Foreign Transfers: different banks - different exchange rates!

Dagobert · 7 November 2005 at 11:33AM

I occasionally transfer EUR amounts to my accounts.

As an experiment, I transferred €10 to several different accounts on the same day at the same time to compare the conversion rates of the different receiving banks and the number of days the transfers took.

I compared the GBP amount received to the interbank exchange rate of the date of receipt using the OANDA Currency Converter.

Interestingly, the GBP amounts differed!

Here are the rates of the banks I tested (the percentage value is the percentage of the interbank exchange):

Alliance & Leicester 2 days, 97.20%
Cahoot 1 day, 99.14%
Egg 1 day, 99.44%

Of the three, Alliance & Leicester converts at the worst exchange rate. I received £6.56, £6.69, £6.71 respectively. For €1000, the difference would amount to £14!

pin · 7 November 2005 at 12:23PM

Each bank will probably charge its own fee, that is where the difference may be. Have to asked the various banks what fees they charge to recieve €'s?

Dagobert · 7 November 2005 at 12:36PM

pin wrote:

Each bank will probably charge its own fee

I asked Egg and Cahoot whether they charge a fee for receiving EUR amounts - they don't.

The charge will be concealed as a percentage off the interbank exchange rate. I also asked at what exchange rate they convert but they both told me that that day's exchange rate would be applied. Quite frankly, I think whoever answered the question was clueless. Banks typically make money by applying different exchange rates for buying and selling currency.

Unlike credit card providers, who state what commission fee is applied to foreign transactions, I have not seen any bank accounts' T&Cs detailing how they handle foreign currency receipts.

Dagobert · 28 November 2005 at 12:03PM

I have been asked how you do a Euro transfer:

From your British bank, you need to find out the BIC (SWIFT) and IBAN numbers for your account. Then do a Euro Transfer from your Spanish bank.

Since 1/7/2003, it was possible to transfer up to €12,500 at the same expense as a national transfer. From 1/1/2006 the threshold is €50,000. But you must meet the conditions: specify name of the recipient and the BIC and IBAN numbers. My bank doesn't charge for transfers and hence the Euro transfer is free of charge for me at the European end.

Beware though, some banks charge for receiving the money!!!! I once did a Euro transfer to the Netherlands (€ -> €) and the receiving bank charged the recipient €10! (a flat fee: I had transferred €40)

Before you transfer, I would suggest to check with both banks whether there are any charges.

eagleeye · 4 December 2005 at 12:18AM

is there is any bank which offers free swift code transfers.Some offshore banks have got the correspondent banks in UK & they insist to put the money through swift with refernce number.Unfortunately HSBC charges for UK Swift code transfers.Is any alternative way!

Dagobert · 4 December 2005 at 11:28AM

eagleeye wrote:

is there is any bank which offers free swift code transfers.

None of the above-mentioned banks I tried charged for the transfer.

Foreign Transfers: different banks - different exchange rates!

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