How To Save Money
Exchanging one currency for another is a common type of transaction that takes place every day on an enormous scale. Sometimes it is done by travellers and tourists visiting another country. Sometimes it is done by businesses in the course of their international operations. But whatever the reason, there is more than one way of changing money, and it is possible to save on the costs of the transaction.
In South Africa, there are basically two options when it comes to changing money. Either you make use of a bank, or you make use of a currency company. While the choice is yours, you are advised to keep the following in mind when making it.
The large commercial banks in South Africa all charge an administration fee on the transaction, which ranges from about ZAR300 to ZAR500. Also, they cannot tell you what exchange rate you are going to get. It may seem that they do not actually care. Banks in South Africa have literally millions of customers, and changing currency is only one thing that they do, out of many things. For these reasons, changing money through a bank can put you at a disadvantage.
A currency company, however, can make things a little easier by waiting until the exchange rate suits you. They can give you up-to-date information on the rate, and allow you to specify the rate range that you desire, so that you get the maximum amount of currency out of the transaction. For example, if you are buying US dollars with South African rands, and you are spending ZAR1 million,
at ZAR6.50 to the dollar you get USD153 846
at ZAR6.40 to the dollar you get USD156 250
which means that a difference of 10c on the exchange rate gives you USD2400 more.
Also, a currency company won’t charge you an administration fee on the transaction, so there is no fee structure that eats into your capital. The company can sometimes give you a better exchange rate than a bank through bulk exchanging, which means that because the company changes a massive amount of currency at one time, they get a better rate, something that a bank won’t do if you approach them as an individual.
Money Transfers to and from South Africa - here's how:
- Foreign exchange regulations in South Africa 03-01-2011
- Essential money transfer advice for all transactions 02-01-2011
- Exchange control relaxed in South Africa 28-10-2010