While currency exchange rates are super important to our economy, they affect the value of money you send or receive. This is why you should look into getting the best exchange rates whenever you need to make international transactions.

So whether you’re traveling abroad or simply looking to swap money you just received, here are five tips to ensure you get the best rates. 

How Do Exchange Rates Work?

Most people think about buying low and selling high when they think about exchange rates - understandably so. 

However, beyond how it favors you as an individual, exchange rates are a way to calculate the value of your national currency when compared to its counterparts in other countries. This affects the prices of imported goods, government loans, services, and much more.

If you’ve noticed, there are central bank rates known as the official exchange rates and others. These other rates vary amongst money changers. Unfortunately, at the moment, bank rates continue to differ from other rates because they all buy at different rates. 

Money changers buy and sell at higher rates. This is because they’d want to make a commission and recoup how much they spent purchasing these foreign currencies. Since getting foreign currencies at the bank aren’t so accessible, it’s up to you to find the best exchange rates available.

How to Get the Best Exchange Rates

So do you need to exchange foreign currencies, make a purchase or sell your foreign currency? We’ve got you covered. Here’s how to get the best exchange rates available in the market;

1. Always stay on top of the market

How do you even know if you’re about to make a loss or profit? By knowing when there’s any change in the parallel market. Prices will constantly fluctuate, so you’d have to know what the prices are to see when you have an advantage.

When prices are going up, you don’t want to risk buying at the last minute and losing your funds when it comes down. So we recommend monitoring what the current rates are at least every week.

2. Compare the best rates

When using foreign exchange services, you shouldn’t just choose the first one that comes to mind. In addition to reviewing customer service and user experience, you should also compare the exchange rates across your options. 

With this, you can figure out what the average rates are and which offers the best. If you’re not sure where to start, Grey offers one of the best currency exchange rates in the market. There are also multiple currencies you can swap on the app. 

There’s also the option of currency exchange calculators. You can use these across different websites to weigh your options.

3. Don’t use your debit cards at foreign ATMs

If you’re paying for a transaction with your debit card, you’d have to remit either withdrawals or transaction fees. But for an international transaction, you’d pay for the currency exchange - which isn’t favorable, ATM fees at the foreign ATM, and a fee from your bank for using your card at a foreign ATM. 

With all these charges, the cost is almost three times the amount you would ordinarily spend. So before using your card at a foreign bank, reevaluate your need. 

If it’s essential, speak to a bank representative to know how much you’d be charged for an international transaction. 

This way, you can review your transaction history for any inconsistencies.

4. Buy items in the local currency

This is especially handy if you’re traveling as a tourist. Often, stores would offer to receive the equivalent of what you’d like to pay in either Dollars or Euros. Seems reasonable, right? 

The thing is - the equivalent will always be a hiked version of the exchange rate. It might not look like a lot at first, but it can run into a considerable loss when accumulated. So, instead, make a bulk exchange at the bank or money changer and pay in the local currency.

5. Be wary when there are no currency exchange fees

Many money changers, shop owners, and exchange providers might try to convince you that there are no additional fees. While this might seem like a great bargain, think about it. How do they then earn a living from it? It’s simple - by hiking up the already unfavorable exchange rates. 

We recommend opting for exchange services that offer transparent rates and prices. With this, you know that no hidden fees or charges will spring up after your transaction. 

Wrapping up

Getting the best market exchange rates requires careful observation, staying up to date with price changes, and sticking to local payments. Are you traveling soon? Or perhaps you’re just looking to swap money in a different currency, we recommend using Grey. 

With Grey, you can receive, send or swap foreign currencies and withdraw to your local bank account. All at the best market rates. Get started here.

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