Cheapest way to buy US dollars?
- Thread starter Kenster
- Start date
Hi Kenster
1. You know you can purchase USD cash with one of the big 4 banks or any FX outlet, but their rates are not good, plus you have to pay for commissions.
2. But, there may be a cheaper alternative. I have used this company, and my niece, recently went to the US to see her parents, used this company to buy USD cash for her trip. It is kvbkunlun.com - they have an office in Melbourne (we used the one in Sydney). If you do decide to use this company, then you should phone them to ask questions before going there. Their rates were at least 1 cent better than the banks, and there was NO commission. However, there are a few drawbacks: you will have to wait in line for ages (I mean over an hour or more!), they often ran out of US$ so you had to leave an order for the amount you wanted and picked it up the next day, they did not have small denominations - only give out $50 or $100!!! So, depending on the amount, you may say forget it, you may only save $20 and you don't want the hassle so you will go to the banks instead - no queues, and you can ask for small denominations (like $1 for tips etc).
1. You know you can purchase USD cash with one of the big 4 banks or any FX outlet, but their rates are not good, plus you have to pay for commissions.
2. But, there may be a cheaper alternative. I have used this company, and my niece, recently went to the US to see her parents, used this company to buy USD cash for her trip. It is kvbkunlun.com - they have an office in Melbourne (we used the one in Sydney). If you do decide to use this company, then you should phone them to ask questions before going there. Their rates were at least 1 cent better than the banks, and there was NO commission. However, there are a few drawbacks: you will have to wait in line for ages (I mean over an hour or more!), they often ran out of US$ so you had to leave an order for the amount you wanted and picked it up the next day, they did not have small denominations - only give out $50 or $100!!! So, depending on the amount, you may say forget it, you may only save $20 and you don't want the hassle so you will go to the banks instead - no queues, and you can ask for small denominations (like $1 for tips etc).
Post Office
Travellers Cheques commission free
http://auspost.com.au/personal/american-express-travellers-cheques.html
Travellers Cheques commission free
http://auspost.com.au/personal/american-express-travellers-cheques.html
No expiry date and you can just store them forever. If any get lost and you can produce a copy of the serial numbers Am Ex replaces them so they are safer than cash.
Not sure of the current exchange rate - it wasn't any worse than a bank from memory.
There is a $6K limit but if you want more you just do it in several transactions at the PO.
In the USA it's best to cash them at an actual Am Ex office to save on commissions. You need passport as ID. In some countries, you also have to have the "proof of purchase" slip which is a receipt matching amounts to serial numbers so it's good to take this and keep a copy at home.
It's also accepted paying hotel bills, department stores (although you may have to go up to the admin office first), restaurants if you've made arrangements in advance with the front desk etc, all without commission.
People think that cards are the only way to go, but I wouldn't dream of going to the USA, or anywhere, without travellers cheques as well.
Not sure of the current exchange rate - it wasn't any worse than a bank from memory.
There is a $6K limit but if you want more you just do it in several transactions at the PO.
In the USA it's best to cash them at an actual Am Ex office to save on commissions. You need passport as ID. In some countries, you also have to have the "proof of purchase" slip which is a receipt matching amounts to serial numbers so it's good to take this and keep a copy at home.
It's also accepted paying hotel bills, department stores (although you may have to go up to the admin office first), restaurants if you've made arrangements in advance with the front desk etc, all without commission.
People think that cards are the only way to go, but I wouldn't dream of going to the USA, or anywhere, without travellers cheques as well.
David Koche did an article on this last week and his opinion was the Post Office!
http://au.pfinance.yahoo.com/b/david-koch/1595/dont-buy-dollars-at-the-airport
http://au.pfinance.yahoo.com/b/david-koch/1595/dont-buy-dollars-at-the-airport
Anyone considering making a buck out of audusd movements via AusPost or any other avenue needs to consider these factors:
1.
FX gains are eroded in both directions - when you buy usd and again when you sell it.
AMEX margin is around 2.5% when you buy usd. I presume it is at least that when you sell though I cannot verify that on their website.
an example:
Buy 1000AUD worth of USD at audusd = 1.0
amex price is 1.0 less 2.5% = 0.975
you get 975usd for your 1000aud
Sell your 975usd when audusd drops to 0.9
amex price is 0.9 * 102.5% = 0.9225
you get 975 / 0.9225 = 1057aud for your 975usd
profit on a 10% audusd movement = 57/1000 = 5.7%
2.
Also note that holding US cash or TCs does not attract interest like a bank account. If there are another couple of interest rate rises, then term deposits may be offering 7%pa by early next year.
The advantage of buying usd then is to
- take profit from a quick fx movement.
- hide the fx gains from the tax man.
1.
FX gains are eroded in both directions - when you buy usd and again when you sell it.
AMEX margin is around 2.5% when you buy usd. I presume it is at least that when you sell though I cannot verify that on their website.
an example:
Buy 1000AUD worth of USD at audusd = 1.0
amex price is 1.0 less 2.5% = 0.975
you get 975usd for your 1000aud
Sell your 975usd when audusd drops to 0.9
amex price is 0.9 * 102.5% = 0.9225
you get 975 / 0.9225 = 1057aud for your 975usd
profit on a 10% audusd movement = 57/1000 = 5.7%
2.
Also note that holding US cash or TCs does not attract interest like a bank account. If there are another couple of interest rate rises, then term deposits may be offering 7%pa by early next year.
The advantage of buying usd then is to
- take profit from a quick fx movement.
- hide the fx gains from the tax man.
You could try a cash passport or similar. (Not limited to Suncorp - that's just as reference) Not sure the rates would be better, but could be more convenient than "old-fashioned" 
traveller's cheques.
Last time I dealt with traveller's cheques was in the UK in the late 90's and they were a pain! Had to keep going to a bank to cash them in, as retailers would look at you like you had 2 heads if you tried to use one, even tho' they are as good as cash. With the move to electronic transactions, I'd think they'd be even more wary nowadays.
traveller's cheques.Last time I dealt with traveller's cheques was in the UK in the late 90's and they were a pain! Had to keep going to a bank to cash them in, as retailers would look at you like you had 2 heads if you tried to use one, even tho' they are as good as cash. With the move to electronic transactions, I'd think they'd be even more wary nowadays.
http://www.kvbkunlun.com/en/html/product/forex/personal.aspx
I second babushka on the company. Quite competitive in my opinion as physical FX rates they give you are quite close to spot and better than everyone i've seen anyway.
My experience was not that bad... but was buying JPY instead of USD - they didn't give small notes as babushka but was not problem for me as broke it up upon arrival
I second babushka on the company. Quite competitive in my opinion as physical FX rates they give you are quite close to spot and better than everyone i've seen anyway.
My experience was not that bad... but was buying JPY instead of USD - they didn't give small notes as babushka but was not problem for me as broke it up upon arrival
I use them as well and they have excellent rates.
Can anyone elaborate what kvb's rates are, or where they can be accessed on the net?
And then you change it back if the dollar drops down again. Probably will. Just don't count on it being that predictable.
If people are serious about speculating on currency movements try
http://www.igmarkets.com.au/cfd/forex-example.html
I understand their spreads are 1 pip on $US/AUD and collateral required of only 1%
or
http://fxtrade.oanda.com/
I would prefer to use oanda (although their spreads are not as tight).
Oanda is also a good place to find live $US/AUD prices without being a registered user.
The risks in forex trading are substantial. I won't touch it.
http://www.igmarkets.com.au/cfd/forex-example.html
I understand their spreads are 1 pip on $US/AUD and collateral required of only 1%
or
http://fxtrade.oanda.com/
I would prefer to use oanda (although their spreads are not as tight).
Oanda is also a good place to find live $US/AUD prices without being a registered user.
The risks in forex trading are substantial. I won't touch it.
You have to call them up on the day.. and when you go there the rates moves around based on spot... I don't think they are more than 1% away from spot
Btw.. the trade now is to Long USD, Short US equities
we do a fair few AUD/USD exchanges in my line of work. We had a big one that was due to be booked today and the stupid rate has plummeted! now we have a 5 day wait to hope it gets up to .99 again so we make the gain expected on the deal.
The good news is that our FX advisor says todays dip is temporary and it will be back up to .99 in the next couple of sessions.
I have been watching the live feed all day and it just makes me nervous.. no idea how people deal in FX for a living.
Glad FX deals arn't are main business and we are not speculators, we just book what we need when we need. Not to say we haven't had a few good losses... but also a few good wins!
The good news is that our FX advisor says todays dip is temporary and it will be back up to .99 in the next couple of sessions.
I have been watching the live feed all day and it just makes me nervous.. no idea how people deal in FX for a living.
Glad FX deals arn't are main business and we are not speculators, we just book what we need when we need. Not to say we haven't had a few good losses... but also a few good wins!
