Why You Don’t Use Your Bank for Foreign Exchange

To prepare for my trip, I just exchanged some dollars for euros at my local bank. While we own euros in one of our investment accounts, I needed cash and there was no easy way to actually get cash out of that account.

symbol showing bank with a prohibited crossI figured I’d get a bad deal, but it was worse than I expected. On a day where the mid-market rate for euros was in the 1.105 range, I had to pay 1.145 at the bank. That’s a fee of about 4%.

I’m glad I have a better way to do it for large amounts. Working through my investment advisor and Fidelty, we pay only 0.3%. I think we’d only pay 1.0% on a smaller amount.

Next time, I’ll see if I can do an exchange and get euros in cash through Fidelity.

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