Given how weak the Australian Dollar has been in 2023, more people are looking to get better exchange rates. Understanding how to exchange money is the first step to avoid being ripped off! We compared the main ways to exchange money and recommend avoiding banks and using a money transfer specialist.
How to find the best exchange rates
When transferring money internationally or exchanging currency for a trip overseas, you will want to get the most bang for your buck. So here's our top tips on how to get the better exchange rates:
Do
Use money transfer specialists: Providers such as OFX and Wise add lower markups to exchange rates and cheaper transfer fees than a bank. Also, international transfers should only take 24 to 48 hours.
Convert money when rates are favourable: Exchange your money a few months in advance when rates are more favourable. Following the news will help, you can lock in a better rate as currencies tend to overreact in the short-term to news around inflation and interest rates.
Don't
Exchange money at airports or train stations: Although it's convenient, they never offer the best exchange rates. You will find they take advantage of people's need to exchange their money and charge expensive markups.
Use a credit or debit card abroad: Unless you're 100% sure, your card could add foreign exchange fees on overseas purchases.
How to get the best exchange rate on international money transfers
If you plan to use an international money transfer service, then it's best to shop around and compare your options. The more time you can leave yourself before needing to make the transfer the better. Here are a few things to think about when comparing money transfer exchange rates:
Compare providers. Use our table to compare online providers. It is also worth getting quotes from a few providers and seeing which offers the better deal.
Know the mid-market rate for your currency. Money transfer providers skew exchange rates in their favour. Therefore it is best to use the mid-market rate as a baseline and see who is offering a fair exchange rate.
Use transfer tools to save money. Consider using recurring payments, forward contracts and limit orders to get a stronger exchange rate.
Skip the bank. The bank is not your friend in this situation, as they almost always offer weaker exchange rates. For example, CBA adds a markup of 4.10% when exchanging money.
Send larger amounts. You will find that many money transfer providers offer stronger exchange rates for larger transfers. If you send more than $10,000 with OFX you will avoid any transfer fees.
Finder survey: Would Australians of different ages use a bank or a money transfer specialist to send money overseas?
Response
75+ yrs
65-74 yrs
55-64 yrs
45-54 yrs
35-44 yrs
25-34 yrs
18-24 yrs
Bank
46.55%
32%
29.65%
27.98%
31.98%
35.32%
44.33%
I do not send money overseas
31.03%
54.29%
50%
48.7%
35.03%
33.03%
28.87%
Money transfer specialist
17.24%
11.43%
13.37%
17.62%
25.38%
26.15%
17.53%
Neither
5.17%
2.29%
6.98%
5.7%
7.61%
5.5%
9.28%
Source: Finder survey by Pure Profile of 1110 Australians, December 2023
Which Australian bank offers the best foreign exchange rate?
Based on reviewing exchange rates for the top three currency pairs, NAB is the bank with the best foreign exchange rates in Australia. This came as a surprise, as we expected to see ANZ take the top spot. Out of the big four banks, Commonwealth Bank provides the weakest rates. Despite the results, we recommend using a money transfer specialist such as Wise, OFX and TorFX if you're sending money overseas.
Bank
AUD to USD
AUD to Euro
AUD to GBP
ANZ
0.6528
0.6056
0.5211
Commonwealth Bank
0.6511
0.6025
0.5178
NAB
0.6606
0.6115
0.5254
Westpac
0.6525
0.6046
0.5195
The data contained within the table was captured on 13 June 2023.
How to monitor exchange rates?
If you know in advance you will be sending money abroad or travelling overseas, then you should monitor currency trends ahead of time. Take a look at our live currency converter to see what exchange rate you would get for converting your cash today. Market demand dictates how much one currency is worth compared to another - this is known as the mid-market rate. It is also the rate that banks use to trade money with one another.
When you convert money through a money transfer service, you will typically find that the provider adds a margin on top of the exchange rate to make money. So it is worth keeping this in mind when you are monitoring exchange rates. Select the currency pair to fit your needs
If you know in advance that you will be travelling abroad, then there are several options to exchange money:
Order foreign currency online. You can order currency online from a service similar to S Money and pick it up from a local store. When we reviewed rates on 7 August 2023, S Money had strong exchange rates for USD, Euro, JPY and GBP.
Check local money changers. Take a trip into the city and view rates at money exchange services such as United Currency Exchange, Travelex, Travel Money Oz and Crown Currency.
Check your local bank. If you have an account with one of the larger banks in Australia, they should be able to sell you a wide range of foreign currencies. Just beware of poor exchange rates.
Where to exchange currency outside of Australia?
When traveling internationally you'll typically get better exchange rates at banks, ATMs and post offices. If you have a bank card that doesn't charge international ATM fees, this will most likely be the strongest and most convenient option.
It may be possible to exchange money at your hotel, but double-check the rate against the mid-market rate to see how strong it is. You may also find that some local shops and restaurants offer to accept payment in your native currency.
Here's our dos and don'ts when it comes to exchanging currency outside of Australia:
Do exchange money at:
ATMs
Post offices
Banks
Your hotel
Do not exchange money at:
Tourist destinations
Street-side exchange bureaus
Airports, train stations, bus stations and the like
Why you can trust Finder's money transfer experts
We've done the work
We've researched and reviewed over 50 money transfer providers to make our guides as helpful as possible. Our experts regularly appear on SBS News, Sunrise and 7News.
We're reliable
Our product database of 26 providers is updated weekly with the latest deals in Australia. Our guides are regularly reviewed and fact-checked.
We're here to help
In 2022, we helped over 68,000 people find the right provider to transfer money overseas. We're here to help you save money on exchange rates!
Frequently asked questions
When exchanging large amounts of money, a small variance in the exchange rate can lead to hundreds of dollars lost or gained. Exchange rates are calculated based on what people are willing to buy and sell foreign currencies for. So it is a good idea to monitor foreign currency rates if you know you will need to convert your money soon.
If your bank gives you free international ATM withdrawals, this may be one of the cheapest options to get cash while traveling abroad. However, remember to check the rates and fees offered by your bank to make sure you are getting the most bang for your buck.
Zak Killermann is a staff writer at Finder specialising in money transfers. He has ghostwritten hundreds of FinTech articles over the years and found his love for publication at St. Cloud State University. Zak has been travelling internationally for nearly half his life and — after getting burned once by an over-the-counter money exchange — vowed to never settle for anything short of the mid-market rate.
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I have to buy something in USA which will cost $18000 US. What is the best way to arrange payment getting the best exchange rate and other costs. The payment will be made next week.
I have the money in an ING account
I wish to transfer $10,000 AUD into a debit card that I can use whilst travelling overseas. Can I do this through Macquarie and Ox Forex? What is the process? I have a cash management account with Macquarie. How do I transfer AUD funds from that account into EUR and then into my Debit Card.
Thanks for the question – you must be excited to be travelling!
At the current time, Macquarie Bank does not offer a specific travel card option which allows you to load funds onto and spend overseas, and they also do not offer a specific debit card, although they do offer credit cards which could in theory be used overseas and then paid off.
OFX on the other hand does offer a specific travel card, and the way this works is simple: You activate your account, and then pay your funds into it using BPAY. The funds will still be in AUD at this point. Once you see a favourable exchange rate, you can convert your funds into EUR, which helps you avoid any exchange rate fluctuations while you’re travelling.
You can also compare other travel money options from other providers to make sure you’re getting the best deal.
I have a Citibank plus account which has no foreign conversion fees or transaction fees. When I withdraw money from an ATM in Britain, are Citibank conversion rates applied or the bank owning the ATM’s rates. Is it better to convert Aussie dollars to British pounds here or wait till I arrive in Britain?
As finder.com.au is a financial comparison service, we can’t actually recommend any one product, service or strategy to our users, as the ‘best’ option will always depend on the user’s individual needs.
However, we can compare that the exchange rates applied are determined by the Visa exchange rates at the time of purchase. Although there are no international ATM withdrawal fees charged by Citibank, please note that a local ATM fee may apply.
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I have to buy something in USA which will cost $18000 US. What is the best way to arrange payment getting the best exchange rate and other costs. The payment will be made next week.
I have the money in an ING account
Hi Fiona,
Thanks for your question.
Since you’re buying a product your options are limited. Unless the retailer is willing to accept an international money transfer, you may need to purchase the item using your bank account.
You can be charged a currency conversion fee with an ING bank account. You may shop around for banks that has minimal fees and don’t charge currency conversion fees.
Cheers,
Shirley
I wish to transfer $10,000 AUD into a debit card that I can use whilst travelling overseas. Can I do this through Macquarie and Ox Forex? What is the process? I have a cash management account with Macquarie. How do I transfer AUD funds from that account into EUR and then into my Debit Card.
Hi Kevin,
Thanks for the question – you must be excited to be travelling!
At the current time, Macquarie Bank does not offer a specific travel card option which allows you to load funds onto and spend overseas, and they also do not offer a specific debit card, although they do offer credit cards which could in theory be used overseas and then paid off.
OFX on the other hand does offer a specific travel card, and the way this works is simple: You activate your account, and then pay your funds into it using BPAY. The funds will still be in AUD at this point. Once you see a favourable exchange rate, you can convert your funds into EUR, which helps you avoid any exchange rate fluctuations while you’re travelling.
You can also compare other travel money options from other providers to make sure you’re getting the best deal.
I hope this helps,
Marc
I have a Citibank plus account which has no foreign conversion fees or transaction fees. When I withdraw money from an ATM in Britain, are Citibank conversion rates applied or the bank owning the ATM’s rates. Is it better to convert Aussie dollars to British pounds here or wait till I arrive in Britain?
Hi Lyn,
Thanks for your question.
As finder.com.au is a financial comparison service, we can’t actually recommend any one product, service or strategy to our users, as the ‘best’ option will always depend on the user’s individual needs.
However, we can compare that the exchange rates applied are determined by the Visa exchange rates at the time of purchase. Although there are no international ATM withdrawal fees charged by Citibank, please note that a local ATM fee may apply.
I hope this has answered your question.
Thanks,
Sally