Posted in Travelling Overseas.

Is It Cheaper to Exchange Cash or Transfer Money Overseas?

Justin Rampono has spent over 20 years working in some great roles at large banks, corporates, start-ups and scale-ups. He loves building businesses, nurturing relationships and more recently tackling massive jigsaw puzzles.

He researches and writes about foreign exchange products and has been quoted in the Australian,, Lifehacker and The Hip Pocket. Justin has a Diploma of Financial Services, a Bachelor of Commerce and Graduate Diploma in Applied Finance and Investment.

In 2014, he founded The Currency Shop to help people compare exchange rates so they don't get ripped off.

It can be cheaper to buy your currency abroad rather than at home, but it depends on your holiday destination.

We found that you could lose up to NZD $206.50 when exchanging cash at a money changer in store.

For most people going on a trip, getting currency exchange in cash is typically the most common method to take money overseas. But what if you have a bank account in the country of your destination? Whether you are going overseas for a long holiday, or you are planning to spend a couple of months traveling, this article will help you discover which option will help you save money.


Which option is cheaper?

In most cases, it is much cheaper to transfer money into a bank account that converting it into cash. This is particularly true if you avoid the banks and use a company like TransferWise or OFX.

This is because the exchange rates for electronic transfers are usually better.


When a money transfer is cheaper

Although it is cheaper to transfer money overseas than exchange foreign currency in cash, this method may not benefit everyone. You will benefit from a transfer if you are:

  • Traveling with NZD $5,000 or more
  • Have a bank account in the country of destination you can transfer funds into


Patrick and Sarah are from UK. They moved to Auckland three years ago and left their bank account active back home. Every year they take a trip back home to visit family and need to exchange NZD to GBP.

Recently, they discovered that they received more British Pounds if they used an online provider like OFX to send money to their UK bank account.


How to get the most out of money changers

If transferring money abroad is out of the question for you, here are some tips that will help you get the most out of money changers.

  • To get a better rate, order your currency online and collect in person
  • Money changers tend to sell popular currencies at a better rate. These include US dollars (USD), Euros (EUR), Japanese Yen (JPY) and Australian Dollars (AUD)
  • If you are buying more than $5000 worth of currency, you can negotiate a better rate
  • When buying a exotic currencies like AED, FJD, MYR, etc, be sure to call and check if they have stock
  • Try and avoid exchanging currency at the airport


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