GETTING FOREIGN CURRENCY A CON STILL - ALA BOI

I must admit I am miffed as I thought with all this publicity about banks they would be a bit more careful in dealing with customers but boy was I WRONG!!

I needed a 1000 swiss franks for a trip abroad this Saturday and ordered same from BOI last week and got them today. I was surprised with the difference in the rate I was quoted by xcom on the net and the actual amount I was charged. €650.00 on net but BOI stung me for €681.34. I was not alone when I collected same so could not complain but did go to the local NIB and was quoted €666.00. Now I can live with an extra €16.00 but €31.34 is taking the P. My transaction was at €1.4815 rate and €6.34 commision. NIB was €1.50 rate and €2.54 commission. I rang bank of Ireland and was offered the commission back but not the better rate. I am gutted as normally quite careful. As it is so close to Saturday I cant get currency elsewhere this time. Rest assured I will never use BOI again and I am a customer as well. Morale of the story SHOP AROUND and can someone put the best place to get FE on this site? Anyway it has given me the incentive to move my House Insurance from BOI and I will no doubt save more than the €15.31 I lost. I thought they would have refunded the difference at least. I got a basd exchnage rate and got stung for commission as well.

BE WARNED.

NOAH

similar story

Before going on a trip to New Zealand in 2000 I needed to collect about $1,400 NZD so I ordered them from the local AIB. Prior to collecting the money I checked the online (true) rate and it turned out to amount to a 10% difference. I rang AIB head office to complain and ask for a reason, they told me that they bought all their currency through London where they pay 5% and the other 5% is their own commission and as for the commission fee they charge on top of that !!!!!!! BANDITS !!!

Re: similar story

This is just the way that currency exchanges work - there will always be a difference between prices quoted by different institutions and this is just a function of the market conditions.

Essentially if BoI have more USD than they need they will sell it cheap and if NIB don't have as many USD as they need they will charge a premium. In reality the retail volumes (a few hundred or thousand € at a time) aren't going to be sufficient to move the price, but the essential concept is the same - some institutions will be selling cheaper than others at any one time.

Over time, I'm not sure whether any one particular institution is consistently better value.

With regard to XE and other currency exchange websites, these are only usefull as guidelines rather than as absolute references. There is nothing written anywhere to say that BoI must buy or sell at the rate that XE indicates.

Given your situation I would prefer to be €34 to the good, rather than BoI having it, but it is actually only about 0.5% of the transaction total.

As you say, the moral of the story is to shop around and ask *in a few branches* how much will it cost including all charges to get SRF1,000 and then pick the best one on the day.

z

FOREIGN EXCHANGE FOR REPLIES

I know xe is only a guide but it helps. AIB quoted me €673.00 all in incluiding 1% commission and they had the francs on site. I honestly thought I would get a weak exchange rate but not that weak and then pay no commission as a customer. To be honest to take €31.34 off me a lowly customer smacks of total unfairness. I have a good mind to go back in tommorrow and get my money back and then go to AIB or I will try the Ulster bank as well.

I get the disticnt impression that the banks don't rally give a t*** and try to get away with anything and everything. I pay charges as well and they make big profits, well I am hopping mad and will cancel my house insurance with them first and then close my account. They could easily match NIB if they really cared.

Zag the point I am making is this is a rip off. To charge 8 euros difference from AIB and both banks are alongside each other is not on, 8 euros is £6.24 in old money. When I was in the UK I could get FE with a £2.00 max charge and a good rate. The NIB difference is €15.23 extra and that is £11.70 in old money. That is a disgrace.

Why try and make a whopping killing out of a measly 1000 francs?

In fact there is absolutely no justification. I feel better now and will save a fortune on the House Insurance anyway.

Oh when it comes to using an Irish Credit card abroad the charges are something else!!

noah

Re: FOREIGN EXCHANGE FOR REPLIES

Hi Noah - I have to say that I thik you are overreacting. Banks are entitled to charge for their services and make a profit. We as customers are entitled to shop around to find the best value for money when we want such services. A couple of phone calls in advance asking the right question ('what will be the total cost to me inclusive of all fees/commissions for x amount of x currency') would have made all the difference.

FOREIGN EXCHANGE

I disagree rainyday, the point I was making and will continue to make is this is a total and utter rip off by bank of ireland, I got a bad exchange rate, I got charged maximum commision, I am one of their best customers, savings, credit card, mortgage, insurance, cheque account and I am still treated in this fashion. To have a discepancy of 15 euros between 2 organisations existing side by side should not be allowed or tolerated. I beleive by posting on here I am making a lot of other people aware of what banks can do THEN it may finally get noticed and somone or some government will step in and say enough is enough. There are profits and excess profits and there are rip off profits, to charge a joe soap over 31 euro is and always will be a disgrace and in my view unethical and immoral in fact it is obscene. I wrote to BOI and pointed out what had happened and they did reply and said it was been passed to head office. Until more people make a stand then we will continue to be ripped off. And by the way have u ever tried to phone banks recently???

I am just back form my holidays and used a credit card to get most of my exchange, I got a good rate and it cost me nothing. It was a UK credit card. Have a look at what BOI charge u if u use their cc in a foreign country and dont say u can ring round for a better cc before u go abroad. The people in Ireland are being conned and hopefully this board will go some way towards rectifying that.

FOREIGN EXCHANGE

Along the same lines I wonder will the BoI make charges when the solicitor winding up my mother's estate in Dublin releases the funds to myself (in the UK) and my sister (in Nederlands). Obviously my sister's half will stay in euros so won't involve a currency exchange just a bank transfer. My share will be approx 170K euros. Should I have it wired to my UK bank in euros and have the UK bank change it into sterling? Does this mean that I won't actually know what the charges are until the day? (that seems bizarre!)

FOREIGN EXCHANGE

The "that's the way it is" responses to NOAH's experience don't make sense. If there is a publicised "rate of exchange" between international currencies then presumably that is that country's "official price" for their currency at that moment in time?

From this thread it sounds as if the cost of the transaction depends on whether a particular bank (or even "branch"!!) has good reserves of a particular foreign currency at any given moment.

If that is the case then surely EVERYONE should purchase from the primary bank in the country of that particular currency?

If there is no actual, factual, exchange rate presumably a private individual who has (just as an example!) returned from a trip to China can set up her stall outside the BoI and "sell" Yen off in exchange for Euros to any passer-by who wants to purchase, at a lower rate than the BoI (which might be clean out of Yen at that particular moment!)

Re: FOREIGN EXCHANGE

Hi Marie - There is no single official exchange rate. Different banks will offer different rates, depending on whether they want to hoard or get rid of the currency in question.

I guess your friend who has returned from China might get into trouble with IFSRA for operating an unlicensed bank. In relation to your planned movement of money to the UK, you should certainly 'haggle' with your bank to get an agreed rate in advance.

Re: FOREIGN EXCHANGE

Marie/Noah/everyone,

There is *no* fixed exchange rate between currencies, with the exception of the various (out of date) old European currencies like the punt and the euro, and a few other "minor" currencies which decide to align themselves with a more major or stable currency.

You should think of a currency in the same way as you think of a share. Today the price might be €1.50 per share of X Ltd, tomorrow it is €1.47, the next day it is €1.49, the next day it is €1.51. In the middle of any of these days the rate will also vary depending on the wholesale market. You can go into a stockbroker and arrange to buy 5 shares, but you won't (unless you have a very specific arrangement in place and you do this a lot of the time with the broker) be able to specify the price you buy at - it will depend on the price at the time the broker goes to the market.

The currency situation is the same - the price you get is *only* the price someone else is willing to pay at the exact time you go to the market. For ease of operation, *each* bank will fix the price they are willing to pay possibly a few times during the day. Each bank will be different unless there is a co-incidence.

You could compare it to apples, or cars, or petrol, or anything really. You could have two petrol stations next door to each other selling the same product at different prices. This is not a rip-off, it is the market. You could have apples from the same orchard for sale in a convenience store and a grocery and have different prices. Again, this is not a rip-off, it is the market.

Another example of how the currency market works - say I come back from the UK with £1,000 to spare because my holiday was cancelled. A friend is going to the UK next week and needs some cash. I offer to sell it to him for €1,500 and he agrees because it saves him having to go to the bank and anyway for the last few days the rate has been €1.6:£1. That day he passes the bank and sees that he could have got it for €1,450 because the rates moved. Has he been done by me ? No, I quoted a price, he weighed it up and agreed it - our own little market fixed a rate for that transaction.

Marie - for the amount of money involved you should really get it paid into a € account here at least temporarily until you decide whether you really need it in £ or not. You could try to fix an exchange rate for the payment in advance, but unless you are either a currency market expert or else lucky you could end up fixing a worse rate than you would get on the day. Get it wrong by 1% and you are down €1,700. And as above, unless you are sure you want it in £ you may end up paying to get it converted back to € again. If there is no immediate rush to go to £, then I would suggest waiting before converting.

z

FOREIGN EXCHANGE

Thanks for that advice about my legacy. I do want to keep it in Euros if poss. as I plan to buy a house in Ireland in about 3 years time, but also wanted to "decant" sufficient to pay off my sterling mortgage here in UK. It would never have crossed my mind to negotiate a good exchange rate as I believed these were "set" by the main banks in the respective country. I had better get advice, now, on how things work in terms of interest-rates, taxes payable etc. if I leave money in an Irish bank in a euro-denomination account.

Your information about the currency exchange process and value-setting is a revelation. It sounds as if money is "just a commodity" like any other. In which case doesn't this introduce another variable into international trading of commodities like steel, oil, sugar, wheat? As well as the "price" set by the seller in - say - USA there is also the equivalence against other currencies put on the $ at that historic moment which can affect what the producer/country of origin actually receives!

Amazing!

Re: FOREIGN EXCHANGE

Marie,

all banks will quote you a better rate for larger amounts. You should get close to the "wholesale" or commercial rate, rather than the retail rate charged for small amounts.

Get quotes from a number of them first.

In relation to the 'commodity' aspect of exchange rates - banks will provide (for a fee) a measure of protection for companies wanting to trade where the payment/cost will be in another currency.

FOREIGN EXCHANGE

Thanks EuroDilbert! It's good news that its possible to get a better rate for the larger amount through a euro-to-sterling exchange in a UK bank as I've had difficulty trying to set up any bank a/c in RoI since I'm currently non-resident......and I wouldn't know where to start in setting up an off-shore Euro account though I understand both Irish Nationwide and Nationwide in the UK both have these (and the latter is my mortgage-lender here so perhaps would transfer funds to my mortgage a/c without huge fees).

Still, on the wider issue of the "commodity" nature of money the information from Zag et al on the arbitraryness of currency has shaken the fundaments of my world-view. Who decides to print more money when, for example, a particular currency is 'strong' (e.g. sterling for the past couple of years).

Returning to NOAH's situation of paying so much in BoI for his Swiss Francs, given the premiss wouldn't he have (automatically!) got a better deal to purchase in Switzerland?

Marie.....

Do you have enough documentation to persuade an Irish Bank to open an account for you ?

If so then I would suggest that you open a deposit account with one of the non high street banks. e.g. IIB, Anglo Irish, Investec etc. etc.

Given that the amounts involved are high 5 figure+ they should be happy to give a fair rate of interest and ( whatever of the others ) I find Investec fair on foreign exchange transactions & transmission.

( Provide proof that you are not based in Ireland & I guess they will pay interest gross )


TTFN

.

NotBanker that is very helpful. I'll contact Investec. I have no difficulty producing the official documentation, the only question was about non-residency (that was from high-street banks) and Investec sounds like the kind of institution I need, so thanks for that advice. I've never in the past had money over and above the getting-by level so am clueless on these issues.

Re: .

It is very simple in Ireland to set up a foreign currency account with any of the major banks, so presumably you would have no trouble setting up a euro account in the UK with any of the major banks. Ask them!

Re: .

The suggestion from Extopia is a good one. Any of the UK banks should be able to open a Euro denominated account for you. The only thing to consider is the charges that will apply to this account. Foreign currency accounts in Ireland are not the norm and tend to attract higher charges that your standard current account. It is some time since I looked into this so my information may be out of date, but in the past charges in the UK were even higher than here, when they did apply. Your posts indicate your are looking for a simple Euro deposit account with few/ no transactions so it may not be an issue, I just mention it as a consideration.

If you are leaving the funds in an Irish account shop around. For an amount of 170k any Irish bank will give you a rate better than their standard.

Finally, if converting to GBP and sending to the UK, as mentioned earlier ensure you negotiate a rate. The standard rate for the transaction will be better than that quoted in a branch (as there is no physical delivery of notes/coin required) but even better rates will be provided if you ask.

Deposit account charges .........

"Foreign currency accounts in Ireland are not the norm and tend to attract higher charges "

In my experience no bank here has ( yet ) had the neck to try to levy charges on deposit accounts.



eDog

Re: Deposit account charges .........

Elderdog,

If you are going to quote me, please quote the full sentance:
"Foreign currency accounts in Ireland are not the norm and tend to attract higher charges that your standard current account."

Also, if you know how to operate foreign currency accounts in Ireland without incurring charges I would be interested in this information, and obliged if you could pass it on.

Thanks,
S

operate foreign currency accounts in Ireland

I guess it depends on what you are looking for and what scale of business is involved.

If you are looking for some form of account that allows you to write cheques on it then you will be looking a long time.

If you want an account that you can do transfers to & from ( this is what I understand Marie is thinking of ) then ( provided the scale of business is there ) you will find many happy to oblige.

eDog