Bank humping me? Need currency exchange advice.

lendaddy · 09:22 AM

I deposited a check for 34,586.75CD(Canadian $) on 3/4. My bank told me that they go through "Bank One" for their conversions and that the date it clears through them would be the day my exchange rate would be locked in. Ok, fine I said. Well the dollar has been growing stronger for over a month now and really gained heavy since late Feb. so I was happy that we would be making over a grand on the exchange. So I thought.....

Today I get the final papers from my bank saying that we lost!!! a couple hundred on the exchange.????? I called my little bank and they have no idea about this stuff and assume that Bank One took a $1,400 commission since they don't take any???? Huh? Is this right?

Anyway, I deposited on 3/4 (they give no actual "clear date") and claim my exchange rate was .7929. Well, according to all the info I can find it hasn't been under .8 for over a month and has been .81+ for weeks. Am I getting screwed or is it common for a bank to take 4% or so commission?

widebody911 · widebody911's Garage

http://finance.yahoo.com/currency/convert?from=USD&to=CAD&amt=1&t=5d

lendaddy · 03-15-2005, 09:55 AM

Thom,

I already have the charts, I'm looking for what the banking practices are.

Groesbeck Hurricane · 03-15-2005, 10:04 AM

The stated exchange rate is likely for large corporate customers and banks making the changes amongst themselves. You and I are most likely charged at a less attractive rate in order to make money on the transaction to pay people's salaries.

When I lived in Belgium I always had to exchange USD into BF under the posted international exchange rate, and I exchanged at the military installation.

lendaddy · 03-15-2005, 10:08 AM

Yep, I understand that too. But what I want to know is where is it published? I mean certainly I should be able to get a number of the "effective" rate somewhere? Or maybe a simple disply of commissions? 4%+ seems quite high to me.

RallyJon · 03-15-2005, 10:17 AM

I had the same problem with a dividend check. Made the mistake of depositing it at a teller, she looked up the daily rate and gave it to me. Cost me about 4%. I called our commercial contact (we have the business account there, too) who put me in touch with another contact at the currency desk, who gave me a number to call to get a better rate in the future. It would have been about 1% using their best rate.

In my experience with mainstream banks for both personal and commercial accounts, any rates or fees that are their rates or fees are negotiable. The extent depends how good a customer you are.

But in some cases your bank isn't the one charging the fee. For currency exchange, overseas wire transfers, etc a local bank will often use other banks along the way, which charge their own fees. If you're going to be accepting a lot of foreign checks, this is an item to discuss with them in advance.

lendaddy · 03-15-2005, 10:20 AM

Thanks Jon, that's what I figured. These "middle banks" know they've got ya by the short hairs and since you're not their customer what can you do? I had already told my customer "certified US funds from now on". before I even cashed this check. I'm lucky we only lost a little, cause a few grand would have been a mojor problem

Live and learn.

jyl · jyl's Garage

I recall when I had to send several thousand in tuition to a British school, getting royally hosed by B of A on the exchange rate. It was painful at the time, being a graduate student with a family.

Anyway, as a prior post said, the published FX spot rates are for institutional FX traders making transactions in the million dollar to hundreds of milion dollar range. Not for individuals.