ATM Exchange Rate in Italy
Aug 31st, 2016, 05:01 AM
#1
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ATM Exchange Rate in Italy
Can anyone tell me if the exchange rate at a typical ATM in Italy will be the same as the published foreign exchange rate of the day? Or, does the local bank add an uptick? While at my local bank yesterday, I inquired about foreign currency and the bank's rate was .0644 above yesterday's published exchange rate + a $7.50 fee.
Thanks
Thanks
Aug 31st, 2016, 05:44 AM
#2
The exchange rate is not determined by the machine . . . it is determined by your own bank.
(You will ask the Italian ATM for € and receive € - no exchange/conversion is involved. How much comes out of you account is determined when your bank/system converts those € to $)
(You will ask the Italian ATM for € and receive € - no exchange/conversion is involved. How much comes out of you account is determined when your bank/system converts those € to $)
Aug 31st, 2016, 06:03 AM
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<i>ATM Exchange Rate in Italy
Posted by: LADYLYN on Aug 31, 16 at 9:01am
While at my local bank yesterday, I inquired about foreign currency and the bank's rate was .0644 above yesterday's published exchange rate + a $7.50 fee.</i>
That looks like larceny. Get a new bank or credit union. Here is an illustrated introduction to changing US dollars in Europe. http://www.enjoy-europe.com/exchange.html. Always use ATMs at banks for the best exchange rate.
Posted by: LADYLYN on Aug 31, 16 at 9:01am
While at my local bank yesterday, I inquired about foreign currency and the bank's rate was .0644 above yesterday's published exchange rate + a $7.50 fee.</i>
That looks like larceny. Get a new bank or credit union. Here is an illustrated introduction to changing US dollars in Europe. http://www.enjoy-europe.com/exchange.html. Always use ATMs at banks for the best exchange rate.
Aug 31st, 2016, 06:14 AM
#7
>>That looks like larceny. Get a new bank or credit union.<<
Changing banks won't likely help. That is pretty typical at most US-based banks. Either a bad exchange rate, or 'the official rate' but a high fee tacked on . . . or often both.
That is the main reason one should not buy foreign currency.
Changing banks won't likely help. That is pretty typical at most US-based banks. Either a bad exchange rate, or 'the official rate' but a high fee tacked on . . . or often both.
That is the main reason one should not buy foreign currency.
Aug 31st, 2016, 06:32 AM
#8
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The cost of obtaining foreign currency from an ATM (foreign to you anyway, local to the machine) consists of a transaction fee and a conversion rate. When you use a bank ATM in Europe, both of these charges are set by your bank.
So, if you look for a new bank, find one which charges no transaction fee and a minimal or no conversion surcharge over the interbank rate. I have 2 credit union accounts I use for foreign travel. Both charge 1% over the interbank rate and no transaction fee. This applies both to ATM withdrawals and to credit card charges.
Oh, and janisj's warning about DCC above applies to credit card charges also. Your friendly waiter will offer your bill in dollars as well as euros. Reject, reject, reject the dollar charge. This boosts the conversion rate and splits the profit between the merchant and the company offering the service.
So, if you look for a new bank, find one which charges no transaction fee and a minimal or no conversion surcharge over the interbank rate. I have 2 credit union accounts I use for foreign travel. Both charge 1% over the interbank rate and no transaction fee. This applies both to ATM withdrawals and to credit card charges.
Oh, and janisj's warning about DCC above applies to credit card charges also. Your friendly waiter will offer your bill in dollars as well as euros. Reject, reject, reject the dollar charge. This boosts the conversion rate and splits the profit between the merchant and the company offering the service.
Aug 31st, 2016, 06:39 AM
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<<The exchange rate is not determined by the machine . . . it is determined by your own bank.>>
That is inaccurate.
The exchange RATE is the interbank rate, period. The net cost to you of withdrawing Euros from the Italian ATM is a function of (1) Interbank rate, (2) any foreign exchange fee charged by your bank (3% or more in most cases), (3) any transaction fee charged by your bank.
That is inaccurate.
The exchange RATE is the interbank rate, period. The net cost to you of withdrawing Euros from the Italian ATM is a function of (1) Interbank rate, (2) any foreign exchange fee charged by your bank (3% or more in most cases), (3) any transaction fee charged by your bank.
Aug 31st, 2016, 06:40 AM
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EU bank ATMs issue euros with no fees, the conversion entity (Maestro, Sirrus, Pulse, or some other) takes 1%, and the remaining fees/charges come from your local bank.
The conversion rates change constantly throughout the day. Published rates are typically the mid market rate at the market´s close. These rates may or may not be the actual rate used for your transaction but .0644 will be close to the .1 charged by the conversion entity.
A $7.50 fee for an ATM withdrawal on a foreign bank is outrageous. I would find a new bank by day´s end.
The conversion rates change constantly throughout the day. Published rates are typically the mid market rate at the market´s close. These rates may or may not be the actual rate used for your transaction but .0644 will be close to the .1 charged by the conversion entity.
A $7.50 fee for an ATM withdrawal on a foreign bank is outrageous. I would find a new bank by day´s end.
Aug 31st, 2016, 07:12 AM
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Thank you all for your quick replies! I will definitely ask for Euros.
But, another question - If my bank is setting the rate, wouldn't it be the same $.0644 above the exchange rate in the ATM - minus the $7.50? They do not charge any foreign transaction fees. Doesn't the local bank charge a fee for using their ATM?
But, another question - If my bank is setting the rate, wouldn't it be the same $.0644 above the exchange rate in the ATM - minus the $7.50? They do not charge any foreign transaction fees. Doesn't the local bank charge a fee for using their ATM?
Aug 31st, 2016, 07:23 AM
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Large US banks continues to get away with this practice in their favor at your expense.
Italian banks are not allowed to gouge consumers for this kind of transaction at the ATMs.
The cost structure between asking a US bank vs. using an ATM in Italy is completely different. YOUR bank charges you at every opportunity, not the Italian bank.
in US at bank.
What you pay = official rate at "certain" time + bank mark up (5-10%) + transaction fee (0-$7.50) + possible shipping fee = $$$$$$
at ATM in Italy
What you pay = official rate at "certain" time + Visa/MC charge 0 or 1% depending on whether you bank passes 1% or not + YOUR bank markup 0-1-2-3% depending on bank + YOUR bank transaction fee of 0-$5 depending on bank.
Simple answer?
The best case using ATM using best US issued ATM card = official rate.
A not-so-good case using ATM using not-so-good US issued ATM card = official rate + 3% + $5.
When using an ATM using an ATM or Debit card, there is NO component of cost added by the Italian <u>bank</u> when you use an Italian ATM. They all come from YOUR bank + MC/Visa.
Italian banks are not allowed to gouge consumers for this kind of transaction at the ATMs.
The cost structure between asking a US bank vs. using an ATM in Italy is completely different. YOUR bank charges you at every opportunity, not the Italian bank.
in US at bank.
What you pay = official rate at "certain" time + bank mark up (5-10%) + transaction fee (0-$7.50) + possible shipping fee = $$$$$$
at ATM in Italy
What you pay = official rate at "certain" time + Visa/MC charge 0 or 1% depending on whether you bank passes 1% or not + YOUR bank markup 0-1-2-3% depending on bank + YOUR bank transaction fee of 0-$5 depending on bank.
Simple answer?
The best case using ATM using best US issued ATM card = official rate.
A not-so-good case using ATM using not-so-good US issued ATM card = official rate + 3% + $5.
When using an ATM using an ATM or Debit card, there is NO component of cost added by the Italian <u>bank</u> when you use an Italian ATM. They all come from YOUR bank + MC/Visa.
Aug 31st, 2016, 08:23 AM
#13
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Your bank charges a different rate when you get foreign currency at your bank in the US vs. withdrawing Euros from an ATM. As Greg says, look for a bank or credit union that doesn't have a per use charge for using an ATM (US big banks usually charge $5 per use) and doesn't charge you for foreign exchange (big banks charge 3%).
Do you have brokerage account? If so, many brokerages offer excellent terms for using foreign ATM. Not only does my brokerage not charge for use of a foreign ATM, but it will also refund any ATM charges by the foreign bank. This isn't an issue in Europe, but is in many places in the world. I get the interbank rate, plus the 1% charged by visa/mastercard/etc, no foreign exchange fee.
Do you have brokerage account? If so, many brokerages offer excellent terms for using foreign ATM. Not only does my brokerage not charge for use of a foreign ATM, but it will also refund any ATM charges by the foreign bank. This isn't an issue in Europe, but is in many places in the world. I get the interbank rate, plus the 1% charged by visa/mastercard/etc, no foreign exchange fee.
Aug 31st, 2016, 08:24 AM
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<i>But, another question - If my bank is setting the rate,</i>
US banks do not set exchange rates (if you are referencing exchange rates). Most banks, but not all, assess fees which can vary as a percentage of the transaction, a fixed fee per withdrawal, or some banks charge both.
Typically, the large bail-out banks are those charging the highest fees. For example, for foreign ATM withdrawals, Bank of America charges 3% plus $5. Charles Scwab charges nothing or 0% plus $0. Many credit unions pass along the 1% exchange fee but add nothing at the local level.
<i> Doesn't the local bank charge a fee for using their ATM?</i>
No.
US banks do not set exchange rates (if you are referencing exchange rates). Most banks, but not all, assess fees which can vary as a percentage of the transaction, a fixed fee per withdrawal, or some banks charge both.
Typically, the large bail-out banks are those charging the highest fees. For example, for foreign ATM withdrawals, Bank of America charges 3% plus $5. Charles Scwab charges nothing or 0% plus $0. Many credit unions pass along the 1% exchange fee but add nothing at the local level.
<i> Doesn't the local bank charge a fee for using their ATM?</i>
No.
Aug 31st, 2016, 09:04 AM
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<< If my bank is setting the rate, wouldn't it be the same $.0644 above the exchange rate in the ATM - minus the $7.50?>>
YOUR BANK IS NOT SETTING THE RATE. I clearly said 30 minutes before your post that the rate is the Interbank rate. The Interbank rate is the exchange rate, period.
The $.0644 is a foreign currency conversion fee. That's not part of the rate. It's a way to screw you out of money. This is why YOU SHOULD NOT GET EUROS IN THE UNITED STATES and instead just withdraw them when you arrive in Italy. The additional $7.50 surcharge is just another facet of the same bilking.
As for the "same $.0644" issue - check your bank agreement and see what it charges you for foreign withdrawals. Banks are federally regulated and need to have this information easily accessible. Chase is bad enough at 3.5% fee plus $3 per transaction. If your bank is charging 4-4.5% and $7.50, get an account elsewhere for travel - like Capital One (no fee, no withdrawal cost) or a credit union (1% fee, no withdrawal charge).
YOUR BANK IS NOT SETTING THE RATE. I clearly said 30 minutes before your post that the rate is the Interbank rate. The Interbank rate is the exchange rate, period.
The $.0644 is a foreign currency conversion fee. That's not part of the rate. It's a way to screw you out of money. This is why YOU SHOULD NOT GET EUROS IN THE UNITED STATES and instead just withdraw them when you arrive in Italy. The additional $7.50 surcharge is just another facet of the same bilking.
As for the "same $.0644" issue - check your bank agreement and see what it charges you for foreign withdrawals. Banks are federally regulated and need to have this information easily accessible. Chase is bad enough at 3.5% fee plus $3 per transaction. If your bank is charging 4-4.5% and $7.50, get an account elsewhere for travel - like Capital One (no fee, no withdrawal cost) or a credit union (1% fee, no withdrawal charge).
Aug 31st, 2016, 09:18 AM
#16
Yes, my post was overly simplistic -- but the TOTAL COST of getting any money out of an ATM IS DETERMINED BY YOUR BANK. Yes -- they all use the Interbank rate -- but the % they tack on adds to that so the 'actual exchange rate' is determined by your bank.
But they charge much more when you walk into your branch and ask for foreign currency.
But they charge much more when you walk into your branch and ask for foreign currency.
Aug 31st, 2016, 09:51 AM
#17
>>>Doesn't the local bank charge a fee for using their ATM?
No.<<<
The bank ATM's in Italy don't, but there are a few ATM's that charge fees similar to the ones you find in the US at convenience stores like 7-11. Just use ATM's at a bank to avoid that extra fee.
My credit union gives me the interbank rate (on the day I withdraw - it fluctuates during the day and they give me the lowest rate of the day) plus they tack on 1%.
You didn't say which bank you use, but my credit union has a low daily ATM limit ($400). I have to remember to convert that to euro and calculate the exchange rate before I attempt to withdraw money. At today's interbank rate, $400 = €358.24. I have to take the 1% fee off that amount to determine how much I should select on the ATM to withdraw without going over my $400 limit. At this rate, I would be able to select €350.
No.<<<
The bank ATM's in Italy don't, but there are a few ATM's that charge fees similar to the ones you find in the US at convenience stores like 7-11. Just use ATM's at a bank to avoid that extra fee.
My credit union gives me the interbank rate (on the day I withdraw - it fluctuates during the day and they give me the lowest rate of the day) plus they tack on 1%.
You didn't say which bank you use, but my credit union has a low daily ATM limit ($400). I have to remember to convert that to euro and calculate the exchange rate before I attempt to withdraw money. At today's interbank rate, $400 = €358.24. I have to take the 1% fee off that amount to determine how much I should select on the ATM to withdraw without going over my $400 limit. At this rate, I would be able to select €350.
Aug 31st, 2016, 10:09 AM
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<i>kybourbon on Aug 31, 16 at 1:51pm
My credit union gives me the interbank rate (on the day I withdraw - it fluctuates during the day and they give me the lowest rate of the day) plus they tack on 1%.</i>
Ditto my credit union with the 1%. When I asked about that I was told that the 1% goes to Mastercard, a middleman in the transaction. Neither the European bank nor my credit union take a fee, but MC takes a scoop.
My credit union gives me the interbank rate (on the day I withdraw - it fluctuates during the day and they give me the lowest rate of the day) plus they tack on 1%.</i>
Ditto my credit union with the 1%. When I asked about that I was told that the 1% goes to Mastercard, a middleman in the transaction. Neither the European bank nor my credit union take a fee, but MC takes a scoop.
