What kind of exchange rate are you getting when cashing a check?

[valbogyo]

This question is in regards to exchanging larger amounts, such as for a car or house purchase. Not something you want to go to the ATM for.

When you deposit or cash a US or Canadian check at one of the local banks, can you check on the rate of exchange before you get there? Is the rate fixed even before the check clears?

How far from the interbank rate is the exchange rate you are getting?

For example: The interbank rate for Canadian to Peso is 12.02

The interbank rate for US dollars to peso is 12.32

The exchange rate I received at a foreign exchange bank today, for Canadian to Peso is 11.88

How can I compare this rate, on line, with what I would get just cashing a check at Intercam? Does the rate change, depending on the amount of the check?

I think we had a similar post to this, about a year ago.... however the focus was on smaller amounts for day to day living, not larger amounts where exchange rates can make a huge difference.

[El Saltos]

To get the best exchange rate use wire transfer. For checks the best rates at at Intercam and Monex. Talk to them.

[AlanMexicali]

This question is in regards to exchanging larger amounts, such as for a car or house purchase. Not something you want to go to the ATM for.

When you deposit or cash a US or Canadian check at one of the local banks, can you check on the rate of exchange before you get there? Is the rate fixed even before the check clears?

How far from the interbank rate is the exchange rate you are getting?

For example: The interbank rate for Canadian to Peso is 12.02

The interbank rate for US dollars to peso is 12.32

The exchange rate I received at a foreign exchange bank today, for Canadian to Peso is 11.88

How can I compare this rate, on line, with what I would get just cashing a check at Intercam? Does the rate change, depending on the amount of the check?

I think we had a similar post to this, about a year ago.... however the focus was on smaller amounts for day to day living, not larger amounts where exchange rates can make a huge difference.

The exchange rate for larger amounts can be negotiated before you send the wire transfer. If not you might get the rate they chose which will be the most fees/percentage they can get, usually.

[Frijoles]

For example: The interbank rate for Canadian to Peso is 12.02

The exchange rate I received at a foreign exchange bank today, for Canadian to Peso is 11.88

Please tell us where and how you received this exchange rate. Thanks.

[kbleitch]

I received 12.1522 pesos = USD1.00 on 19 May at 9:00 p.m. when I used Wells Fargo's "Express Send" function to transfer funds from our WF account NoB to our Bancomer account here.

[traderspoc]

I use intercom for small checks to get best rate if account holder, they give a better rate.

large checks deposit investment account at multiva, always get a better posted rate

[Hernan Santiago]

Earlier this week, I deposited a check from my US bank into my Multiva checking account. The exchange rate is posted daily for Multiva clients. When I deposited the check on Monday it was 11.99. Today it was 12.00. Has been less than 12 for the last six months.

[valbogyo]

Please tell us where and how you received this exchange rate. Thanks.

I signed up with HiFx from the UK. I found this was best for Canadian to Peso, back in 2008. I only have used them three times, but I saved almost 900 dollars on the last transaction over what Actinver would have given me and more with what HSBC would have given me has I wired the money directly to my peso accounts there.

I use one called currency exchange online for Canadian to US.

[valbogyo]

Earlier this week, I deposited a check from my US bank into my Multiva checking account. The exchange rate is posted daily for Multiva clients. When I deposited the check on Monday it was 11.99. Today it was 12.00. Has been less than 12 for the last six months.

Canadian? If so, that is really good.

Edit: I am sorry... I see that was US. That does not seem very good to me.

[El Saltos]

The topic heading on this thread is incorrect, you can't "cash" a foreign check here.

[valbogyo]

I will open up a Multiva account next week. I will then have an actinver, multiva and hsbc account. I will check with all of them on my next transaction date and find out what rate they will give me, and what the difference would be for check vs wire transfer. I will let you know.

What I like about HiFX is that I can order pesos at 1 canadian dollar to 12.50 pesos, and if it hits that rate.... they send me email and I have two days to make the purchase. It beats having to check every day.

you can lock down a rate for future transactions.

[valbogyo]

The topic heading on this thread is incorrect, you can't "cash" a foreign check here.

Ahh. Some of my friends have accounts where they get cash immediately, though the check has not cleared. However, that is because they have deposits to secure the funds. Interesting.

[bournemouth]

The topic heading on this thread is incorrect, you can't "cash" a foreign check here.

Actually, you can cash a check at Intercam. Homeowners do not need to have funds on deposit but renters do.

[El Saltos]

Nice!

[valbogyo]

I received 12.1522 pesos = USD1.00 on 19 May at 9:00 p.m. when I used Wells Fargo's "Express Send" function to transfer funds from our WF account NoB to our Bancomer account here.

Look at post #7. Multiva gave 11.99, for a check, on the same date. Now... you can usually negotiate a better rate for large amounts. Imagine if you are talking about 20,000 dollars. That is a 3000 peso difference!

[privado]

I just went through this with Banco Patrimonial- Bancomer (Private Investment Bank) which gives people a lot more privileges if you have an investment and checking account

The Exchange Rate changes HOURLY according to the stock market- The daily rate posted on line at your bank does not change hourly as Money Market goes up and down throughout the day and could be lower at the close of the market

the posted rate is NOT GUARANTEED-you get the rate the market is showing at the end of the business day your wire transfer is deposited- Bancomer may receive the wire on Wed. afternoon-but generally if it is posted after 3pm funds show in your account BUT will not be available for cash withdrawals until the next business day.

If you deposit a US or Canadian Check in dollars (10,000.00) -It's free_ But, it takes 7 days for the bank to post the deposit to your account (even though they can verify your check in 24 hrs) US banks used to make you wait 3 days- Use a wire Transfer It costs now at B of A $45.00.

[El Saltos]

The exchange rate is not governed by the stock market, but rather the money market which is not related to the stock market. The exchange rate changes in real time. At my bank it's moment to moment. When I deposit a check I get the exchange rate AT THAT MOMENT. I'm not sure how it works with a wire transfer. A wire transfer from my investment firm in the USA costs me nothing.

[John Shrall]

The exchange rate is not governed by the stock market, but rather the money market which is not related to the stock market. The exchange rate changes in real time. At my bank it's moment to moment. When I deposit a check I get the exchange rate AT THAT MOMENT. I'm not sure how it works with a wire transfer. A wire transfer from my investment firm in the USA costs me nothing.

This is absolutely correct. You will get the best rate if you use a transfer mechanism which utilizes real time exchange rates. That's the way ATMs work. When a transaction is in flight between 2 currencies, switches like Cirrus or Plus assign the exchange rate at the instant they receive the message from one country and pass it on to the receiving country. That's why you can perform back to back transactions at an ATM and get debited a different amount. The same can apply with wire transfers.

If a bank or cambio is guaranteeing an exchange rate, they are setting buy and sell levels that guarantee them a profitable spread and is not necessarily in your best interests. Watch the USD/MXN rate on a site like Yahoo. For larger dollar amounts you should get fairly close to that rate.

I transferred about $30,000US via wire (no charge using Ameritrade) to buy a car and found that Bancomer used the real time exchange system. Last year I was going to buy a Mexican plated car to replace the US one because I was going inmigrado which ended up permanente. Turned out the used car only cost about $18,000 so the rest remained in Mexico.

[privado]

Privado quote

The daily rate posted on line at your bank does not change hourly as Money Market goes up and down throughout the day and could be lower at the close of the market

incorrectly said Stock in my first sentence

The exchange rate is not governed by the stock market, but rather the money market which is not related to the stock market. The exchange rate changes in real time. At my bank it's moment to moment. When I deposit a check I get the exchange rate AT THAT MOMENT. I'm not sure how it works with a wire transfer. A wire transfer from my investment firm in the USA costs me nothing.

Don't know of any bank in Mexico that does that - where are you depositing??

- Bancomer does not give you the rate on date of check deposit---but the rate on the date of posting to your account 7 days later and no access to funds during the 7 days wait time.- that was also my experience in US banks, as well but wait was 3 days -no wire fee- but 7 business days is just too long-- Even as a Platinum Customer at B of A they charge for out going wire but not incoming

[southland]

A related topic/thread was started on May 8th titled, Bank account here with ties to U.S. Bank?

I face a large peso transaction in the coming months: $1,500,000 pesos and the transfer will be approximately $120,000 USD.

Of course I would like control over the money once it hits Mexico so I will be opening a Mexican bank account. My Schwab brokerage account does not charge international wire transfer fees, but I suspect the receiving bank in Mexico will charge something to accept the transfer.

So here are the questions:

1. If I set up a U.S. based Bank of America account and set up a local Santander account, could I just online transfer the money to B of A stateside, and then online transfer the money from B of A to Santander here? Will that cut down on any extra fees? Has anyone does something like this?

See below More Liana's post on the May 8 discussion:

Posted 08 May 2013 - 09:07 AM

Banco Santander and Scotiabank (both in Mexico) have an agreement with Bank of America. I was able to open a Bank of America online account ONLINE--that is, without going to the USA to open the account. The exchange rate at Banco Santander when withdrawing pesos from my BofA account is better than any of the others and there is zero ATM fee and zero foreign exchange fee. Electronic transfers of funds between accounts is another big plus; if I need to transfer money from another foreign bank into my BofA account, or if I want to transfer money from my BofA account into another person's BofA account, it's fast and free.

2. Next Question. I do not want to pay 4% to change dollars into pesos. Another poster from the May 8 discussion mentioned Banamex USA and Banamex Mexico could reduce exchange rate fees. What exchange rate buy/sell percentage differences are people paying who need to turn USD into MX pesos? 4% would add almost $5,000 to the cost of the purchase just in the exchange rate fee.

Here is that post:

Your friend can contact Banamex USA and Banamex will overnight a package to him here to open an account. After the Banamex USA account is opened he can open a Banamex MX account and transfer money on-line from Banamex USA to Banamex MX. The exchange rate is reasonable and saves money over the usual exchange rates.

Banamex is owned by Citibank. There are other U.S. banks that have relationships with banks here or won MX banks.

I guess I am asking (like others) who has done these big peso purchase transactions, from dollars (U.S. or CDN) into pesos, and what was the best outcome? Thanks!

[John Shrall]

I don't know if this will help but last August I wired $35,000 from Ameritrade to my checking account at Bancomer. The exchange rate I received was almost the same as the international rate I found on Yahoo which at that time was a generous $13.31-1. The Ameritrade wire was free and Bancomer charged $401 pesos (about $30US at the time) plus $64 pesos IVA.

According to Yahoo the international rate on 8/31 was 13.3183 and I received 13.3166. I didn't make any special deal with Bancomer about the exchange rate. I was surprised and pleased at the outcome.

I do believe that a wire transfer will give you a much better exchange rate than a check. Wires are electronic all the way while the exchange rate for checks will be at the discretion of the person or committee processing the check manually.

[southland]

Thanks John. If you could indulge me a little more.

I went to Yahoo Finance Currency this morning and it gave me a rate of 12.5366 Mx pesos to the USD.

Then I went to Bancomer and it gave me Buy Dollars of 12.10 and Sell Dollars of 12.61.

If your transaction from last August were to occur today, what do you think you would get, how many pesos to the dollar?

Then I might have a follow-up question.

[southland]

I'll just post what else in on my mind.

Santander has $12.17 and $12.67. The same fifty centavos difference as Bancomer approximately or 3.9%.

When I go to the ATM at Santander, I almost always get some exchange rate in the middle between the two figures for my dollars buying pesos.

In today's example, I would not get the 12.5366 on Yahoo. Instead, I would get somewhere around $12.35 to $12.40. (I am considering the ATM user fee of 31.32 pesos and that factor is not involved.)

So, the ATM exchange rate experience is different from the exchange rate experience you described.

I guess I would like to know if you have any input on why ATM is different, ultimately to shed light on what figure I might hope to get. If I can get Yahoo posted rate or close, then managing the timing and execution on this becomes much easier.

I also wonder if I might bring in a week history of Yahoo currency rates to the banker at Santander or Bancomer and ask him or her if she could give me what my $120,000 usd would get me in pesos on those days. I guess that would answer much of what I want to know.

The whole thing boils down to a potential 2% delta on $120,000 being worth researching what to expect and how to proceed. The posted rates on Bancomer and Santander do not correspond with Yahoo but if Yahoo is closer to what gets used, that would be helpful and a confidence booster.

[John Shrall]

The posted rates at banks are the buy/sell levels that are set by the bank at unknown intervals in order to give them a profitable spread. Electronic transfer exchange rates are controlled by non-human entities and will almost always be closer to the international rate you see online than the posted rates at the bank or cambio.

Normally currencies don't fluctuate much day to day but it's always possible to get lucky or screwed based upon the moment your large dollar amount hits the realtime currency converter. I happened to get lucky as the days before and after were .10 - .20 less than the rate I ultimately received.

I really don't think the folks at the banks have a clue how this all works and will probably quote a rate somewhere between their posted buy and sell. I'm pretty confident that if you wired the money you'd get an exchange rate closer to the current 12.5366 you see on Yahoo than the 12.35-12.40 you find posted.

If you want to test it out, wire a smaller amount and check the results. If there is no charge for the outbound wire then the cost to find out would be that charged by the Mexican bank to receive the wire.

As a disclaimer, I used Bancomer to receive the wire and can't guarantee that another bank would yield the same results.

[phxfunguy]

Don't know of any bank in Mexico that does that - where are you depositing??

- Bancomer does not give you the rate on date of check deposit---but the rate on the date of posting to your account 7 days later and no access to funds during the 7 days wait time.- that was also my experience in US banks, as well but wait was 3 days -no wire fee- but 7 business days is just too long-- Even as a Platinum Customer at B of A they charge for out going wire but not incoming

That has not been my experience at Bancomer. I write US Wells Fargo checks to myself for deposit into my account and typically wait until I have $5000 US available for deposit as they call their banking center to get you the higher rate for amounts over $5000, usually about 35-50 centavos per dollar more. If you go to the desk banker for any amount less than that, they just initial your check and you get the rate in their system when you go to the teller window. The amount is not changed on the day the funds "mature," it is the rate and total printed on your deposit slip that they hand back to you. The funds are held for 9 full calendar days, so not available until the day after the date printed on the receipt. When they call for a rate for you, you need to go into the Preferred Customer line and get to someone quickly so the teller can enter the special code they get in time before it expires. That happened to me only once on a "slow-go" day and then I had to repeat the process for the rate which then was only a hundredth of a centavo different! Holding the funds doesn't bother me but unnecessary fees would like $45 wire transfers. We live so inexpensively here that I make the deposit only two or maybe three times a year, and I can plan ahead. I keep other funds available at Actinver for emergencies which can be transferred once a week on Thursdays for free to my Bancomer account. Moving $4000 US from Bancomer to Actinver to earn some investment interest typically costs me $4.70 pesos.