Large difference in buying an selling dollars

[w1z4rd]

I just spent $100 and it charged me R1126.64.

I just cashed in $1000 and I am getting R10554

Why is there such a large difference in the rand dollar exchange rate? It seems when I buy they shaft me a higher percentage than when I cash out

 

[froot]

It's so that the banks can make money off of it

 

[w1z4rd]

It's so that the banks can make money off of it

Thats such a huge difference, it should be criminal. Are there any banks which are more fair on these rates?

 

[froot]

Thats such a huge difference, it should be criminal. Are there any banks which are more fair on these rates?

They all advertise their rates, so you can just look for the one with the smallest difference, or the best buy-back rate. Just remember it changes with the exchange rate.

 

[MKFrost]

The banks usually fix a rate for the day i.e. a 24 hour period. If the markets are rather volatile this rate or spread increases as it should cover any movement for that particular day. Add to that the fact that a bank never does anything without making a profit and you have a rate which as you state is criminal.

I know FNB always used to charge me anything up to R0.45 more than the prevailing rate. Capitec on the other hand asks me within R0.05 of the prevailing rate as I see it on my charts.

 

[Ice2Cool]

Its called the spread. Thats where the banks make their cash. Certain banks use this as a mechanism to control their currency exposure. If if they are holding too much foreign currency they may increase the spread substantially to deter people from exchanging and may make it very small to entice people to convert.

There is also the cost of handling physical currency, vs "virtual FX" currency. Infact, what most people dont realize is there is a completely separate desk in banks that trade "physical currency". They physically ship loads of currency from one place to another, and with that you have handling costs, security, shipping, counting costs etc. This is why exchange counter rates differ quite substantially to the spot rates you see on the tickers.

 

[Entranog]

I moved from Belgium to SA this year and after allot of searching for a job started my own...
Get paid in Euros and Dollars allot and I use the guys at HiFX...

You need to provide allot of your personal stuff to get an account because they don't want to provide a service to scamsters.
But they will beat the prices of the bank by ALLOT.

I'm not connected to them besides being a happy client...

 

[vash87]

I came accross this the other day. https://www.midpoint.com/
Peer to peer currency exchange with no buy-sell spread. It's a brilliant idea - it could be a real game changer, or it could be too good to be true.