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I will be traveling to South Africa and Namibia for the first time and am deciding if I should get South African Rand and Namibian Dollars here in Switzerland at my bank, or withdraw money at ATMs there. Which option would give me the most bang for my buck?
Hi there,
The banknote rate and forex rate used by your bank is the primary factor in determining whether changing Swiss francs for rand at the till could work out cheaper than withdrawing money at ATMs in South Africa and Namibia. You can find a comparison of the spreads of the banknote and forex rates used by Swiss banks here.
It is worth noting that you often get more rand for your Swiss francs at Swiss bank tills by changing your Swiss francs for U.S. dollars or euros and then changing your U.S. dollars or euros for South African rand. A quick calculation using the online banknote rate exchange calculator provided by the Zürcher Kantonalbank (ZKB) on January 18, 2018 shows that while you would get ZAR 28,571 if you exchanged CHF 2500 at a ZKB till, you would get ZAR 28,988.20 if you changed the CHF 2500 into USD and then changed the USD to ZAR at the till. If you changed your CHF 2500 to EUR and then changed the EUR into ZAR, you would get ZAR 29,857.29. That is over ZAR 1000 more than you woud get if you changed francs directly into rand, and all without leaving the ZKB till.
In South Africa and Namibia, withdrawals at ATMs are typically limited to ZAR 2000 per withdrawal. If, for example, you were to withdraw ZAR 30,000 (around CHF 2500) from ATMs throughout your trip, you could expect to pay at least CHF 75 in withdrawal fees to your Swiss bank. Additionally, South African banks typically charge around ZAR 6 per ZAR 500 withdrawn for the use of their ATMs, which would add another ZAR 360 (around CHF 28) in withdrawal fees for a total of more than CHF 100 in withdrawal fees. Although Swiss banks typically use the more favorable forex rate for foreign ATM transactions, the combined ATM fees may negate the benefit of the better exchange rate in some cases.
Using a debit card to pay large expenses directly whenever possible is recommended because Swiss banks generally use the more favorable forex rate for debit card transactions, rather than the banknote rate that is typically used for currency exchanges at the till. Using a debit card will normally work out cheaper than buying large amounts of rands at the till or withdrawing rand at ATMs, depending on the foreign transaction fee charged by your card issuer.
Important: Swiss banks use much poorer exchange rates for Namibian dollars than they use for the much more widely circulated South African rand. However, in Namibia, South African rand and Namibian dollars are used interchangeably at a 1:1 rate. South African rand is accepted by all Nambian merchants. If you plan to take money with you, buying South African rand instead of Nambian dollars at Swiss banks will save you a lot of money.
Best regards from Moneyguru
More on this topic:
Currency exchange rates of Swiss banks compared
Banknote rates and forex rates in Swiss banking explained
