i have been planning a trip to switzerland for some time now, and it just occurred to me that it might be convenient (and a good idea financially) to convert some of my dollars to francs now, well before i actually go, being that it is a more stable currency.
I'd like to know first, if it is possible for me, an american citizen, to open up a swiss checking account with only around $2000. opening an account seems to be the most convenient approach.
the other approach might be to exchange my dollars for francs right now. is that easy? is there a surcharge for doing that?
For God 's sake, please refrain from opening a bank account in Switzerland now. Commissions and taxes for non residents are at an all time high and there are very serious privacy concerns, especially if you are a US or German citizen.
Buying francs is a much sounder approach: most Swiss cities (and even some tourist-oriented towns) have agencies that will change your foreign currency into francs. No ID required and no questions asked. Commissions are usually very modest.
Also consider that most Swiss cities have jewelers and traders stocking gold and silver coins and bullion. Prices are usually very good, just be sure to shop around.
thanks for the info. but, is there a way i can exchange dollars for francs here in the US right now?
Yes, but I would look it up first. It might be cheaper to make the exchange in Europe than the US. I know for a fact that is the case with Ukraine.
Converting USD to CHF using a bureau de change (not sure what they are called in the US) would be crazy. Just open up a trading account with Dukascopy (formerly an FX broker, now a registered Bank) which you can do online. Then when asked which currency you want your account to be denominated in, choose CHF. Or even better open the account denominated in USD and simply go short USD/CHF, that way if the swissy starts to tumble you can shift back into USD instantly (or any currency).
interesting. i'll check out Dukascopy. how would that be better than going to my bank and exchanging US$ for swiss francs without a fee? i found out that i can do that. I assume Dukascopy will charge me fees. If i were to travel to Switzerland could i use the Dukascopy account like a checking account for francs?
You would be charged a huge fee by your bank, it's just hidden in the spread. By the spread I mean the difference between the offer price and the bid price (the price at which you are able to buy and the price at which you are able to sell). At a forex broker you also pay a spread, but it will be orders or magnitude smaller, in fact possibly so small that you will effectrively be paying the same spread as you would in the interbank market (when banks exchange currency between themselves). There is also a fee but I believe it's around $4.80 per $100,000.
At any rate, it's worth considering for the flexibility alone, of being able to shift into any currency.
By the way, don't be tempted to 'day trade' it's for mugs!
You can't use it as a checking account as far as I know, but that's something to ask them.
thanks for the advice...i'm still confused though. from what i understand, i can go to my bank and give them US$2000 and they will in return give me the equivalent amount in Swiss Francs based on the daily exchange rate (curently 1 US$ = 1.0546999 Swiss francs). So, i would get about 2109 swiss francs. there is no fee. are you suggesting, there is a spread inherent in that daily exchange rate that would not exist when opening a forex account? i'm not sure i could open an account with such little money anyhow.
i think your misunderstanding is that you believe that there is only one exchange rate, it doesn't work this way, there is one quote at which you buy and another at which you sell. So if you were to buy and then CHF and then instantly sell them back you will lose 'the spread', ie the difference betweeen the two prices. The way banks make their money is by charging retail customers a huge spread. So for example just looking now at what I can sell GBP/USD for at my retail bank the quote is 1.4556, whereas at my broker the interbank rate is 1.5095. So I am selling at a considerably higher price at my broker, which is obviously desirable.
that makes sense. i was under the impression that if i did this through my bank, there is one conversion rate for both buying and selling. If i recall correctly, when going back and forth between canada and the US, that's how it worked. I must be mistaken.