Going abroad? Where to buy Foreign Currency?

Soon thousands of Israelis will be traveling abroad for their annual vacation and will need to buy foreign currency.  Most of us look for the nearest exchange to buy foreign currency abroad or to convert the foreign currency to shekels and receive it on the spot. Some of us will still go to the bank even though most surveys prove that the currency exchange in banks is the most expensive in the country and there are also those who will prefer the mail which is considered attractive.   

The question of buying foreign currency usually arises mainly before the planned trip abroad. Although it is possible and even advisable to take an international credit card with you, it is always better to fly with a certain cash budget that can be used by you both for small purchases and in cases where the business does not accept other types of payment.    

Buying foreign currency through the bank: advantages and disadvantages

 Banks are still considered the safest and most reliable (and most convenient) place to purchase foreign currency, although this is the most expensive option. The clerk’s fee for performing the operation is 0.18% on average, unless you managed to lower it. The minimum fee for withdrawals is a few thousand stands at approximately 7 dollars. And another reason for the banks’ disadvantage is the exchange rates.  When buying, the rate will be higher and when selling (when you want to get rid of the foreign currency and convert it to NIS) you will be charged in addition to the usual fee in a clerk’s fee, which may amount to more than 1%. 

Please note that if you withdraw foreign currency through the bank’s ATM, you will be exempt from the clerk’s fee, but you will not be able to withdraw a currency that is not dollars or euros in most cases.  Make sure that you use ATM machine that belongs to your bank otherwise, you will be charged commission.  

Buying foreign currency at the Post Office Bank: is it worthwhile?

The Post Office Bank does not have commission charges and its conversion rate is usually better than the banks. If you ask to buy or sell a few thousand you will get an additional discount on the conversion cost. The post office also allows you to purchase foreign currency using a credit card with an option for payments but limits you to $2,000. Although this is extremely convenient, it involves a fee to your credit card company.    

CHANGE: still the most popular

Change Shops are the most popular option in Israel. Here you buy the foreign currency by handing over the cash or through the credit card with an option to split it into payments. Although there will usually be no commission here, it is important that you know that the conversion rate is several cents higher than the rate of exchange. That is why it is worth reviewing several exchanges, negotiating and accepting from them accurate rates before making a decision because every penny can count. It may seem like a small difference but can be very cost-effective when it comes to large sums of a few thousand or tens of thousands. 

The exchange branches compete with each other and if you get to a place where there is a large concentration of money changers, you can get a discounted commission and premium. In addition, the larger the amount, the better the rate that will be offered to you. 

Please note that although the exchanges are under supervision, it is still important to make sure that it is an authorized business with a valid license from the Ministry of Finance.