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Private Banking
Welcome to Private Connect March 2018

Smart money management while travelling

Managing your finances wisely while travelling abroad is important in ensuring a successful and enjoyable vacation.
The first consideration when travelling abroad is being aware of the rules and regulations surrounding exchange control — this information can be sourced from your bank.
Absa Retail International Banking advises as follows:
  • The SA Reserve Bank sets an annual amount that adults, children and business representatives may take overseas. Find out from your bank what the current limit is.

  • In terms of current local regulations, you may not receive your foreign exchange more than 60 days prior to departure.

  • The traveller has to produce a valid, green, bar-coded South African Identity Document or Smart ID Card, a passenger ticket showing that the journey will commence from South Africa and, for SARB reporting purposes, a valid passport.

  • By law, travellers need to cash in foreign exchange on their return to South Africa. (The ‘soft currencies’ of Eastern European and most African countries will be worthless or impossible to exchange on return. Spend it or convert it to a major currency before you return to South Africa.)

When it comes to acquiring foreign currency, the most efficient way is through your bank, as you have a relationship with your bank and you can negotiate the foreign exchange pricing on the purchase of currency and the rate charged for commission. If you need to avail yourself of any other value-added products or services, such as travel insurance or putting a power of attorney in place while you are away, it just makes it easier.

If price is all that matters, a good starting point is to use a currency converter (try www.exchange-rate.com). This will give you the interbank rate offered by international banks on a daily basis. The conversion rate will be different to the rate offered by local and online providers, such as banks, travel agents and exchange bureaus, as they charge additional fees and commission. Your goal is to find the rate closest to the standard interbank exchange rate.

There is a variety of foreign exchange products available, such as prepaid travel cards that can be used like a debit card. Absa’s Multi-currency Cash Passport is a good example, where the foreign currency is preloaded onto the card and ready for use 24 hours a day to withdraw money from ATMs or to make purchases. You can also do balance enquiries to monitor how much you’ve spent and how much money is available.

These cards generally offer better exchange rates and smaller fees than other options. If they are stolen, lost or damaged, prepaid currency travel cards have a free 24-hour delivery service and, in cases of emergency, can provide you with funds once the card has been successfully stopped.

Taking your debit and credit cards along (linked to your bank accounts at home) is a third option, but should preferably only be used as a back-up due to poor exchange rates and high charges applicable to these cards.

Savvy travellers take a small amount of cash along for incidentals like tips, taxi fare on arrival and to pay for the cup of coffee or drink at the airport. The best way to transact when travelling is to use the formal banking systems, such as ATMs and bank tellers, keeping in mind that local banks have no control over what foreign institutions charge.
 
Absa Bank Ltd Reg No 1986/004794/06   Authorised Financial Services Provider   Registered Credit Provider Reg No NCRCP7
 
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