Where to get the best currency exchange rates

March 28, 2024

If you are heading on a trip or have personal or business needs for foreign currency, you’ll need to decide where to get the best currency exchange rate near you. There are a few options for foreign exchange, including your financial institution or bank, which in Canada could be CIBC, RBC, or TD Bank. You can also choose an FX broker or full-service currency exchange partner like Vancouver Bullion and Currency Exchange (VBCE).

Canadian banks will offer their customers currency exchange services for a limited number of currencies. However, banks don’t give the best rates; instead, they focus on promoting services to their bank customers. Not being aware of the rate difference can result in losing money in the transaction, which most people overlook the first time until they realize they could have gotten a stronger rate elsewhere. Then, bank customers tend to stop converting funds at their bank.

Banks won’t offer a publicly available currency converter, as this would highlight the poor exchange rate. New services such as currency exchange credit cards or debit cards focus on “convenience” and not the best exchange rates, charging transaction fees; the process is not transparent. If you want the best currency exchange rates in Canada, look outside the banks.

At VBCE, we offer multiple ways for customers to get the strongest exchange rate.

1. You can walk into one of our four branches (Vancouver, South Granville, Richmond & Burnaby) and speak to one of our customer service reps who have experience in one-time transactions, currency exchange for over 80 foreign currencies, money transfers and international bill payments.
2. You can call and speak to an FX Trader to get a quote and discuss any transaction involving foreign funds for individuals or businesses, including international money transfers, foreign wire payments, property management abroad, or international purchases/sales. They have expertise across industries and individual needs.
3. If you have regular and recurring transfers, you can sign up for our VBCE Online platform to manage the quote and transfer process. You can transfer funds to and from your Canadian bank account. Setting up and transferring funds is very easy, safe, and secure.

Ease of currency exchange transfers

Our customers say it best when sharing their experience with stepping outside of their bank and finding ways to save. Devyn P. shares on Trustpilot why they chose us, “I chose VBCE because their rates were the most competitive I could find for USD to CAD. Pleasantly surprised by how easy it’s been to convert into CAD whenever needed. Also, any time I’ve had to contact them, their customer service has been outstanding. Better rates and better service than I’ve ever gotten from my typical bank experience. I’d gladly recommend them to anyone needing FX services! “

So, how does a currency exchange service work?

The process of exchanging foreign currency is straightforward. There is a live FX market from which rates are derived; similar to the stock market, the rates can fluctuate minute by minute. Since you can’t purchase directly from the market, you must use a third party to book a trade. For example, if you need Canadian funds to transfer into US Dollars, you need a firm to help make the transaction. Your bank or broker will make the transfer on your behalf.

Who you choose to work with for the transaction determines the exchange rate you receive and the fees you pay. First, you need to share the amount you need, and then a live market quote states the rate at which the money will be exchanged. At this point, you can observe the difference between a bank and a firm such as VBCE in the quoted rate, as the spread for the transaction is determined at this point.

The spread is the difference between the market rate and what the firm will offer you; this is where a cost built into the buy (bid) and sell (ask) price is determined for the currency pair traded. A narrow spread is better since you would get more in your pocket from the transaction. At VBCE, we offer narrower spreads than the bank, up to 3% more in your favour. If you are transferring $10,000, that is a $300 savings for you, meaning you would get $300 more if you transferred with VBCE instead of the bank. That is a big difference and is why people prefer to use a third party for their exchange needs.

The local banks want to keep that $300 for themselves and know their customers don’t realize the difference, while VBCE provides value to its customers by beating the bank each time. With over 5 billion dollars in annual transactions and 30+ years in business, VBCE has built its reputation on serving customers who want to get more from each exchange and are savvy about keeping money in their pocket.

We mentioned before that banks don’t post their exchange rates because they determine the rate within their organization to achieve the highest profit for the bank; this doesn’t allow you to compare since it isn’t transparent. You get what you get with a bank. Firms such as VBCE post their rate, and while our currency converter tool on our website and in our branch window will share the retail exchange, it is just to reference as an indicator as the market rate changes all the time and is based on an average transaction volume. You can ask a Trader about large volumes, and you can even share the rate you are looking for. The FX trader will let you know once you reach your desired rate.

Using your bank account for foreign currency exchange

There are several ways to transfer funds, one of which is electronically, which is a free service we offer. Once we’ve set up your account, you can decide how best to transfer funds based on the size of the transfer and where it needs to go. For electronic transfers, let’s say you have a bank account at CIBC, a regular Canadian funds account, and a USD account at CIBC. At VBCE, we can debit one account, exchange it for USD at the rate you approve, and then transfer the exchanged USD into the USD account at CIBC. This can be done via phone, email, or even on our online platform. For free! More about online, personal or business accounts.

The first step is to give us a call or send an email. We will reach out and gather the required info and set you up with an account, we then verify the information, and, once complete, help you with your currency exchange needs. Because we are a FINTRAC-regulated firm, we must know who our clients are based on the Canadian government's Know Your Customer (KYC) compliance; this is the same process as opening a bank account and is required of all currency exchange firms.

We hope you found this article helpful and informative. Our goal is to help Canadians get more value from their currency exchange, and we work with individuals and businesses as they navigate their foreign payments, travel, and income needs.

About VBCE

For over 30 years, customers have been the heart of our business. Through our retail locations and VBCE online platform, we handle over five billion dollars in transactions annually. Read how we became the leading Canadian private foreign exchange company in Western Canada.

We are active in our community and are proud long-term supporters of the Canadian Liver Foundation, sharing their vision of a world without liver disease. We help raise funds and awareness throughout the year to help meet their mission.