How to get best USD to EUR exchange rate?

KyussBishop

For my work, I get paid USD from a US company into my account (exchanged to Euro in the process), and I notice there is quite a large difference between the exchange rate of the day, and the exchange rate I'm given by my bank (i.e. market vs 'interbank' exchange rate).

This looks like it may be costing me hundreds over the course of the year, so I wonder what is the most efficient way of transferring money over, such that I get as close to the market rate as possible?

I don't need to stick with my current bank or anything, just am looking for the most efficient possible method of transferring and exchanging my money, so I can get the most out of it.

Jet Black

You won't get the market rate, there will always be a spread.

chris85

You say its costing you hundreds each year but its not really. You are not going to get the market rate anywhere, Xe.com is harmful in the way this is what people think they should be getting when its the market rate and you will be going on the spread for exchange so you will not get this rate.

You can shop around between banks. However this is not easy as sometimes one bank will be better and it may switch another time. They will always be very close to one another.

Bluefox21

I imagine recently it has actually made you a couple of hundred in the last few weeks. While it would have cost you $1400 + to get €1000 it will now only be about $1280.

The answer to your question really depends on how often you need your money and how good you are with budgeting. The dollar is quite strong at the moment (although Imo it will reach 1:1.2). When it does reach a rate that you are comfortable with I would recommend entering into a forward contract to essentially lock in that rate. Problem is this would be very difficult if you were withdrawing every week but would benefit you if you just made two large withdrawals over the course of the year.

It's very hard to predict FX but at least you will know exactly how much money you are going to receive. You would also get a much better rate than those offered by retail banks.

KyussBishop

Bluefox21: Interesting, where would I go for such a contract, how would locking the rate in a forward contract work?

I get USD transfers roughly bi-monthly, but I could setup a USD account and let it build up there over time.

unclebill98

Are forward contracts available for personal customers? I would not have thought so.

You branch can organise them for you.

johnfitz69

If you open a demand USD account with PTSB, you can get paid into that. Each morning a spot rate is set for USD to Euro. You will have to go into a branch to convert tho. There is no commission. Its usually the same rate you always see advertised.