BMO’s Currency and Foreign Exchange Rates

Posted on January 28, 2021

As you prepare for your next international trip, you have a lot of details to arrange. Transportation, lodging, travel documents, and insurance are just some of the things that require your attention.

One detail you don't want to overlook is exchanging currency. Exchanging currency before you leave lets you shop around to find the best rate. This way, you avoid the poor exchange rates and high fees of airport kiosks or stores.

The Bank of Montreal (BMO) holds a leading position in the Canadian dollar exchange market. Below, you'll find out more about the BMO currency exchange service, and you'll be ready to cross another item off your travel preparation to-do list.

BMO Currency Exchange and Rates

You can purchase over 60 different currencies through BMO. BMO offers over 100 currency pairs, so you don't necessarily have to be going to or from Canadian dollars.

Currency Exchange Rate

You can find the BMO exchange rate for a variety of currencies on their website. These rates apply to cash exchanges in a branch. You should only use them for informational purposes because the rate you'll get could differ depending on market conditions.

For example, one Canadian dollar would buy you $1.3077 (US dollars) on January 13, 2021.

What Determines the Exchange Rate?

The exchange rate depends on the market and can change without notice. Supply and demand for a currency determine how much that currency is worth compared to another one.

Geopolitical and economic factors affect the exchange rates between the currencies of two countries.

Reports of the unemployment rate, inflation, changes in interest rates, gross domestic product, and manufacturing production commonly impact the currency exchange rate. The stability of a country's government also affects the exchange rate. An unstable government will cause that country's currency to lose value against other, more stable countries.

Currency speculation, rumours, disasters, and everyday supply and demand for the currency will cause short-term changes in the exchange rate.

Exchanging Canadian Dollars 

Exchanging Canadian dollars usually puts you in a good position relative to other currencies. The Canadian dollar is one of the world's strongest currencies. It closed 2020 just below its highest level since April 2018.

Canada is extremely stable, both legally and politically. This makes the Loonie one of the most common currencies for central banks to hold as a foreign exchange reserve.

The Loonie is also a popular option for exchanging currency. Exchanges involving Canadian dollars account for around 5% of daily trades.

BMO Currency Exchange Fees

BMO doesn't charge a fee to exchange currency. However, like all Canadian banks, BMO includes a markup in the exchange rate they give you. The markup pays for the costs associated with providing the service, like customer service personnel, overhead costs for branch locations, and transfer costs.

The markup is why you'll always get a less favourable exchange rate than the one you see published in media outlets. The media tells you the interbank rate, which is the rate banks use to trade currency with each other.

The markup varies by financial institution. It can range from 0.5% to 3.5% or higher. The BMO markup is 2.65%.

The markup at the other four major Canadian banks (CIBC, RBC, Scotiabank, and TD) ranges from 2.6% to 3.34%. BMO gives you a competitive rate compared to other large Canadian banks.

Foreign Exchange Rates at BMO

You'll often see the terms currency exchange rate and foreign exchange rate used interchangeably. You have options other than cash, though, for transactions in a foreign currency.

BMO Credit Card

Instead of buying currency before you leave on a trip, you can use your BMO credit card to make purchases abroad. You'll pay for the foreign currency conversion as well as a transaction fee.

BMO uses the standard Mastercard or Visa International exchange rate, depending on what type of card you have. The bank charges a 2.5% foreign transaction fee.

To avoid some of the costs associated with using a credit card, you can use a BMO Prepaid Travel Mastercard. You'll still have to factor in the currency exchange rate, and you'll pay a foreign transaction fee. However, the prepaid card doesn't charge interest for purchases or cash advances.

If you travel frequently to the US, the BMO US Dollar Mastercard lets you make transactions in US dollars. As such, you avoid the exchange rate. In addition, if you make $1,000 or more in purchases in US dollars, BMO will waive the annual credit card fee.

Wire Payments and Money Transfers

BMO lets you send money abroad using a wire payment or a Western Union money transfer.

BMO uses its own currency exchange rate for wire payments. They charge a transaction fee of 0.20% of the value of the transaction with a minimum charge of $15. BMO also charges a $10 communication charge for international wire payments.

You can make a wire payment from a BMO branch.

For a Western Union money transfer through BMO, BMO uses Western Union's fee structure. Western Union charges a $5 transaction fee plus 1% of the Canadian dollar equivalent of the transaction amount. Western Union determines the exchange rate and any other transfer fees.

You'll see all of these charges when you make the transaction. You can make a Western Union money transfer from your BMO online banking portal.

Best Bank for Currency Exchange

BMO is the best bank for currency exchange for several reasons. BMO is currently the eighth-largest bank by assets in North America and serves over 12 million customers. They have a large network to serve you.

BMO offers you a competitive rate for currency exchanges. In addition, using the BMO currency exchange service is convenient if you bank there. You need to have an account with BMO to use the currency exchange service.

You can order foreign currency at a BMO branch or online. Not all branches have all currencies available, so be sure to contact the branch ahead of time.

You can order currency online through your BMO online banking portal. A priority courier will deliver your currency to your home or office. The courier fee is $10, no matter how much currency you order.

If you're in a major city, you should receive your order within four business days. If you're in a rural area, you'll receive your currency within seven business days.

In a branch or online, you can order up to $2,000 Canadian per day.

BMO will give you a good rate for your currency conversion. Ordering currency is easy, and you'll get your currency quickly. All of these factors make BMO the best Canadian bank for currency exchange.

Whether you are a frequent traveler for business, a frequent traveler to visit family, or a Canadian Snowbird, securing travelers insurance is the most sound way to protect your money in the event of an emergency. Visit your friends at Insurdinary today, and let us compare rates from all of Canada's top insurance providers. We guarantee finding you the best quote! Happy Travels!

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