Switching money between banks to benefit from currency differences

token101

I just have a quick question. It's something that just kind of occurred to me at work but I don't know if it's feasible and before I ask the bank and look stupid, i'd like to see if it's a ridiculous idea.

If I had a bank account in Ireland and one in Canada, would there be anything stopping me from transferring money back and forth every day when the currency suits me? Would there be big charges which would offset any potential gains? Is this even possible to do in a day?

For instance, yesterday the euro-CAD was 1.3019, if i transferred yesterday I would have gotten X amount in CAD. If I was to take that today and transfer it back to my Irish account, when the euro-CAD is at 1.29, I would have gotten approx 50 euro extra (excluding any potential bank charges). Obviously this is for a large amount, approx 8500 euro.

Is that even possible to do with a bank transfer?

Jet Black

You don't get that rate that's the spot rate. There is a spread that companies/banks/fx traders put on it.

So if you were to transfer your euros it would probably be at 1.27 and to transfer the Canadian back it would cost 1.33 for a euro. Then there may be other fees. Transfer fees, receiving fees and commission.

You could trade but its essentially like the stock market and you could lose money.

Jet Black

Also the transfer wouldn't be instantaneous it would take a week or more for it to get over there. Even a transfer from one Irish bank to another takes up to 5 days.

token101

yeah it did seem a bit simplistic to be true!! Thanks anyway!!

Legislator

Jet Black wrote: »

Also the transfer wouldn't be instantaneous it would take a week or more for it to get over there. Even a transfer from one Irish bank to another takes up to 5 days.

Not any more - electronic transactions between clearing banks in Ireland now take 1 day if you make the payment before your bank's cut-off (mid afternoon in most cases) if after cutoff it takes 1 day longer.

coylemj

Jet Black wrote: »

You don't get that rate that's the spot rate. There is a spread that companies/banks/fx traders put on it.

So if you were to transfer your euros it would probably be at 1.27 and to transfer the Canadian back it would cost 1.33 for a euro. Then there may be other fees. Transfer fees, receiving fees and commission.

That would be a very wide spread, he should be paying less than 1% off interbank for an electronic transfer.

dimma

Legislator wrote: »

Not any more - electronic transactions between clearing banks in Ireland now take 1 day if you make the payment before your bank's cut-off (mid afternoon in most cases) if after cutoff it takes 1 day longer.

Dont know about that!!!!...I asked a couple of banks this face to face at the customer service desk and they said this is coming into affect but not as yet! I know you can pull stuff form the net but you will not get that on any of the banks website in big letters, Think they would be boasting about this if it was true,,:rolleyes:

GerardKeating

token101 wrote: »

I just have a quick question. It's something that just kind of occurred to me at work but I don't know if it's feasible and before I ask the bank and look stupid, i'd like to see if it's a ridiculous idea.

If I had a bank account in Ireland and one in Canada, would there be anything stopping me from transferring money back and forth every day when the currency suits me? Would there be big charges which would offset any potential gains? Is this even possible to do in a day?

For instance, yesterday the euro-CAD was 1.3019, if i transferred yesterday I would have gotten X amount in CAD. If I was to take that today and transfer it back to my Irish account, when the euro-CAD is at 1.29, I would have gotten approx 50 euro extra (excluding any potential bank charges). Obviously this is for a large amount, approx 8500 euro.

Is that even possible to do with a bank transfer?

If you want to play the currency markets, you can setup a forex account with one of the many different sites and gamble away.

Just remember (with your CAD-EUR example above) the rate could just as easily moved the other way.

You can lose a lot of money if get it wrong, read about Nick Leeson, John Rusnak , Jérôme Kerviel and Kweku Adoboli.

All of them lost hundred of millions (some lost billions) in bad deals.

Legislator

dimma wrote: »

Dont know about that!!!!...I asked a couple of banks this face to face at the customer service desk and they said this is coming into affect but not as yet! I know you can pull stuff form the net but you will not get that on any of the banks website in big letters, Think they would be boasting about this if it was true,,:rolleyes:

Dimma, its true -staff at counter level may not be aware but legislation has imposed these new timelines on Banks since 1st January. I have tried it and it works both between banks in Ireland and also within the EU.