Depositing Dollar cheque into my account

JefffM

I bank with Santander and have recently deposited a couple of cheques from America in US Dollars.
I was told that basically, the money would be converted from dollars to pounds using the standard Bank Of England exchange rate at the time the cheque was deposited (and I would pay a £10 fee per cheque).

Well, I paid in cheques on 2 separate occasions and was given receipts showing the date and the exchange rate used. These were both worse than the exchange rate shown on the Bank Of England web site (and other sites I checked).

For example one was on the 15th January 2014 and the web site shows 1.6350 but on my receipt it shows the rate as 1.67876699.

I know the rate fluctuates over the course of the day but the web site shows the 52 week high as being only 1.6528

What am I misunderstanding here?

Thanks

opinions4u

What am I misunderstanding here?

The rates for buying dollars and selling dollars are not the same.

JefffM

I realise there are different rates for buying and selling when you are changing money to go on holiday but I was told they used the "standard Bank of England exchange rate" as used by all banks for the cheque fund conversion.

I even asked then where I could find their rate and they said "it's the same for all banks" - surely that wouldn't be the case if they meant the rates used for buying/selling cash as that's different from bank to bank? Or could you direct me to a site where I can see this standard rate?

Also, doesn't this mean I am being charged twice for each transaction - they are taking commission on the exchange rate and charging me £10 per cheque on top.

Biggles

JefffM wrote: »

I realise there are different rates for buying and selling when you are changing money to go on holiday but I was told they used the "standard Bank of England exchange rate" as used by all banks for the cheque fund conversion.

You were advised incorrectly. What all banks use for this purpose is their own exchange rate. Which they make up......

Also, doesn't this mean I am being charged twice for each transaction - they are taking commission on the exchange rate and charging me £10 per cheque on top.

Exactly.

Aquamania

JefffM wrote: »

I realise there are different rates for buying and selling when you are changing money to go on holiday but I was told they used the "standard Bank of England exchange rate" as used by all banks for the cheque fund conversion.

I even asked then where I could find their rate and they said "it's the same for all banks" - surely that wouldn't be the case if they meant the rates used for buying/selling cash as that's different from bank to bank? Or could you direct me to a site where I can see this standard rate?

Also, doesn't this mean I am being charged twice for each transaction - they are taking commission on the exchange rate and charging me £10 per cheque on top.

This page explains Santander's policy on deposting a foreign currency cheque

http://www.santander.co.uk/csgs/Satellite?cid=1210607023591&leng=en_GB&pagename=Abbeycom%2FPage%2FWC_ACOM_TemplateA2#Depositing a Foreign Cheque; a Foreign Cheque; a Foreign Cheque;

Nothing there about BoE exchange rates.

It appears you were paid using the negotiation method.

I would expect you to have received the exchange rate as applied by Santander to the applicable transaction.

The £10 charge is to process the foreign cheque - nothing to do with exchange rates

JefffM

Hi, I already saw that page and that is exactly the reason I called them to clarify what exchange rate would be used as it simply says "The relevant exchange rate will be applied". They told be verbally it was the BoE exchange rate (I asked them where I could check the actual rate and they said "it's the same for all banks").

I have deposited several cheques recently and the one I quoted in my example was actually processed via collection as it was over £5000 (although this doesn't affect my question).

henm2

Not sure what is meant by Bank of England exchange rate. All the high street banks have their own buy and sell rates for drafts and cheques.

The rates are derived from the foreign exchange market where banks and other financial institutions trade in multi million pound deals. The larger the sum the better the deal and rates at that level change constantly according to demand and supply.

At a high street branch level where the amounts are much lower a bank will have set buy/sell rates for that day for each of the major currencies and each bank will have its own rates. However as a general indicator see http://finance.yahoo.com/currency-converter/#from=USD;to=EUR;amt=1

There will be a commission charge for each transaction. Generally the commission charge on 'negotiated' (small cheque bought immediately) deals is lower than the more expensive and much slower 'collection' deals. (bank sends off large cheque to foreign bank and several weeks later receives funds for you and exchange rate used is that on the day funds received)

M0ney

Might be worth trying Barclays mate, I opened an account with them specifically because I get a US dollar cheque several times each year. On Tuesday I paid in $7.81 and got £4.55 in the account on Wednesday (although sometimes it does take a few weeks for the cheque to clear, it didn't this time) by my reckoning this is a mark up of less than 3% on the exchange rate you find if you look it up online. I have never done this but I'm told that if you wish to pay in a cheque of value £50 or more there is a 0.5% surcharge but that still doesn't seem like a lot to me.