bluegill_04
New member
Some time ago I posted a query re ways of minimizing FX loss when sending funds from US-based banks (Bank of America) to foreign banks (South Korea in my case).
It seems there is no way to get around the below-market FX rate which really amounts to a fee. The USD-KRW rate started going up again (1USD = KRW1,319 last checked) so was getting ready to transfer funds, e.g., 7 million KRW to my local bank. That would have cost me $5,560.5, which is the 1,259 exchange rate.
https://preview.redd.it/8n66iwce2vk...bp&s=1ca9bf84988c39468235f2d556a9d10ab811f88b
That's 4.6% lower than the market. Now I understand it depends on how you define the market: I would assume these moneycenter banks do their FX operation live, so the real time rate approximates the market rate (1,319). I used a 2-day moving average, etc. and it still comes out to 4-5% below. There is no other "fee" charged by the local bank when this amount gets transferred (at least there wasn't the last time I did it).
Now there is another issue which I raised in my prior post: is it better to send the fund already converted (i.e., USD converted into KRW by Bank of Am) as above or send it as USD and let the local bank convert it? I was under impression you can save money having local banks convert USD into KRW since they are less "predatory." But that option isn't really available -- it always gets translated as shown below where I tried to send $5,000 and it gets translated at the same rate. What BofA means by sending USD to a foreign bank is just treating $5,000 as the starting point -- that's how you end up with an odd lot KRW amount since it gets converted at the same below-market rate.
https://preview.redd.it/n8aoo13r2vk...bp&s=89459376b1b818491b83153ca481c8b1367d25a4
Now I realize why my Korean friends told me the best way is to just "carry USD" through the airport (up to $10k) and do the conversion at a Korean bank with the largest FX operation. Any better way?
It seems there is no way to get around the below-market FX rate which really amounts to a fee. The USD-KRW rate started going up again (1USD = KRW1,319 last checked) so was getting ready to transfer funds, e.g., 7 million KRW to my local bank. That would have cost me $5,560.5, which is the 1,259 exchange rate.
https://preview.redd.it/8n66iwce2vk...bp&s=1ca9bf84988c39468235f2d556a9d10ab811f88b
That's 4.6% lower than the market. Now I understand it depends on how you define the market: I would assume these moneycenter banks do their FX operation live, so the real time rate approximates the market rate (1,319). I used a 2-day moving average, etc. and it still comes out to 4-5% below. There is no other "fee" charged by the local bank when this amount gets transferred (at least there wasn't the last time I did it).
Now there is another issue which I raised in my prior post: is it better to send the fund already converted (i.e., USD converted into KRW by Bank of Am) as above or send it as USD and let the local bank convert it? I was under impression you can save money having local banks convert USD into KRW since they are less "predatory." But that option isn't really available -- it always gets translated as shown below where I tried to send $5,000 and it gets translated at the same rate. What BofA means by sending USD to a foreign bank is just treating $5,000 as the starting point -- that's how you end up with an odd lot KRW amount since it gets converted at the same below-market rate.
https://preview.redd.it/n8aoo13r2vk...bp&s=89459376b1b818491b83153ca481c8b1367d25a4
Now I realize why my Korean friends told me the best way is to just "carry USD" through the airport (up to $10k) and do the conversion at a Korean bank with the largest FX operation. Any better way?