After a two-year hiatus, Singaporeans can start travelling again, be it a short-day trip to Johor or a long Europe trip. Wherever the place may be, having some foreign currency is always part of everyone’s must-have list of items.
In case you have forgotten or are new to exchanging money from a money changer, here is a quick crash course on what you need to know.
#1 Actual Exchange Rates You Receive May Differ With Rates Published On Internet
If you are exchanging at a money changer for the first time, you may be surprised by the difference between the rates offered by the money changer and the rates that you may see online. Usually, the rates offered by the money changers are slightly lower than the online rates.
For example, let’s assume you wish to change some Singapore Dollars for Malaysian Ringgit to spend over the weekend in Johor. You check the rates online and you see a popular online currency platform offering an exchange rate of 1 Singapore Dollar for 3.18 Malaysian Ringgit. However, when you head down to any money changer on the same day, you may find that the rates they offer range between 3.15 and 3.165. This difference is called a spread, and that is how money changers make money.
This spread accounts for not only the live interbank rates but also the local demand and supply of each currency.
#2 Don’t Change Your Money At Airports
Exchanging your currency at airports might be convenient, but it does come with a price. Typically, the exchange rates are less favourable than the rates offered by neighbourhood money changers.
Factors like high rental costs at airports and greater demand for physical cash by travellers are some of the reasons why the exchange rates are lower at airports.
So, if you want to have the best exchange rates, avoid the money changer kiosks at airports and instead go for the money changers at the city centre.
#3 Finding The Money Changers With The Best Rates
It can be frustrating to find out that you have received a lousier exchange rate than the rest of your travelling companions. Knowing the best place to change your foreign currency can save you money, especially when you are exchanging a relatively large amount.
To save you some time, we will point you to the top 3 popular locations where the rates are relatively fair in Singapore:
– The Arcade at Raffles Place
– People’s Park Complex
You can also use CashChanger to find money changers offering the best exchange rates, or you can use it to find a money changer that is closest to you.
#4 Avoid Going Down To A Money Changer On Weekends
If possible, you should avoid exchanging your currency over the weekends. The reason being, the forex markets are closed. As such, there are no live interbank rates published for money changers to take reference from.
Hence, money changers would usually price the rates lower over the weekend to account for any currency fluctuations based on last Friday’s closing.
#5 Buy or Sell? Which Column Should You Look At?
If you are new to exchanging money, you could be confused by which (buy or sell) column of the board you should focus on.
Here is how you can understand it once and for all. Ask yourself if you are buying a foreign currency using the Singapore Dollar or if you are selling the foreign currency you have for the Singapore Dollar.
Assuming you are travelling to the US, below is what you will see at the exchange board.
So if you wish to change your SGD currency to USD currency, it means you are “buying” the USD with SGD. This makes you the buyer, and the money changer, the seller.
Hence, the money changer is selling you the USD currency. You should look at the column “We Sell”.
A quick way to check if you are looking at the correct rate will be to convert the SGD in using both rates. Whichever rate results in you having less of the foreign currency would be the correct one.
#6 Personal Information Is Required For Transactions Above $5,000
If you are exchanging more than SGD $5,000, you will need to provide your personal information to the money changer as part of the directive found in MAS Notice 3001.
You may be asked to provide your identify card or document for verification, including proof of address. All of your information will be kept private and confidential by the money changers as per the Personal Data Protection Act.
#7 Ask For Receipt
Once you have changed your money, do not forget to ask for a proper receipt for the transaction. All receipts must contain the details of the money changer and the transaction as per the directive from MAS Notice 3004.
If you are given a calculator printout as it was in the past, you should not accept it. Instead, you should insist on the official receipt. This will be helpful in the event of any disputes between the money changer and yourself.
#8 Go Cashless With The Use Of Multi-Currency Accounts And Wallets
Physical cash is slowly trending out as governments push for a cashless society. While there may be some occasions where physical cash could be required, in general, you can get by with cashless payments in most parts of the world.
You can start making cashless payments with the use of multi-currency accounts and wallets. A multicurrency account is typically an account at a bank or financial firm that lets you spend, receive, and hold multiple currencies. Some of the major plus points include: one, you are able to get the exchange rates close to the online rates; two, you can exchange and hold some of these currencies in your wallet whenever the rates are favourable; and three, you do not have to pay the high finance charges and receive low exchange rates that are typically associated with traditional credit cards.
This article was first published on 26 November 2015 and updated with new information.
The post 8 Things You Need To Know Before Heading To The Money Changer appeared first on DollarsAndSense.sg.