Converting Euros To Dollars In Canada

by Mike Holman

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As a result of a recent trip, I have a number of euros that I wanted to convert to Canadian dollars. I thought it would be interesting to take a look at different options to convert the money and determine what the different conversion rates are and if it is worthwhile to try to get a lower rate. In my case I only have 460 euros which is about $736 Canadian dollars so this exercise might end up being somewhat academic since I’m not going to put a lot of effort just to save 1%. It might however be beneficial to know how to get better rates in case I want to convert larger amounts in the future.

I’ve decided to investigate two alternatives:

  1. Go to a bank branch and get the money converted.
  2. Go to a proper currency exchange company ie Thomas Cook – this is much less convenient since I’ll probably have to go downtown to accomplish this one.

I phoned my bank and got the spot rates for Euros to Canadian dollars. They will give me 1.5234 Canadian dollars for each euro for a total of $700.76. Interestingly the conversion rate to buy is 1.6602 which implies a 4% fee for this conversion – seems like quite a bit.

Then I called Thomas Cook and got a sell rate of 1.509 which only nets me $694.14 which is $6.62 less than CIBC. This difference isn’t enough to be significant but for larger amounts it could be relevant.

Of course these results are also dependent on all being executed at the same time – the realities of the currency exchange markets could mean that a big currency swing from one day to the next could outweigh the different rates charged.  I ended up going to my local CIBC branch and after waiting in line for 5-10 minutes, I got my $700 loonies!

Does anyone have any other ideas about how to convert money at a good rate?  Is it worth even discussing for smaller (ie less than $5k) amounts?

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{ 28 comments… read them below or add one }

1 TheFinancialBlogger

Hey Mike,
If you have 100K, we can negotiate. Below that amount, your chances to get a good rate are nothing.

One of my client recently convert 20K Euro into CAN money and no preferred rate was offered.

Your best bet is to wait until you think the currency rate is good ;-)

2 Million Dollar Journey

Off topic, but where did you go in Europe?

3 guinness416

I’ve come to the conclusion over time that “spend/donate it all at the airport” is the only way not to get violated (and I’ve tried everything), so in general I just keep them for the next time. l’ll buy them off you if you want.

4 Michael James

Guinness416 hit on my approach. I just don’t bother to convert small amounts of currencies I will likely use again within a few years (US dollars and Euros). I lose on inflation, but save on time and conversion costs. Trading money with family and friends can lower conversion costs as well.

5 Nobleea

Sometimes you get tools posting the money on ebay to sell them. They don’t bother to check the exchange rate. There was a guy selling about 40$ in CAD for 13$ a few months back (guess what country he was from).

Banks some time add an conversion fee on top of their brutal rates.

6 Four Pillars

Well, the euros are already converted and I don’t plan on traveling with the kids again (ever!) so there wasn’t much point in keeping them around.

I guess bottom line is that there aren’t any “great” options for converting small amounts.

Mike

7 Kyle

If we’re talking small amounts, I generally just either spend it at the airport or give it to a homeless person. $50 USD doesn’t mean much to me, but it does to them. In general, I try to only get as much foreign currency as I’m sure I can use. Especially in Europe, there are few places you can’t just use a credit card anyway.

8 Mr. Cheap

I got *screwed* by Thomas Crook years ago exchanging Polish currency in France (they charged me something like a 40% fee, I did the math wrong in my head, and after I figured out how badly I was taken (like 10 minutes later) and went back, they refused to reverse the transaction).

They’re on my lifelong boycott list.

9 Looby

I’m with Guinness, if you won’t need that currency again airport shopping/airline charity is the way to go. Or sell them to a friend who is traveling in the near future.
I keep small piles of Euro, Sterling and US dollars that I know I’ll use in the next 6 months.

10 Four Pillars

We’re talking $700 here so that’s a bit much for airport charity!

11 Shevy

Speaking as someone who traveled extensively with my parents from age 2 to 18 I was more interested by your comment about not planning to travel ever again with your kids than with the question of how to convert your euros.

(Personally, I subscribe to the theory that whichever method I choose will probably end up costing more, in much the same way as whichever line I pick at the grocery store will take longer.)

But travel as a child was the most incredible and personally altering thing I think I’ve ever done (although having children of my own comes very close). Why don’t you want to travel again with the kids?

12 Looby

Fair enough- I could argue that your real issue is that you changed too much money in the first place. Why were you wandering around with almost 500 euro at the end of your trip?
I’m fairly certain debit and credit cards work in Europe too, maybe in future you should plan the best way to access your money out of the country and withdraw as needed, because you will always get dinged on return!
In other words- yes, there are no great options to changing small amounts ;)

13 Four Pillars

Shevy – I found traveling with a 2 year old to be very difficult. At that age I’m pretty certain that he won’t remember anything and if he does it will be the various playgrounds we went to… :)

When I say “never”, I don’t really mean forever – just till the memories of this trip fade… :)

Looby – the money was in a bank account where we traveled so we didn’t convert anything (it was from a relative).

14 Average Joe

Scotiabank now offers a Euro-denominated bank account. Of course, it doesn’t pay any interest so I guess its no better than just stashing the money at home. Was the first Euro dollar bank account I have seen though.

15 Gates VP

I went through this a couple of times in the last 18 months (one trip to Europe and move the US).

Using your local bank seems to be the best deal for “consumer-level” amounts. If you’re an investor planning on trading in the tens of thousands, I’d go elsewhere. (likely via an online brokerage account)

16 sid

You’re always better off at a bank before you leave. I’ve never come across a currency exchange company that didn’t have bad rates and extra fees.

If you have $25k you can try an online brokerage to get the true market rate, though I’m not sure how you would get the euros in cash.

17 Christine

Hey folks,

This is an extremely timely subject. My boyfriend and I are getting our collective finances in order, and he’s trying to figure out what to do with an account he has in France (where he’s from). It’s a large amount – something like 30K – but it’s currently earning squat where is is at the moment, so we’d like to get it invested somewhere.

He’d eventually like to own property in France, like in maybe 10-20 years, so might it be better to keep it in Euros, or to convert it and consolidate it with our investments here? He could potentially invest it through the bank that he’s with there, but as he’s not so investment savvy he’d be basically putting it in their hands and taking their advice. No idea how investments work in France so I’m not much help.

Thanks in advance!!

18 Charles in Vancouver

Custom House / XE (www.xetrade.com) offers Euro-CDN conversion but I am not sure what you would have to arrange. If you had a bank account somewhere in Europe you may be able to set it up to withdraw via wire and deposit in your Canadian account. Or you may be able to initiate a wire transfer from somewhere to Custom House.

My acct is only set up for US/CDN so I am not sure.

19 Shevy

Mike, I was going to comment again about my memories of the travel I did when I was small, but there was so much to say that I wrote a post instead!

This really hit a chord with me.

20 Four Pillars

Christine – 30k is a lot of money. I’m not sure if I would leave the money as euros for that long – it’s a bit of a pain having investments in another country.

Another option is you guys can travel to Europe every year and dip into the euro fund. :)

21 Dan Zrobok

I have an interactive brokers trading account and use the FOREX market to exchange money. Always seems to return a better rate than the canadian banks and the market doesn’t seem to care that it’s only a few grand and not a few million.

22 EmperorCoder

I second Dan on that one. Interactive Brokers simply have the best FOREX spreads of all the canadian brokerage firms and their commissions a very low (something like 0.02%). To withdraw the cash you will need to have a bank account in Europe and wire transfer the money to/from it (easily done via a web form, which I did numerous times). I’m not sure that canadian accounts denominated in euros let you withdraw the actual cash in euros. If they do, that would be even simpler.

Opening an account in Europe might be a problem if you don’t have an address of residence there. Giving the hotel address might work although I never tried.

Oh, and IB also support many other currencies, like USD, british pound, australian dollar, swiss franc, etc. so it might be interesting for people who travel a lot in different countries to setup accounts in each.

23 EmperorCoder

Just found out that HSBC offers USD, Euro, Hong Kong Dollar, Swiss franc, Japanese Yen and British Pound denominated accounts in Canada.

http://www.investmentexecutive.com/client/en/News/DetailNews.asp?Id=45235&IdSection=146&cat=146

Might be worth checking it out. Still not clear if you can actually withdraw paper money from them.

24 Gail Bebee

I changed Canadian dollars into euros recently for my son and I found that the Taheri Exchange near Yonge and Finch in Toronto had very competitive rates, even better than the rate TD gives its employees.
Last year I bought euros at Calforex exchange across from ROM. It had better rates than CIBC. I think I saved about $60 on around $1000 purchase.

25 Dividend Growth Investor

I don’t know if this works for Canadian Dollars, but if you open a Forex Trading account with a Forex Broker, you might be able to deposit the euros. You don’t have to trade at all. You will then withdraw the canadian money and close the account. I don’t know if the $20+ in currency savings is worth the effort though :-)

26 Bluemoon

I believe HSBC charges for cash transactions and none for electronic transactions. So it would be highly inconvenient for the average person to keep this kind of account.

I’ve checked into HSBC and it wasn’t worth the hassle. However, if you transact and do business in these countries, it may be worth it.

EmperorCoder // Jul 4, 2008 at 10:47 pm

Just found out that HSBC offers USD, Euro, Hong Kong Dollar, Swiss franc, Japanese Yen and British Pound denominated accounts in Canada.

http://www.investmentexecutive.com/client/en/News/DetailNews.asp?Id=45235&IdSection=146&cat=146

Might be worth checking it out. Still not clear if you can actually withdraw paper money from them.

27 mpmoda

I currently have 5k Euros that I need to change to canadian. I was living there last year . I don’t want to go through a bank because they obviously never give you what its actually worth.. Part of me wants to just keep it but i’m worried with how the economy’s going i’ll get nothing for it if I wait too long. The only way is for our CDN dollar to drop and the Euro to go up… Yea Right! Suggestions anyone?

28 Balkan Leaf

if you do have 100K+ where would you go to negotiate?

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