How to exchange foreign currency while saving on fees: 3 tips for safe and well-priced exchanges

In recent years, the demand for foreign currency exchange in Vietnam has surged as the number of people traveling abroad, studying overseas, and working internationally continues to grow. According to tourism industry data, millions of Vietnamese travel abroad each year, and most of them need to understand how to exchange foreign currency before their departure.

Many people often choose to exchange money directly at the airport or tourist exchange counters, but in reality, these locations often have very high conversion fees, sometimes reaching 5–7% of the transaction value. This means that if you exchange 1,000 USD, you could lose several hundred thousand VND just by choosing the wrong place to exchange money.

Therefore, understanding how to exchange foreign currency reasonably, knowing where to exchange money, when to get a good exchange rate, and how to avoid unnecessary fees will help you significantly save costs for your trip.

In this article, you will be guided on how to exchange foreign currency safely, legally, and with minimal fees, along with practical tips to help you exchange money quickly, at good rates, and avoid "unnecessary losses" when traveling abroad.

Tip 1: How to exchange foreign currency quickly in Vietnam

Step 1: Understand how foreign currency exchange works

Step 2: Exchange foreign currency before departure

Prepare foreign currency before your trip

• When learning how to exchange foreign currency when traveling abroad, a common rule applied by experienced travelers is the 80:20 rule.

• This allocation helps you stay safe and save on exchange fees.

• 20% foreign currency in cash

  • Used for immediate expenses upon arrival such as taxis, trains, drinks, or tips.

  • It's advisable to exchange cash foreign currency before leaving Vietnam.

  • Prioritize small denominations and coins for easy payment.

• Remaining 80% on international payment cards or Forex cards

  • Reduces the risk of losing cash.

  • Easy to pay for hotels, shopping, or withdraw money from ATMs abroad.

  • Often offers better exchange rates compared to exchanging all money in cash.

Understand the difference between types of foreign currency

• When performing a foreign currency exchange, it's important to know that currencies worldwide are typically divided into two main groups.

• Commonly traded currencies

  • E.g., USD, EUR, GBP, JPY.

  • Widely traded on global markets.

  • Easy to exchange foreign currency at banks or exchange counters in most countries.

• Less commonly traded currencies (Exotic currency)

  • These are currencies of countries with less international trade.

  • Exchange rates are often hard to find and have high spreads.

  • In many cases, exchanging USD to the local currency in the destination country will be more convenient.

Why carry some cash

• After landing, you might need money immediately before finding a place to exchange foreign currency or an ATM.

• The time from the airport to the hotel can incur unexpected expenses.

• Some common situations include:

  • Paying for taxis or buses from the airport

  • Buying phone SIM cards or train tickets

  • Paying for luggage fees or small services

• Therefore, it's advisable to have a small amount of foreign currency in cash to avoid being caught unprepared.

How much money should you exchange before the trip?

• The specific amount depends on the country and your travel plans.

• However, for most trips of 3 days or more, many travel experts recommend:

• Prepare about 40 USD or the equivalent amount in local foreign currency.

• This amount is sufficient to cover basic expenses upon arrival before you find a foreign currency exchange location with better rates.

Step 3: Monitor exchange rates before exchanging money

Check foreign exchange rates before buying or selling

• Before conducting a foreign currency exchange, you should take a few minutes to check the current foreign exchange rate.

• Exchange rates are constantly changing with the global financial market, so the timing of the exchange can directly impact the amount you receive.

• If you need to exchange a large sum of money, monitoring today's foreign exchange rates will help avoid losing money due to rate differences.

Monitor exchange rate trends to choose the right time to exchange money

• When learning how to exchange foreign currency effectively, many experienced individuals often observe exchange rate trends over several days or weeks.

• Some practical principles:

  • If the currency you hold is stable or appreciating, you might wait longer to get a better exchange rate.

  • If your currency is depreciating rapidly, it's advisable to exchange it early to avoid further losses as the rate continues to fall.

  • When exchanging a large amount of money, choosing the right time can significantly save conversion costs.

Compare exchange rates from multiple reliable sources

• Not all places apply the same foreign currency exchange rates.

• Therefore, before exchanging money, you should check exchange rates from multiple sources to make an accurate decision.

• Common ways to check:

  • Search on Google with the keyword “today's exchange rate”.

  • View currency exchange rate fluctuation charts to understand upward and downward trends.

  • Compare exchange rates between banks, legal money exchange counters, and airports.

Understand exchange rate charts to make decisions

• When searching for currency exchange rates, you will often see charts showing fluctuations over time.

• These charts help you quickly identify:

  • Whether the currency is appreciating or depreciating.

  • Whether the trend is stable or highly volatile.

  • The appropriate time to buy or sell foreign currency at a better rate.

• By simply observing the trend over the past few days, you can choose the right time to exchange money and minimize exchange rate risks.

Step 4: Exchange foreign currency at a bank

Choose a bank for safe foreign currency exchange

• When looking for safe and legal foreign currency exchange methods, banks are always the most reliable option.

• You just need to go to the bank where you have an account and request to exchange foreign currency as needed.

• The process is usually very simple:

  1. Inform the staff that you want to buy or sell foreign currency.

  2. Provide the necessary documents as required by the bank.

  3. Confirm the foreign exchange rate at the time of transaction.

  4. Receive foreign currency in cash or have it transferred to your account.

• This method helps you legally buy and sell foreign currency, avoiding the risk of dealing with unreliable exchange points.

Advantages of exchanging foreign currency at a bank

• Many experienced individuals in foreign currency exchange often prioritize banks for the following benefits:

• Transparent exchange rates

  • Exchange rates are publicly listed.

  • Less likely to have large discrepancies compared to airports or tourist areas.

• Low transaction fees

  • Most banks charge very low foreign currency exchange fees or include them directly in the exchange rate.

• Guaranteed authentic currency

  • Foreign currency is thoroughly checked, reducing the risk of receiving counterfeit money.

Note: foreign currency needs to be ordered in advance

• One thing many people don't know about exchanging foreign currency at a bank is that banks don't always have cash readily available.

• This usually happens when:

  • You need less common foreign currency.

  • The bank branch is small.

  • The amount to be exchanged is quite large.

• Therefore, you should:

  • Contact the bank in advance to order foreign currency.

  • Prepare early, a few days to about 1-2 weeks before your trip.

• Planning your money exchange early will help you have enough foreign currency and avoid having to exchange it urgently at an unfavorable rate.

Step 5: Open an international payment account

Check card usage fees abroad

• Before going abroad, you should contact your bank to inquire about card usage fees for international transactions. This is an important step in how to buy and sell foreign currency and make payments abroad that many people often overlook.

• Common fees to clarify:

  • International ATM withdrawal fees.

  • Currency conversion fees when paying by card.

  • Transaction fees at foreign banks.

  • Fees when swiping an international payment card at stores or hotels.

• Some banks may charge foreign transaction fees from 1% to 3% per payment, so checking beforehand will help you avoid unnecessary costs.

Choose the right bank account for travel

• If your current bank charges high fees for international payments, you might consider opening a dedicated bank account for international travel.

• When comparing banks, prioritize:

  • Low or no international transaction fees.

  • Competitive foreign currency exchange rates.

  • Convenient ability to withdraw foreign currency at international ATMs.

  • Support for international payment cards like Visa or Mastercard.

• After opening the account, you can transfer money into this account and use it exclusively for international trips. This helps manage spending clearly and reduces risk when using your primary card.

Note on minimum account balance

• Some banks require maintaining a minimum balance in the account to avoid management fees.

• Therefore, when using an international payment account, you should:

  • Check the minimum balance amount required by the bank.

  • Maintain the necessary amount to avoid monthly account maintenance fees.

  • Monitor transactions regularly to control costs.

• Preparing a suitable bank account for foreign currency transactions will help make the process of buying and selling foreign currency, withdrawing money, and making payments abroad more convenient and cost-effective.

Step 6: Buy foreign currency online

Order foreign currency online before your trip

• Currently, some banks and financial services allow you to buy and sell foreign currency online and receive the money before your trip. This is a convenient option if you don't have much time to go to the bank.

• The online foreign currency exchange process usually includes these steps:

  1. Access the website or application of the bank offering online foreign currency purchase services.

  2. Select the currency you want to exchange and the amount you want to buy.

  3. Confirm the foreign exchange rate and transaction fees.

  4. Make payment and choose the method of receiving the money (pick up at a branch or home delivery if available).

• This method helps you proactively prepare foreign currency before going abroad without waiting at the counter.

Advantages of buying foreign currency online

• Many people choose online foreign currency exchange for the following benefits:

• Market-updated exchange rates

  • The system usually displays real-time foreign exchange rates.

• Time-saving

  • No need to go directly to the bank to order foreign currency.

• Easy to compare exchange rates

  • You can check multiple services to find better exchange rates.

Note on delivery fees

• Some online foreign currency exchange services may charge delivery fees or order processing fees.

• These costs can make the total cost of foreign currency exchange higher than exchanging directly at a bank.

• However:

  • If you are exchanging a large amount (hundreds to thousands of USD),

  • Some units may offer free transfers or reduced service fees.

• Therefore, before ordering, you should:

  • Compare exchange rates and transfer fees.

  • Check the actual total cost of the transaction.

  • Choose a legal and reputable currency exchange service.

Optimal time to buy foreign currency online

• This method is most suitable when you are preparing to exchange a large sum before your trip.

• Booking in advance helps you lock in the exchange rate early and proactively prepare cash.

• However, you should complete your online foreign currency purchase before departure, rather than waiting until you are already abroad.

Tip 2: How to exchange foreign currency when traveling abroad

Step 1: Prepare cash when traveling abroad

Always carry a certain amount of foreign currency cash

• When researching how to buy and sell foreign currency before traveling abroad, many people only focus on payment cards. However, in reality, you should still prepare foreign currency cash for use in various situations.

• In many countries, especially outside major cities, card payments are not as common as in some developed countries. Therefore, you may need to pay cash for daily expenses.

• Expenses often requiring cash:

  • Taxis, buses, or public transportation.

  • Small restaurants, local shops.

  • Traditional markets or small tourist attractions.

  • Tips or small service fees.

Not all places accept cards

• A common mistake when looking for ways to buy and sell foreign currency for travel is thinking that bank cards can be used everywhere.

• In reality:

  • Many small shops do not have card swipe machines.

  • Some places only accept local currency cash.

  • Electronic payment systems may be unstable or not widespread.

• This is especially common when you:

  • Travel to developing countries.

  • Travel to rural areas or tourist spots far from city centers.

Combine cash and cards to manage spending

• An effective strategy in exchanging foreign currency when traveling abroad is to combine both cash and cards.

• Practical allocation:

  • Use foreign currency cash for small daily expenses.

  • Use international payment cards for hotels, flights, or large purchases.

• This approach helps you:

  • Reduce the risk of carrying too much cash.

  • Proactively pay in all situations.

  • Manage spending more effectively when traveling abroad.

Step 2: Withdraw foreign currency at an ATM

Use an ATM to withdraw foreign currency

• Once abroad, one of the most convenient ways to buy and sell foreign currency is to withdraw money directly from an international ATM.

• This method often helps you get exchange rates close to the market rate, which is better than many currency exchange counters at airports or tourist areas.

• Conditions for withdrawal:

  • Use an international payment card such as Visa, Mastercard, or Maestro.

  • A bank account that allows international transactions.

  • ATM belonging to a large bank or an international ATM network.

• When you withdraw money, the ATM will automatically convert the money from your account to the local foreign currency at the exchange rate at the time of the transaction.

Why ATM withdrawals often have good exchange rates

• Many people experienced in exchanging foreign currency when traveling often prioritize ATMs because:

• Exchange rates close to the market

  • Less deviation than tourist currency exchange counters.

• Low transaction fees

  • If your bank supports international transactions well, ATM withdrawal fees are usually quite low.

• Convenience

  • You can withdraw money at any time without needing to find a place to buy or sell foreign currency.

How to find an ATM abroad

• Finding an ATM in another country can sometimes be difficult if you are not familiar with the area.

• Some simple ways:

  • Use Google Maps and search for "ATM near me".

  • Look for major bank branches, as ATMs are often nearby.

  • Ask hotel reception, tour guides, or taxi drivers.

• You should find an ATM on your first day there, while you still have an internet connection to easily look up locations.

Check card type before going

• Many ATMs worldwide now only accept chip cards (EMV) for increased security.

• Therefore, before your trip, you should:

  • Check if your card has an EMV chip.

  • Andrew Lokenauth Chief Financial Officer

    Andrew Lokenauth is a financial expert with over 15 years of experience on Wall Street and in tech companies, having worked at Goldman Sachs, Citi, and JPMorgan. He is the founder of Fluent in Finance, which provides knowledge on investing, personal finance management, and financial planning.