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I'm based in the U.S., and have an overseas client that pays me via wire transfer.

I understand that the incoming exchange rate used by a bank will always be lower than the rate quoted on Google, but is there a disparity among major banks? Would there be a difference in rates between big chains like BoA, Comerica, and Citi?

If there is, what's the best way to compare rates? Should I just be calling a ton of banks on a given day and see what they quote?

  • Yes there would be. – Victor Jun 3 '14 at 23:23
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    If you want to fix a specific rate in the future, buy a FX futures contract. Only do it if you know how futures work. – DumbCoder Jun 4 '14 at 12:50
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In short as Victor mentioned, the rates for a pair of currency vary from Bank to Bank. Banks also give special rates if the amount to be converted is large. Unless you are receiving large amounts, hopping / shopping will not help.

If you are getting paid in USD, i.e. that is what is agreed between you and your client, then the client's bank would be doing the conversion. You are your Bank have no say in this.

If you have agreed to get paid in the local currency of your client, then depending on the currency it may still get converted by the sending Bank or in-between. Say for example you are to get paid in Indonesian Rupiah IDR, the client's Bank or its Correspondent would convert this into USD as IDR doesn’t get settled. If you are getting say GBP or EUR, then yes the conversion would typically be done by your bank.

However it typically takes 2-4 days SWIFT Wire transfers, i.e. from the time your client initiates the transfers to the time it reaches your Bank. And no you can't go shopping after the Wire has arrived. If you want to do it before then unless the amounts involved are large, no Bank would commit a rate to you.

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Interbank exchange rates are theoretically the same everywhere because it's an arbitrage free market. In practise though, the rate you get from your bank depends on your relationship with them. That is down the bank's discretion versus their competition.

A company like Kantox, who I work for, aims to improve all bank prices for SME corporates by allowing them to trade directly with another client, for a commission.

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