MasterGeek

Which Canadian banks don't add a 2.5% (hidden in the exchange rate) when withdrawing using a debit card ?

I know that Tangerine and Desjardins don't

airoli

I find the effective forex rate I get when using my TD debit card at ATMs overseas to be much better than any other way to obtain cash. There are no visible access / transaction fees.

A credit card without foreign currency fee may still be the better deal for any transactions that you can make by card, but for getting cash fee-free debit card at foreign ATM is hard to beat.

Note that some countries have ATM access fees imposed by the local bank(s) on all foreign cards. Chile comes to mind.

Ocn Vw 1K

I created a new thread for the above posts, rather than leave them in a much older thread which would likely no longer have reliable information due to the many changes in banking and card benefits. Ocn Vw 1K, Senior Moderator.

Jay71

I didn't think one could get around the 2.5% fee embedded in the exchange rate. Are you able to provide a link to the details around Tangerine and Desjardins avoiding the 2.5% interbank forex fee?

B407

I bank with tangerine and have withdrawn cash abroad several times. I have not reviewed their full terms and conditions but I haven't noticed any significant markup on the amount that comes out of my account when withdrawing foreign currency.

MasterGeek

All I got was verbal confirmations over the phone or through facebook that the international debit withdrawals with the above two banks don't carry a 2.5% foreign currency surchage

eigenvector

I bank with Tangerine and when I withdraw abroad the rate always works out to almost exactly 1.5% worse than the rate you'd find on XE.com or Google. There is no free lunch, nobody gives you the same rate withdrawing $20 at an ATM as they do buying $1000 online and transferring it to a bank account.

MasterGeek

Isn't Tangerine, by its use of the Cirrus (Mastercard network), using the same exchange rate published by Mastercard in the link below ?

https://www.mastercard.com/global/currencyconversion/

If Tangerine adds a 1.5% fee or similar on top of this without clearly disclosing it, then there might be matter for a class action lawsuit.

Jay71

They've all beaten me into submission.

I've gone into the branches of the banks I've banked with and could never get a get an answer I felt clear and confident with.

It's obviously a topic of interest. I've got to see if I can find a line item in the access card agreement referencing foreign atm withdrawals now, like there is for cc's.

eigenvector

On July 13th I withdrew 200 USD from a Bank of America ATM using my Tangerine debit card.

According your calculator, with 0% bank fee, on July 13th 200 USD = 255.40 CAD. On my Tangerine statement, I was charged 261.79. That's exactly 2.5% difference.

MasterGeek

I just checked my Tangerine statements for some debit cards ATM withdrawals back in December 2016 and January 2017 and it the rate used by Tangerine was somewhere between 1.5% and 2% over the Mastercard official exchange rate

airoli

So, are there better options to get foreign cash? What would it have cost you to get USD200 in cash at a bank in Canada or the US? Certainly, a cash withdrawal using a credit card would be worse...

And edited to add: For CAD - USD, the spread on cash exchange rates may be relatively small due to volume. But when I get SEK, TRY, ILS etc. I struggle to imagine there would be more favorable options than debit card at ATM in destination country...?

eigenvector

I think it's still a pretty good option. The rate is better than what you'd get at a retail bank or exchange counter and there are no per-transaction fees (at least in my example). Where it falls down is countries that charge huge scam fees to foreign debit cards - India, Thailand and the Philippines come to mind. So if you just need a small amount of local cash for emergencies it becomes way cheaper to use an exchange counter or order it from your local bank at a poor rate but with no fixed fees.

For currencies you use frequently, such as USD for Canadians, one option is to open a free USD savings account at a Canadian institution (RBC and Tangerine both offer them), buy your USD in bulk through an online forex trader like XE or Knightsbridge, then withdraw cash before you leave home. This will pretty reliably save you 2%, but is probably only worth the hassle if you're using several thousand dollars worth of US cash per year. For pocket money here and there, it isn't worth the time IMO.