How much am I paying for Foreign Currency?

The easiest way to find out what margin your bank charges is to firstly find out what the live currency rates are when exchanging currency. You can find these rates on the Currency Solutions website.

Live Rates Table

When you convert currency, you sell one currency to buy another. Your financial institution charges you a different rate if you are selling a currency (the Bid rate) or buying a currency (the Ask rate). Keep in mind that Banks also charge transfer and admin fees that are additional to the margin.

 

Bank Rate

The Bid (or Sell) rate is the lower amount. You will receive fewer ZAR when selling your USD. Exporters will look at the Bid rate to calculate the margin a bank charges. For example, if the Live Bid rate is 8.8699 and a bank quotes you 8.65 you can calculate the banks margin by using a simple formula:

 

Bid Rate Bank Margin

The Ask (or Buy) rate is the higher amount. It will cost you more ZAR when buying USD. Importers will look at the Ask rate to calculate the margin a bank charges. For example, if the live Ask rate is 8.8754 and a bank quotes you 9.10 you can calculate the banks margin by using a simple formula:

 

Ask Rate Bank Margin

It is important to remember that apart from carrying the costs of a bank margin there are also other additional costs like the transfer fee and possible administration fees. In order to transfer funds abroad (SWIFT transaction) there will always be a transaction fee, be weary if a company advertises an offering without any transaction fees this will either mean that the transaction costs are absorbed into the margin or it may even be a scam.