Personal Finance

What's the cheapest way to be paid in foreign currency?

  • Last Updated:
  • Dec 15th, 2013 2:01 pm
Nov 3, 2011
15 posts

What's the cheapest way to be paid in foreign currency?

In case my title is unclear, here's the situation. My spouse will be working outside the country for a few months, and being paid in British Pounds (GBP) by the British government. As far as I know right now, they send her pay in GBP to her RBC $CDN account, so I assume the conversion to CDN is handled by RBC. This is not a small one-off payment, but regular income.

When I checked RBC's rate just now, it appears they're charging about a 2.9% overhead based on the fact that XE's rate is 1.74 and RBC's is 1.69: (1.74-1.69)/1.74=2.9%.

Now, I'm wondering if there's a better way for her to get her payment from GBP to CDN?

I've had a few thoughts, but never tried any of the following. The options I've considered:

1. Look around for a bank with a better conversion rate on their CDN accounts. I assume most major banks will be comparable to this, but if there is a bank with unusually low rates, I'd be curious to hear about it.

2. Open a GBP account with a bank here in Canada (I hear HSBC has one) and have the money deposited there, then convert through a currency conversion place like XE or Calforex that offers a better rate. I don't know what's involved in this and if it actually works out cheaper.

3. See if any bank will offer a better preferred rate when you're regularly converting large-ish sums, which will be the case for her.

If anyone has any experience from a similar situation, and can offer insight on any of these options, or suggest a better alternative, I'd love to hear about it.

8 replies
Deal Addict
Jan 11, 2004
1277 posts
Option 2 is what I do.

This way you can control when and how much is converted.
Deal Addict
Jul 15, 2009
1614 posts
Is opening a UK bank account an option? Then you could do the conversion and transfer very cheaply with CurrencyFair (even cheaper than XE).
Deal Addict
User avatar
Apr 1, 2006
3370 posts
Open a UK bank account and use or I've used both and the rates are very good. I transfer EUR to CAD and EUR to AUD regularly. Set it up ASAP though since it takes some time.
Sr. Member
Jun 3, 2012
571 posts
Opening a bank account in the UK s not that easy, and will be more difficult if she is only going to be there for a few months.
Deal Addict
User avatar
Dec 8, 2010
2418 posts
HSBC have high requirements for account minimums, I think.

Maybe talk to Nationwide: ... nstant.htm (Nationwide is the UK's last real building society; you probably won't be able to open a UK-based bank account with them, but this section is specifically for expats etc).
Deal Addict
Feb 25, 2007
1190 posts
If your career/life is making you a "global citizen", and you have $100k+ in assets that you could move under the HSBC roof (including any investments you self-manage that you could move to HSBC's discount brokerage), then HSBC Premier service is your best bet. They will help you open accounts in multiple currencies and different jurisdictions, and then you can easily move money back and forth on-line with their Global Money Transfer service. If you clump your transfers together and ask your bank contact, you can reduce the forex transfer costs to under 1%. And you pay no fees on nearly everything including use of non-HSBC ATMs. It's not banking nirvana: They are actually somewhat substandard in their overall customer service, and the discount brokerage website is about 5 years behind the times, but if what you describe is going to be regular for you esp. beyond this one contract, then you may save quite a bit of $$$ by going this route. If you don't have the $100k+, then it's probably not worth it to bank with them.

Irrespective of who you go with, the more you can manage your cash flow to do forex conversions on bigger amounts more rarely, the less the forex penalty you can can achieve.