Was somewhat taken aback at the spreads on forex when I went to bank my recent batch of Aussie dividend cheques at National Bank. Seems that recent pressures in the financial sector have led them to find new ways to turn in a profit...
When I first moved to NatBank (just prior to the ANZ acquisition) I was happy to note their spreads on forex seemed quite favourable at around 0.01 on the AUD:NZD from memory. After that, they seemed to widen a little bit and more recently seemed to be somewhere around 0.015. But at todays sell rate of .8285 and "buy cheque" rate of 0.8528 that's a surprise 0.0243 spread!
Anyone else noticed if other banks have been pulling the same move? Any suggestions for a better option without going custodial or setting up an Australian bank account?
NZ Banks & Greedy New Forex Spreads
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29-04-2008, 08:53 PMLizardNZ Banks & Greedy New Forex Spreads
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29-04-2008, 10:09 PMHalebop
I rarely transfer funds from one country to another so don't get to enjoy the burn of my bank that often. It did raise my bile a bit to see either the bank or the credit card company made 5%(!) on some recent $A credit card purchases (I guess if they had to share the spoils that gets them both closer to your 2.4%).
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29-04-2008, 10:19 PMHalebop
...Don't quote me but pretty sure Computershare at least can arrange direct debit of dividends for Australian companies to New Zealand holders. I know as a former staff shareholder I had this arrangement but not sure if it was because I was staff and the company was large? 'Course the actual exchange rate used might make this a moot point anyway...
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29-04-2008, 10:50 PMSnoopyA near 2.5c spread on the NZ/OZ dollar? Ouch!Quote:
Originally Posted by Lizard
I have an interest paying account with E-trade Australia (who ironically are owned by the ANZ bank now I think). E-trade opened it for me when I wanted to buy some shares with them and I needed somewhere to post my money to so that I could make that Oz purchase. It turns out you can have Oz dividends paid directly into that account. I am doing that with one small Oz shareholding I have. It works if you want to use the dividend money to buy more Australian shares. Of course if you want to get your money out of there back to NZ this solution doesn't solve the problem.
You might have to get creative. Go to Oz and set up a debit card account ( I think Westpac do this). Get your dividends direct credited into that. Then you can ring up expenses in NZ on your Australian card and they will be converted to Oz dollars at the Australian currency conversion rate which I think is 1.5% - thus 'saving' you 1%. I asked about setting up a Westpac account in Sydney around four years ago. At that stage all they wanted was a passport for ID, IIRC.
Some companies, for example Telstra and CSR, have dividend reinvestment schemes which means you just get more shares rather than dividend cheques. It doesn't absolve you from any tax liability though, even if it does save you the exchange rate fees.
Other Oz companies will pay dividends in NZ dollars directly into NZ bank accounts. Woolworths has just started to do this and I think Lion Nathan does it too, as does Westpac. Of course they still have to convert that money 'at the bank'. But as a multi-million dollar business, they may be able to negotiate better rates than you or I can. I have to admit when I work out what the actual conversion rate is for actual examples in my case, it never *seems* very generous. But I have to admit I have never double checked what the bank rate was on the actual day of dividend payment and conversion to see if I would have got a better deal by taking in an Oz cheque and doing it myself!
Just a few ideas from someone else that doesn't like to be 'currency gouged'.
SNOOPY