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So I've just sold the car I was using in New Zealand for six months. The buyer paid in cash. So now I have a substantial sum of cash in NZD.

I will be in Canada next week starting my one-year visa. Obviously I'll need cash. Ignoring the risk of carrying cash on me, what's the best way to exchange that NZD into CAD cash?

Options I can think of:

  • exchanging it at a travel exchange in NZ
  • exchanging it in Hawaii enroute
  • exchanging it in Canada at a bank / exchange place
  • depositing it in my NZ bank account here, and using my ATM card to withdraw it there.

I'm not sure which is the best option though, to avoid losing too much on fees, exchange differences, and bank charges.

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On a side note, one need to report to the customs at the Canadian border if carrying amounts of CAN$10,000 or more - be it in coins, domestic or foreign bank notes. –  Prashanth Apr 5 '12 at 7:20
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Are we using 3-letter tags for currency codes as well as airport codes now? CAD is the IATA airport code for Wexford County Airport in Cadillac, Michigan, United States ... –  hippietrail Apr 5 '12 at 8:24
    
hmm, Forex uses CAD, but we could use CAN. Or CDN. Oh and to @Prashanth - no worries, I had thought of that, but my car wasn't worth anywhere near that amount :) –  Mark Mayo Apr 5 '12 at 11:36
    
Probably best to take that question to meta. –  DJClayworth Apr 5 '12 at 13:26
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I made some edits that I think will simplify the tagging. –  DJClayworth Apr 5 '12 at 13:32
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2 Answers

up vote 8 down vote accepted

For large sums, rates for telegraphic transfer are usually way better than for cash, so you're almost certainly best off depositing the cash in a NZ bank and wiring it over to Canada. Of course, if you don't have a Canadian bank account yet, this gets a bit more complicated; you'd need to set up online banking and ensure that you can do a TT to Canada once you do get the account.

ATM withdrawals in Canada from a NZ bank are probably the 2nd best option, but if you can't withdraw the entire sum in one go, you'll incur fees every time you do.

Exchanging cash either NZ or Canada will get you a poorer rate, plus carrying around large quantities of cash is not safe anyway. Exchanging it in Hawaii is the worst of all worlds, you'll get bad cash rates and suffer double conversion losses from going NZD->USD->CAD.

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What about exchanging the whole amount in NZ from NZD to CAD and taking the cash with you to Canada. Then there open a new account at a bank and deposit the money there? Then you don't have to pay any fee for the telegraphic transfer. –  RoflcoptrException Apr 5 '12 at 6:38
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You will lose much more on the bad exchange rate for cash than you will gain by not paying the TT fee. For example, at anz.co.nz right now, the TT buy rate for CAD is 0.8286 vs 0.8694 for cash. (The website doesn't have cash sell rates, but the spread will be similar.) This means you get socked an extra 5%, or $500 out of $10000, vs. a TT fee of maybe $50 or so. –  jpatokal Apr 5 '12 at 6:47
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Probably not the exact answer to this question, but here's what I would do:

  1. Assuming you have a bank account in New Zealand, I would deposit the vast sum of cash with them.
  2. If you don't have one already, apply for a no-annual-fee credit card, either with the bank, or with any other financial institution. Make sure it also carries no foreign transaction fee. In the US, the Visa Signature credit card offers this benefit. Hopefully, they have a NZ offering as well.
  3. Link your bank account with the credit card payment system online, so you can access the account anywhere to pay it off periodically.
  4. Travel to Canada and swipe away!

This kills several birds with one stone:

  1. Safely deposit a vast sum of cash, and travel with the security of a credit card, with far lesser theft/loss liability than cash.
  2. Credit Cards offer one of the lowest exchange rates, often times more competitive with the banks. The foreign transaction fee (usually ~2%) is waived if you get the right card. And you don't have to pay banks any commissions during the exchange.
  3. Given that credit cards are widely accepted throughout North America, you will probably get more benefits (cashback, miles, etc.) than you would spending cash or using a bank debit card.
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Although credit cards are widely accepted throughout North America, there are a set of stores that take credit cards in the USA that do not in Canada: convenience stores, some coffee shops etc. These places all take debit cards though. So have both as ways to get to that money while you're here. –  Kate Gregory Apr 5 '12 at 15:22
    
I wonder if debit cards carry a foreign transaction fee - probably do –  rs79 Apr 5 '12 at 15:42
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