up just before you want to do the transfer.

      However because your funds are in a local bank, it might be best to transfer from there, instead of setting up an account with the bank with the best rate first. In that case you might just wait for a day with good rate. That is, if you can wait.

      The receiving bank will also take a cut. You can opt to transfer AUD and the receiving bank will convert, or convert here and transfer MYR. I don't know how much you lose in this. So maybe same bank for both might be a good idea.

      I think there is some paperwork to fill for more than a certain amount, it's transaction tracking by the govt. The bank can advise.

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      +1 vote

      stemcell on 05/05/2012 - 20:19 ¶

      We have been in a similar situation and after finding all the banks to be rather expensive, even HSBC who are not the world bank they like to imply we found www.ozforex.com.au who charge a single fee and you can watch the exchange rate and when your happy transfer online. We found them being highly rated in various forums and moved a large amount and all went well….highly recommended.

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        DeWalt on 06/05/2012 - 10:49 ¶

        Hi Stemcell,

        What issues did you find with HSBC?

        HSBC said they will establish a Malaysian account in MYR for me - without any hoops to jump through. They also said they'd provide me with a Malaysian financial manager from Malaysia to help with management of the account if I needed it. On the surface, that sounds good.

        DeWalt

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      777 on 05/05/2012 - 22:27 ¶

      Ask them to fix the rate for a fee
      Some banks will do it

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  greenpossum on 06/05/2012 - 00:14 ¶

  Also don't go by the published rates. There's usually a footnote for large sums saying: Rates on Application. This means you. Bargain hard and don't hesitate to go to another financial institution to get a better rate since a little difference can mean hundreds or thousands of dollars.

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  DeWalt on 06/05/2012 - 10:46 ¶

  Thanks for the feedback fellow OzBargainers. I had a look at Travelex (just for laughs) who wanted 6.6% … when you're talking 100s of thousands, that's a lot of money…

  I will certainly follow up on the advice from these posts - thanks guys.

  What's difficult is everyone in the financial industry says what greenpossum says … "the rate varies daily". But in reality, the fee (rather than the rate) doesn't vary daily. The rate is either a fixed fee plus % markup, a % markup or a fixed fee.

  When I get a straight answer from HSBC, I will post the answer.

  FYI - I want the local Malaysian bank account so that I can manage local finance (eg. repairs, legal fees for the transfer, spending money when in Malaysia etc) without having to pay conversion fees constantly. I want to transfer one lot of money and then maintain a presence in Malaysia. The only simple way i've found to do this is via HSBC.

  DeWalt

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    greenpossum on 06/05/2012 - 11:17 ¶

    The exchange rate varies daily according to the market. However they may be willing to freeze the rate, but make sure you are not disadvantaged by a rising rate.

    The fee is for the handling and is largely independent of the transfer. It could be a flat fee, a sliding scale or a percentage of the transfer, see what works out cheapest for you.

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      DeWalt on 06/05/2012 - 13:03 ¶

      Thanks greenpossum.
      I've got lots of leads to chase up!!

      DeWalt

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        DeWalt on 15/05/2012 - 18:10 ¶

        Ok, here's the update.
        I finally found out that HSBC's regular rate is 100 basis points for smaller transactions. They haven't told me what they can do for transfers over $50,000 - but they said they should be able to do better than that.

        I will compare HSBC's with ozforex's rate :)

        DeWalt

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  coolsteps on 15/05/2012 - 16:58 ¶

  try amex ip and citibank gold, but always get the best xrate. also note that the receiving bank might take a cut so contact them first to find out

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    DeWalt on 15/05/2012 - 18:13 ¶

    Thanks Coolsteps. Have you used Amex or CitiBank for currency conversion before? Do you have a rate to compare to?

    I believe the index used for currency conversion by HSBC is Bloomberg, but the spread (buy v/s sell rate) can vary..

    DeWalt

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  coolsteps on 15/05/2012 - 19:00 ¶

  amex xrate was good for the 5 pounds i sent and the receiving uk bank didnt charge me any fees and i got 10k of bonus mr points so it was a win win, but you need to be an amex customer and setup an account takes a while. citibank offer free transfers to over 25 country citibank accounts overseas (Malaysia).Free global transfers to Citibank accounts overseas3 with just a few clicks of Citibank Online.
  More than 25 participating Citibank countries worldwide. but i think their rates are bad unless you are a citigold cleint you could negoaite with them a good rate. i hear that westpac have a good rate if you a lucky to have access to their foreign exchange dept. for large amounts A Telegraphic Transfer is the way to go but shop around and find out about all the fees at both ends and make sure you get the best rate. for more info see http://www.citibank.com.au/aus/international_banking/transfe... and http://www.australianfrequentflyer.com.au/community/american...