Did you search for today’s exchange rate on Google and later notice how it differs between banks, exchange stores, and online platforms? You’re not alone in wondering why these differences exist. In this blog, we’ll explore why rates vary, how to compare them, and finally give you expert tips on how to pick the best forex provider to buy forex or send money abroad.
Also Read: The Secret Behind Who Determines Exchange Rates in India
Why Does Google Exchange Rates Vary from Providers?
If you search for the exchange rate of a currency, Google shows the mid-market or inter-bank rate. Mid-market rate is the average of the buying and selling rates used in currency trading among banks. However, retail customers typically do not get these rates because forex providers add a profit margin, known as a markup, to cover their expenses. Some providers claim not to apply a markup to attract customers but instead charge numerous fees.
Why Does Exchange Rates Differ Among Providers?
Banks
Banks often add a significant markup to cover purchase, operational and infrastructural costs and generate profit. This markup can vary between public and private sector banks, where the latter charge more markup and additional fees. Since currency exchange is not the primary service/product for banks, they tend to have less flexibility in their pricing to pull in customers.
Money Changers
Currency exchange is the bread and butter for money changers. They adjust their rates based on the local supply and demand for different currencies, often allowing negotiation for customers. Cities in Punjab and Chandigarh have markets with multiple currency exchange shops close to each other. Therefore, they tend to offer competitive rates for widely traded currencies like USD and EUR, but their rates can fluctuate frequently depending on market conditions.
Exchange Counters at Airports
Airports are not just known for pricey coffee and snacks, they’re also infamous for charging exorbitant rates for currency exchange. They work at high airport rental costs and take advantage of travellers who need immediate currency exchange, resulting in higher markups and fees. Since travellers are in a last-minute hurry, they lose bargaining power and end up paying high.
Online Forex Providers
Online forex providers typically use real-time data of inter-bank rates and have lower operational costs due to their online presence. They tie up with forex companies and stores in India allowing them to offer competitive and transparent rates. However, few of them charge platform fees and convenience charges.
How to Compare Exchange Rates?
- Check the Inter-bank Rate
Keep track of the mid-market exchange rate from reliable information sources such as Google and ExTravelMoney. Knowing this rate can help you determine if a forex provider’s markup is fair.
- Buy Foreign Currency 3 Days Before Travel
Our forex experts always advise customers to purchase foreign currency at least 3 days before the travel date. This allows them to monitor the rates and avoid last-minute rush.
- Convenience and Trust
When focusing on exchange rates, also assess the trustworthiness of currency providers. Stick to RBI-licensed banks and avoid unlicensed money changers to reduce the risk of counterfeit currencies. That is why ExTravelMoney connects customers with RBI-authorised forex vendors.
Consider convenience features like online booking and home delivery as a factor worth paying for. Check reviews and verify whether the provider’s service quality is worth the charges.
- Currency Availability
Global currencies like US Dollars and Euros are readily available in the Indian forex market, often at affordable rates. In contrast, currencies from less-visited countries like Azerbaijani Manat, Sri Lankan Rupees, etc are classified as exotic currencies and typically come with a premium rate. Therefore, it is advisable to purchase widely accepted global currencies before travelling and exchange them in the destination country for better rates.
- Consider Forex Cards
Forex card is a wonderful alternative to forex cash as they are available at cheaper exchange rates. Single-currency or multi-currency forex cards are prepaid foreign exchange cards. Once the currency is loaded, the exchange rate is locked to cover you from rate fluctuations. Forex cards are accepted worldwide, and you can use them to pay for purchases or withdraw cash from ATMs while abroad.
How to Find the Best Exchange Rate?
What if I told you that you don’t need to compare forex rates yourself? At ExTravelMoney, our team of forex and outward remittance experts does it for you! Once you place an order online, we find the RBI-authorized forex providers near you, compare their rates, and negotiate on your behalf. This way, you can stay at home while we secure the best exchange rates and deliver your Forex product right to your doorstep.
Also Read: Simple Way To Find Money Changers Near You & The Best Exchange Rate
Ann Mariya Job is the Associate Content Writer at ExTravelMoney.com. Holding a Bachelor’s in Journalism, she excels in creating deeply researched, engaging, and crisp content. Her work helps readers understand the complexities of foreign exchange, overseas money transfers, and international travel.