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Best way to convert HKD to SGD

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Wd40
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Best way to convert HKD to SGD

Postby Wd40 » Tue, 08 Jul 2014 11:41 am

Hello Guys,

I had pension fund from my previous company due, which was managed by HSBC Hong Kong. I opened DBS multicurrency account and have got the funds into it in HKD.

I am now wondering what is the best way to convert it back to SGD (and eventually to INR, but thats something that I will manage by DBS remit to India)

If I try DBS online transfer the exchange rate is bad, its like about 1%. Also if I try to remit the HKD directly to INR to Indian account they will 1st convert to SGD and then INR so I get hit by the bad exchange rate twice.

I read JR8 mentioning before that the best way is DIY take the cash to Arcade and convert it.

I am going to check whether DBS charges anything to withdraw cash in the foreign currency from the multicurrency account. If its free, then I could try withdrawing and then going to arcade converting to SGD and then depositing the SGD back into my DBS account. The amount involved is 454,000 HKD ~= S$72,000.

I wonder whether converting so much amount will cause problems at the money changer or cause any other alters at MAS.

I stand to save about $500 in this whole process, so it definitely sounds worth it.

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Postby JR8 » Tue, 08 Jul 2014 1:37 pm

Hi WD,
<i>’I am going to check whether DBS charges anything to withdraw cash in the foreign currency from the multicurrency account.’</i>

That would be the first thing I’d check too.
Why do you want to convert from HK$ to S$ then later to INR? The downside with that is two sets of ‘spreads’/fees. I can see cases where it might be worthwhile, i.e. you earn peanuts interest% on the HK$, but can get a decent rate% on S$, and the S$ would be there long enough that it makes it worthwhile. No deposit a/c in India? ... Don’t know, just thinking aloud...

My gut feeling is that the sum involved itself probably won’t be an issue (i.e. reportable to MAS). Even if it were reportable, then as long as the funds are legally yours, I’m unaware that that might be an issue[*]. I suppose you could always go and simply ask a friendly-looking money-changer. That said I expect they will want to make a note of your ID, they usually seem to however much the sum is.

You might also vaguely recall me describing closing my S$ DBS account at the end of my 1st stint here. I withdrew something like S$32-35k in cash, and went to the Arcade and converted it into circa £15k. DBS gave me 3x S$10k banknotes amongst that, and as you can imagine my eyes were out on stalks. What I hadn’t realised was that banknotes that big were ‘reportable’ back then. I.e. they used to record the serial number of each note against your ID; perhaps an anti money-laundering/tax-evasion measure. If I were to do the same again these days, I’d ask for it in $100s I think, ensuring I had a good bag to put it in.

I’d work various scenarios through in a spreadsheet. Get info from DBS on their representative FX rates and actual fees. Check rates at Mustaffa on their www. Take a stroll through The Arcade, and gather some representative rates. I’d also look at one of two of the online FX offerings. I use www.xe.com for rates, but I see they also offer conversion/remittance. Such sites are also used quite often in the UK for people changing big sums to buy homes abroad. So that’s worth looking to see if you might be able to access anything similar.

What is for sure is that if you were to get DBS to change HK$ > INR, you’ll get hit with their spread twice over. It’s the same when doing such a conversion at the airport, they convert it in two steps via the home currency. On a conversion like that that’s a double reason to use a method with the narrowest possible bid/offer spreads and fees!


Random side-thought: Sometimes if buying a large sum of foreign currency, a money changer might have to go and borrow some of it from other changers. But in your case since you’re buying S$, availability shouldn’t be a problem.
Also with sums like that you really should be looking at a changers rate board as an indication, and having narrowed it down to 2-3 of the best indicated rates, then asking those 2-3 something like ‘What’s your best rate on buying HK$ in size?’, or simply ‘What’s your best rate on buying HK$x?’.
[*] Like declaring large sums of cash at border customs. Carrying it is not illegal/wrong, it’s just they want to know where it’s source was, and where’s it’s from/going to. As previously mentioned precisely that happened to me carrying the above £15k through Heathrow airport!

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Postby Wd40 » Tue, 08 Jul 2014 2:24 pm

JR8 wrote:Why do you want to convert from HK$ to S$ then later to INR? The downside with that is two sets of ‘spreads’/fees. I can see cases where it might be worthwhile, i.e. you earn peanuts interest% on the HK$, but can get a decent rate% on S$, and the S$ would be there long enough that it makes it worthwhile. No deposit a/c in India? ... Don’t know, just thinking aloud...



Thanks JR8, The reason, I couldnt convert it directly is because HSBC AMC in Hong Kong in their redemption form had only a few select currencies to redeem, the usual USD, AUD, EUR, SGD and HKD. Most people from my previous office just asked got it redeemed in SGD. I was probably one of the very rare smarties to open a multi currency account in Singapore and ask them to redeem in HKD without any conversion :)

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Re: Best way to convert HKD to SGD

Postby maneo » Tue, 08 Jul 2014 8:42 pm

Wd40 wrote:If I try DBS online transfer the exchange rate is bad, its like about 1%.

If only 1%, that's not too bad for DBS.
For the most recent transfer I did the "premium" over Oanda was 1.7%.

The moneychangers do have much better rates, and you should get even better for larger transactions.

You may also find HKD to be "in demand" with rates close to the XE rate.
By the way, there's a free XE currency converter app you can download to your smartphone.


Wd40 wrote:I am going to check whether DBS charges anything to withdraw cash in the foreign currency from the multicurrency account.

I've found banks like DBS & Std. Chartered charge "handling fees" whether giving or receiving foreign currency for their foreign currency accounts. Very annoying. :x


Wd40 wrote:I wonder whether converting so much amount will cause problems at the money changer or cause any other alters at MAS.

As JR8 said, it's not likely the money changers will have a problem coming up with large amounts of SGD. Even if they were short, they should be able to come up with more within 10-15 minutes.
As for buying large amounts of foreign currency it might take them a couple of hours or so.

If you're going to change large amounts regularly, you might be able to establish a relationship and get better rates and also be able to arrange for large amounts in advance.

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Re: Best way to convert HKD to SGD

Postby JR8 » Tue, 08 Jul 2014 8:49 pm

maneo wrote: If you're going to change large amounts regularly, you might be able to establish a relationship and get better rates and also be able to arrange for large amounts in advance.


Arranging for large sums might have mileage in it. But IME no changer, however loyal you are will ever give you a 'friends rate'... what's on the board is it, barring negotiation for size... but no automatic bonus for having used them before, in fact IME how ever often you use them, they never recognise you... everything is down to 'this deal, right now (and you a stranger)'.

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Postby Wd40 » Tue, 08 Jul 2014 9:01 pm

Thanks guys, I confirmed from DBS that there is no charges for withdrawal if the withdrawing currency is the same currency in which the amount is held in the account. But they will take some time to arrange the cash, like if you place the request in the morning, you get the cash by afternoon.

Also called up Mustafa (since they are the only ones open at this time) and the guy said no problems with large amount. He gave me his personal cell number and told me to call him when I am ready tomorrow, he said he will give me the best rate :) Also I asked him which is the best denomination note as I understand, higher denomination notes get slightly worse rates than the standard denomination. He said 500 HKD notes are the preferred denomination.

So tomorrow early morning I will be heading to DBS MBFC T3 and then to arcade. I will update you guys how it goes.

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Postby JR8 » Tue, 08 Jul 2014 9:09 pm

Good luck, and pls let us know how it goes.

p.s. I've used many changers in the Arcade. Sheen intl (upstairs, half way down on the right) is a co I've done several transactions thorough. But that said, as I suggested, every trxn you do should stand on it's own merits as the best available that day...

As I said good luck!

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Re: Best way to convert HKD to SGD

Postby maneo » Tue, 08 Jul 2014 9:24 pm

JR8 wrote:But IME no changer, however loyal you are will ever give you a 'friends rate'... what's on the board is it, barring negotiation for size... but no automatic bonus for having used them before, in fact IME how ever often you use them, they never recognise you... everything is down to 'this deal, right now (and you a stranger)'.

That may be your experience at the Arcade, but our experience (elsewhere) has been different.
The guy in the booth we go to regularly does recognise us.

Agree that you won't get better rates for small transactions, but we do ask for and get better rates for large exchanges (e.g. thousands of RMB or S$). It seems that amounts being discussed here fall in this realm.

Perhaps others might find this link useful:
http://www.thebestsingapore.com/best-shopping/the-5-best-places-to-exchange-money-in-singapore/

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Postby Wd40 » Wed, 09 Jul 2014 9:19 pm

Hello Guys,

Mission accomplished! Went to DBS early morning and asked for cash in HKD. No charges for withdrawal. I asked them what the best rate they can give if I were to convert to SGD from them. The cute lady at the teller called the relationship manager who quoted the best rate as 0.1590 which is slightly better than their usual rate, since I was converting big amount. The spot rate was 0.1604. I said no thank you and asked for HKD. They asked me to come back after 1 hr.

Then during lunch break went and collected the cash. It was 9 stacks of 100X$500 notes. Took it straight to arcade and after inquiring couple of shops, the best rate I got after nego, was the spot rate on XE.com i.e. 0.1604. Converted and this time got like 12 stacks of $50X100 SGD notes and some $1000 bills. Came back straight to the same bank and branch and deposited to my account.

The irony of this whole thing is when I asked the lady at the teller at the DBS bank what time I will get the cash and the denominations, she mentioned that they need to bring it from the money changer :o Think about it. They pay the money changer at spot or worse rates to convert from SGD to HKD and then I go to the money changer and convert at spot or worse rates back from HKD to SGD. DBS could have saved both of us the trouble by offering me spot or slightly worse rate, but no.

Thanks a lot for your helps, especially JR8. :)
Last edited by Wd40 on Wed, 09 Jul 2014 9:27 pm, edited 1 time in total.

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Postby JR8 » Wed, 09 Jul 2014 9:26 pm

Nice work, you fixed it to perfection.

:lol:

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Postby Strong Eagle » Wed, 09 Jul 2014 9:44 pm

Wd40 wrote:Hello Guys,

Mission accomplished! Went to DBS early morning and asked for cash in HKD. No charges for withdrawal. I asked them what the best rate they can give if I were to convert to SGD from them. The cute lady at the teller called the relationship manager who quoted the best rate as 0.1590 which is slightly better than their usual rate, since I was converting big amount. The spot rate was 0.1604. I said no thank you and asked for HKD. They asked me to come back after 1 hr.

Then during lunch break went and collected the cash. It was 9 stacks of 100X$500 notes. Took it straight to arcade and after inquiring couple of shops, the best rate I got after nego, was the spot rate on XE.com i.e. 0.1604. Converted and this time got like 12 stacks of $50X100 SGD notes and some $1000 bills. Came back straight to the same bank and branch and deposited to my account.

The irony of this whole thing is when I asked the lady at the teller at the DBS bank what time I will get the cash and the denominations, she mentioned that they need to bring it from the money changer :o Think about it. They pay the money changer at spot or worse rates to convert from SGD to HKD and then I go to the money changer and convert at spot or worse rates back from HKD to SGD. DBS could have saved both of us the trouble by offering me spot or slightly worse rate, but no.

Thanks a lot for your helps, especially JR8. :)


This is quite hilarious... almost deserves a sticky! Well done.

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Postby maneo » Thu, 10 Jul 2014 12:27 am

Well done.
Glad you got what you needed.

Wd40 wrote: Took it straight to arcade and after inquiring couple of shops, the best rate I got after nego, was the spot rate on XE.com i.e. 0.1604.

Yep, looks like HKD is in demand here in SG.
If you tried to buy HKD it would have cost you ~16.16SGD/100HKD, about 0.7% more than the spot rate. Still not too bad a spread.


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