Look at the buy and sell rate. The difference is called the spread. This is the charge imposed by the bank to cover their expenses and profit. It is the cost incurred by the customer to convert from Signapore dollar into the foreign currency and to convert it back at a later date.
If the spread is less than 0.5%, it is a good rate. If it is more than 1%, it is too expensive.
I found the spread charged by a local bank to be as follows:
TT OD
USD 1.1% 1.6%
Euro 1.1% 1.3%
GBP 1.3% 1.7%
AUD 1.6% 2.1%
NZD 1.7% 2.2%
Other 2.6% 3.4%
TT - telegraphic transfer
OD - on demand, i.e. currency notes
The spread is slightly lower for sums above $50,000
LOWER SPREAD AT POEMS.COM.SG
I found the spread on foreign currency at POEMS (Philips Securities) to be 0.3%. In the future, I will convert my money at POEMS and ask them to transfer it to a bank to place on fixed deposit.
3 comments:
you think 1.5% is high enough? HSBC singapore imposes 2.5% spread on SGD-USD exchange. in indonesia it gets much better (for them, not the consumers). they impose exchange spread as low as 6.4% :).
with spreads like that, it is probably worth taking the exchange business to money changers :).
I think Priyadi has totally misunderstood the meaning of spread. If I were to convert USD to SGD, I would look for institution that give me the lower spread. Even if I am under gunpoint today, I will never take 6.4% from indonesia. Your money changer in indonesia must be happy to have you as your customer. As a customer you should be hoping for lower spread and not the other way.
patience, my young jedi. you'd miss the joke if you read too fast :)
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