Money Hack: How To Become Your Own Money Changer?
Are you planning to change a larger amount of money from SGD to another currency (or back)? It may be actually more worth it if you take on the role as a money changer instead.
This article serves as a good strategy when you are changing a sum usually in the range of 2-3k SGD and beyond to be worthwhile. If you are changing just 200 to 300 dollars, it easier to just head down to the money changer or if you are buying online, consider using RateX, another local startup. After reading this, you can actually become your own money changer and officially change for your friends and family members and charge them market rate.
A big difference between Google vs Money Changer vs Banks
Banks and Money Changers tend to have a large spread (the differences buying and selling price of a currency). It is illustrated here in this table below, In short, we would really save tons of money if we can change money at FOREX exchange (Google Rate). You can refer to the screenshots also in the appendix at the end of the article.
|Google Rate||Money Changer Rate||Bank Rate|
|You Buy||1 USD||1 USD||1 USD|
|You Pay||1.360 SGD||1.365 SGD||1.373 SGD|
Here’s what you need:
- DBS Multi Currency Account
- DBS Visa Debit card (for online purchases)
- A broker that allows you purchase foreign currency as well as allows you to deposit foreign currency
Step 1: Convert your currency at your brokers
I personally use Interactive brokers for this step. I am pretty sure brokers like SAXO could do the same too. Do take note of their transaction charges at this step as it could eat into your potential savings. Interactive brokers charge about $0.5 to $1 for my transactions.
Step 2: Deposit them into DBS Multi Currency account
You will want to deposit a lump sum into this account instead of tiny bits and pieces as DBS charges $10 for all incoming Fund Transfers.
Step 3: Use DBS Visa for online purchases or over the bank counter to withdraw your currency
If you are withdrawing cash from a branch, try to give them a call before heading down as they tend not to keep too much foreign currency on their desk. There is no charge for withdrawing at the counter for this account.
Potential Savings (Google Rate vs Others)
As seen in the table below, the savings become more evident and only make more sense when you go into the region of $2 to $3k and becomes more pronounced further with a larger amount.
Further Reading: SGD to USD Experiment Screenshots
(All data was captured on 7 August at 8:47am)
1) FOREX Market (checking on Google)
I would buy 1USD with 1.360 SGD.
2) Raffles Money Change Pte Ltd Singapore
I would buy 1USD with 1.365 SGD.
3) Bank and Cards Rate
I would buy 1USD with 1.373 SGD. Oh, we don’t even want to think about bank rates and visa rates those are the most horrible of them all.
Seedly Community Contributor: Jefferson Soh
Jefferson is the owner of The Cat Cafe Singapore. In his free time, he writes about being financially savvy in Singapore and interesting ways to save money on this little red dot. You can follow him on his blog also to learn more about such tips!
Editor’s note: This was a really insightful article by Jefferson who is a part of our Seedly community. You can find out more about what we believe in our Seedly Money Framework where we advocate users to get better at managing their money by themselves!