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:
- Go to a bank branch and get the money converted.
- 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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