This might seem elementary for some, but whenever I travel overseas, and need to change a reasonable sum of money, it is better to change at a downtown money changer. The reason is that, they offer a smaller 'spread' between buying the S$ in exchange for (say) Thai Baht and when I return the remaining money can be sold back to the same exchange centre or similar for minimal loss.
For example, if I changed $1000 at today's rate, the Changi Bureau de Change gives me a rate of S$ 1 for BHT 20.8. So for $1000 changed, I would receive BHT 20,800.
If after my short trip, and I used only credit cards and changed back the BHT 20,800. The rate they 'buy' from me is BHT 25 for S$ 1. Hence, that 20,800 would change back to S$ 832.
I would have lost $168 in the process or $18.80 for every $100 I changed to BHT and did not spend. That's 16.8 %. A huge commission for the money exchanger.
The spread by the money changers in Changi is 25 - 20.8 or 4.2 ;
Look at the Thai airport, for every S$ 1000 I changed, I would get BHT 21,350. So when I left Thailand and changed back, the 21,350 would change (sell BHT to get S$) 21,350 divide by 22.75 or I get back S$ 938.
I would still lose S$ 62 per S$ 1,000 or S$ 6.2 per $100 changed.
But the spread is less 22.75 - 21.35 or 1.4
In this recent trip of mine, as I did not have the luxury of time (perhaps poor time management on my part), I bought Thai Baht at the Suvanabhum airport and sold Thai Baht on my return at the Suvanabhum airport before heading back.
What's the Best Way to Save On the Exchange Rate ?
Estimate as accurately how much I need tor the trip in cash.
Before going on trips, if need to change money, estimate as accurately how much you expect to spend in cash. If you spend up to 95% of the cash you convert, well then good for you. You needn't have to change back the money to your local currency.
Go to any money changer in town
(Chinatown People's Park Complex has many, little India too , as well as Harborfront).They should offer you a better exchange rate. That is more foreign currency to sell to you when you buy with your Singapore dollars)
Buy what you need for your trip
They should offer you easily BHT 21.8 to BHT 22 per S$
Choose the One with the Smallest Spread
Normally they will not post the spread so clearly on the electronic board, but the spread normally is way smaller than what the Bureau de Change or money changers offer to you at the Changi Airport terminals. Choose the Money Changer with the Smallest Spread. They are all quite competitive, hence the downtown changers will not deviate much from each other.
Return to the same money changer
Change money back to your S$ currency with the same exchange which offers smallest spread. This way you can pare the loss if you need to change back to S$ currency.
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