If you are heading overseas and want to buy your foreign currency from a bank, the good news is, nearly every bank in Australia offers it as a service.
The bad news? Well it's a pretty bad service.
Regardless of the bank, amount you need or currency you are buying, it can be very expensive and incredibly slow.
If you are still keen to use a bank despite all this, here is a run down on what each bank will offer you.
At the start of 2020, 10 Australian banks offered foreign currency exchange services. Since then, a number of them have suspended or removed the service. Here are the banks that are left:
- Commonwealth Bank of Australia (CBA)
- Bank of Queensland (BoQ)
- Bendigo and Adelaide Bank
- Bank Australia
NAB has suspended its Foreign Currency Cash services due to the international travel ban. Westpac no longer sells currency either online or in branch. Commonwealth has suspended its online ordering service. You can still exchange currency in branch. HSBC, Bankwest and St George Bank shut their service.
Which banks have the best exchange rate?
Of all the banks in Australia that we monitor, ANZ consistently has the best bank exchange rates for the major currencies like US dollars and euros. ANZ is also the only bank that has its own foreign exchange department. The rest of the banks in Australia used to use Travelex to actually provide the currency to their customers.
Compare exchange rates
What fees do banks charge for foreign currency exchange?
Every bank charges a different fee to buy or sell foreign currency in cash depending on how much you are buying, how you are paying for it and what services you need.
ANZ charge 1% of the AUD equivalent value for each currency purchased, with a minimum charge of AUD $8 per currency. It's important to know that this fee is the same regardless of if you order the currency online or in one of their dedicated ANZ foreign exchange centres. If you are an ANZ customer, they will waive this fee.
CBA currency exchange charge 1% of the order value with a minimum of $10.
Card processing fees
Most of of the banks use Travelex to provide the currency to you which means you don't have to be a customer to use their services. It also means you can use a credit or debt card. Again, these card processing fees vary between banks, but are usually between 1 and 2%. This may not seem like that much, but it can really add up if you are buying more than a few hundred dollars worth of currency.
Exchange rate margins
The 'hidden' exchange rate margin is what they charge by giving you a less favourable exchange rate.
For example, if xe.com or google currency converter is showing a AUD/USD exchange rate of 0.7800, but the bank is selling it for 0.7600 - the difference between 0.7800 and 0.7600 is their exchange rate margin.
The worst part about this fee is that it's really hard to calculate it.
Great tips on how to exchange currency
- Avoid doing it at the airport. The exchange rates are terrible and the fees are very high. You can always use a card overseas or buy your foreign currency when you head overseas
- If you are using your bank, check their exchange rate, work out their fees and allow plenty of time
- Money changers can be good option. The rates in the CBD are more competitive and they rarely charge fees. Make sure you bring some ID.
- It can be cheaper to buy your currency overseas. Places like Bali, Thailand and Singapore offer much better currency exchange rates than in Australia
- Buying currency online can be cheaper and faster than using a money changer store or a bank