Each of us has had to exchange currency at a bank at least once in our lives: rubles for dollars or euros. And we are always unpleasantly surprised when the price on the exchange rate board differs by 50-80 kopecks from what we saw on TV over breakfast. Therefore, the question arises: how to buy currency at the Central Bank’s rate? Is there a way for Russians to avoid paying a commission to the bank?
Buy Currency at the Central Bank Rate
Suppose you have 120,000 rubles. You want to buy euros with them and credit them to an account in your favorite bank. What do you need to do?
Step 1. Open an account with any broker that provides access to the exchange currency market (for example, BCS, KIT Finance, Otkrytie, Solid, Finam, Zerich Capital Management). Opening an account is free.
Step 2. Transfer money to this account from your bank or deposit cash through the broker’s cash desk. The first option is usually more convenient, but your bank will charge a commission that can range from 10 rubles per transaction to 0.3% of the transferred amount or more. No commission is charged for depositing cash.
Step 3. Download the trading terminal program from the broker’s website. Sit down and configure it, learn to use it, referring to the reference materials.
Step 4. Execute an exchange trade – buy the EURRUB_TOD instrument. In this case, TOD is short for today. It means that settlements for the trade occur on the day of purchase or sale of currency at 15:00. If you don’t make it in time, you can wait until tomorrow or buy EURRUB_TOM, where TOM means tomorrow – settlements the next day.
Trading is done in lots of 1,000 euros. Depending on the rate, you will have some full or partial number of lots. Part of the funds will go to commissions, and the rest can be left on the account for future currency operations.
- At the time of executing the trade, the broker will deduct a commission as a percentage of the turnover. Suppose it’s 0.005%. That is 6 rubles.
- At the time of settlement, the broker will deduct a commission for currency delivery. Suppose 0.05%. That is 60 rubles.
- The exchange commission will be 0.0015% of the trade volume. That is 1.8 rubles.
Step 5. Issue an electronic order to withdraw euros from the brokerage account to the account in your favorite bank. The commission for this operation will be, say, 25 euros. The purchased amount minus the commission will be credited to the account. Alternatively, you can receive the money in cash at a bank affiliated with the broker. But you will still have to pay the withdrawal commission. That’s it.
Is It Profitable to Buy Currency Through the Moscow Exchange?
To understand whether it’s easier to convert rubles to currency within a bank or withdraw cash and run to the nearest exchange office, let’s calculate our expenses:
120 rubles + 6 rubles + 60 rubles + 1.8 rubles + (25 euros * ruble to euro rate)
If you add this figure to the amount spent on buying euros, you can understand what the real euro rate turned out to be for us, taking into account all the costs:
(amount spent on buying euros in rubles + commission amount) / received euro amount
Is this a lot or a little? You need to calculate, but overall, the price may turn out to be very close to what exchange offices offer, or even higher. The rule here is: the larger the trade amount, the lower the commissions in percentage terms, and the more advantageous the real exchange rate. If we bought 10,000 euros under the same conditions, the real rate would already be much more profitable.
