Complete Guide To Getting The Best Foreign Exchange Rates At The Money Changers In Singapore

No matter which travel survey you read or friend you speak to, it seems like Singaporeans are always planning their next holiday. As some of the world’s most frequent travellers, Singaporeans are definitely making good use of the world’s strongest passports!

As part of our travel plans, we are always on the lookout to get the best bang for our Singaporean bucks. That’s why knowing how to get the best exchange rate at money changers in Singapore is an essential piece of knowledge.

Here’s where, and what we should think about, to get the best exchange rates.

The Best Money Changer In Singapore

Anyone travelling overseas will want to know where the best money changer is. In Singapore, several money changer locations have built a reputation for offering the best rates. They are:

– The Arcade at Raffles Place;
– People’s Park Complex; or
– Mustafa Money Changer

While other articles may cite other locations, these three are generally included in most lists. One of the reasons they can offer the best exchange rates in Singapore may also be attributed to their busy locations.

A popular location to change money typically translates into higher volume for the money changers, which also means they can afford to offer better rates. Busier locations also attract other money changers, and more competition simply means that the money changers have to offer more competitive exchange rates.

Read Also: 8 Things You Need To Know Before Heading To The Money Changer

Where To Get The Best Exchange Rate For Popular Currencies?

We look at the best exchange rates for 10 countries that are frequented by Singaporeans as well as three other popular currencies (bottom 3 in the table).

Source: Cash Changer

As we can see, the majority of the money changers on the list of most popular destinations and currencies are located in central areas, including Raffles Place and Orchard Road. There are also a few money changers that are located in the heartlands.

Do We Look At Buy Or Sell Column When Changing Currency?

If you are confused whether to look at the buy or sell column when trying to exchange money, ask yourself this question: am I buying or selling the foreign currency? The answer: you are the buyer of the foreign currency, which makes the money changer the seller of the foreign currency. Therefore, you should look at the “sell” column for the rate that applies to you.

HOWEVER, if you are overseas trying to exchange your home (foreign) currency into the local currency, you become the seller of the foreign currency, and the money changer is the buyer of your foreign currency. Hence, you have to look at the “buy” column when exchanging your currency.

In short, when you look at the board, think about it from the money changer’s perspective.

Read Also: Changing Money For Your Overseas Trip? Here Are 5 Tips To Get The Best Foreign Currency Exchange Rates

Is A Higher Or Lower Exchange Rate Better?

A higher exchange rate is generally better as we get more for our local currency when buying. This means we can get more of the foreign currency for our local money.

On the flipside, a lower exchange rate is better if we want to exchange foreign currencies back into local currency after our overseas trip. This means our foreign currency is worth more, and we get more local currency as a result.

How Do Money Changers Make Money?

If you have exchanged money, you would realise that the buy and sell figures are never the same. In some instances, they can even be quite wide. This spread between the buy and sell columns is how money changers typically earn money from us.

This is why money changers at busy locations can afford to offer us a better rate, as they would still be profitable based on the volume of money that is transacted. Money changers in less busy locations may need to earn more per transaction for this same reason.

Money changers also take on foreign exchange risk when they complete transactions. Hence, they will be more willing to earn less for currencies that are popular and transacted in higher volumes, such as the Malaysian Ringgit, Thai Baht, Indonesia Rupiah, Hong Kong Dollar, and tend to want to earn more for taking the risk of holding currencies that do not trade as frequently, think of the Danish Krone, Croatian Kuna, Congolese Franc or Mexican Peso.

In many instances, money changers in Singapore do not offer these obscure currencies in the first place, as they will have low volumes and need to take on much more foreign exchange risk by holding the currencies. One tip if we are travelling to countries that use less popular currencies is to always convert our SGD into USD before our trip, and then convert the USD into the obscure foreign currency once we arrive at our destination. Trying to change the SGD into the local currency once we arrive at our holiday may lead to very poor exchange rates (as our SGD may be deemed obscure to them).

When Is The Best Time To Change Money?

There are several ways to determine when is the best time to exchange money.

#1 Depending on the country you visit, the best time to change money could be when you finally reach the country

As mentioned, if we are visiting a country that do not attract high volumes in Singapore, we may get a very bad deal. This does not mean we wait till we reach those countries to exchange our money, as our Singapore dollars would be equally low in demand in those countries. We should exchange our Singapore dollars into a global currency such as the US Dollar or the Euro before heading to those countries.

Read Also: Should You Change Your Foreign Currency In Singapore Or Overseas?

#2 Try to avoid exchanging money on the weekends

During weekends, forex markets are closed. This means money changers will use the last available quote they have on Friday. Since there may be risk of the currency opening at higher or lower rates on Monday, money changers also typically factor in a mark-up for the increased risk that they take on.

However, in general, foreign currency cashflows over the weekends alone would not induce major fluctuations when forex markets reopen on the Monday.

#3 Monitor currencies over a period of time

If we are aware of our travel schedules beforehand, we may want to monitor foreign currency exchange rates over a period of six months to determine if we will be receiving a good or poor 6-month average rate.

Once we notice that the current exchange rate is higher than the 6-month average exchange rate, we can make our currency exchange, or a portion of our currency exchange with the rest right before we travel. This way, we can lock in potentially better exchange rates in advance.

Read Also: Exchanging Money Before A Trip: Why You Should Consider A Dollar-Cost Averaging Approach Before A Big Holiday

Problems With Exchanging Money Physically

Travelling can be a very stressful affair, with the planning, buying of tickets, packing and eventually travelling. Worrying about exchanging our money in Singapore only adds to our long list of to-dos before we travel.

Carrying around large wads of cash while in a foreign land can also be stressful. We may need to declare these sums at the customs if we carry more than US$10,000 or its equivalent into certain countries. This may not be far-fetched if we are on a long European or US holiday.

Safety concerns are definitely another area we need to note. Not every country is as safe as Singapore, and carrying around large sums will only attract the wrong kind of attention.

Convenience is another matter – handling large stacks of money can be burdensome and make us stick out in a crowd (for the wrong kinds of attention).

Lastly, we also tend to overestimate how much we need while overseas. This is because we don’t want to be left short of money while overseas. This behaviour often leads to overspending or bringing home large quantities of foreign currencies (which either need to be exchanged at a loss or kept at home).

Where possible, we should try to use credit cards to cater for the emergency scenarios, as well as utilise multi-currency accounts (MCA) or multi-currency cards, such as YouTrip, to be secured and to travel cashless. We elaborate more below.

Should You Use Cash Or Credit Cards When Travelling Overseas?

There are pros and cons to using credit cards while overseas.

Why you should use credit cards overseas:

As mentioned above, credit cards give you the flexibility of an emergency fund without attracting the wrong kind of attention holding large wads of cash overseas.

Credit cards also help us to keep track of our overseas transactions, and flag it to our credit card companies, the authorities and even insurance companies for instances where we are pressured into making a large transaction overseas.

We also enjoy certain credit card perks by charging expenses to our credit cards. Some cards tend to offer better incentives for overseas spends as well, such as the which gives additional points or miles for each dollar spent overseas.

Read Also: Is Using Card Over Cash Always More Expensive When Travelling Overseas? We Travel To Europe To Put This Theory To The Test

Why you should NOT use credit cards overseas:

Many of us don’t realise that our credit card companies typically charge us double conversions for our foreign currency transactions. First, our overseas transactions will be converted into US Dollars, and then, it will be converted into Singapore Dollars when billed to us.

The actual conversion rates we are charged may be very poor as well.

On many credit cards, we will be charged a foreign transaction administrative fee whenever we use our credit cards overseas.

Storing Foreign Currencies In A Multi-Currency Account

Instead of using credit cards as our emergency funds, we can also choose to exchange our money in a multi-currency account, and use accompanying cards and/or apps to make transactions overseas, in foreign currencies.

We can also exchange money on-demand, which means we will be able to avoid exchanging too much or too little. As the money is stored in our accounts, that we can access digitally, it becomes a more convenient and safe way to travel.

Read Also: Complete Guide To Multi-Currency Accounts And Wallets In Singapore [YouTrip, Revolut, Wise, DBS My Account, UOB Mighty FX And More]

Multi-currency accounts (MCAs), such as the DBS MCA and the UOB Mighty FX, can be used to make foreign currency exchanges online, via the respective banks’ platform. We’ve done this with both the DBS MCA and the UOB Mighty FX, and received relatively good exchange rates compared to money changers. We can make transactions online and via a linked card with the banks.

We can also use non-bank multi-currency accounts such as YouTrip, Wise and Revolut for a similarly competitive and seamless experience when spending in foreign currencies. Moreover, these cards do not incur unnecessarily hefty administrative or foreign currency charges when we spend in currencies that we cannot store in their either. Majority of these multi-currency accounts and wallets enable us to spend in over 150 currencies globally.

Read Also: Step-By-Step Guide to Getting And Using A YouTrip Card For Your Next Holiday Or Shopping Online

Thin Margin is an online money changer licensed by the Monetary Authority of Singapore (MAS). The company offers a unique service – allowing you to make foreign currency exchange online, via payments with PayNow, bank transfers or NETSPay, and letting you choose the time and date for the currency to be delivered to your doorstep.

The company claims to offer “thin margins”, which means it makes very little money from the transactions, and saves you crucial time and energy by sending your foreign currencies right to you.

You can also refer to this handy infographic we created to guide readers in getting the best foreign exchange rates: