Some guys were chatting about the new ATM fees in Brasil, and whether it is worth it to pay it because potentially you can get a better rate from Citibank (which charges a fee) vs. Banco do Brasil or HSBC.

Anyway, for a long time now I have wanted to know who determines the exchange rate when you do ATM withdrawals in Brasil (or any country for that matter).

For example, one day I went to the citibank in ipanema with my friend to do an ATM withdrawal. He and I both withdrew cash at the same time (he was using a Citibank ATM card and I was using my USAA Federal Saving Bank card, both were withdrawals from checking using ATM and not credit cards). We both withdrew 800 reais. His exchange rate was 2.42 and mine was 2.44, why the reason for the difference?

I am hoping that someone on here works in the retail banking sector or a similar field or would otherwise have knowledge of this. My questions are as follows:

1) When you withdraw money from a bank in brasil (i.e. citibank, hsbc or banco do brasil) who determines the exchange rate (the bank where your account is, the bank where you withdraw, a combination)?

2) How often are the rates updated? Constantly (as the receptionist at Solarium once told me) or only daily (which is what I would expect). The reason why I ask is that if they are updated constantly, if I withdrew money one minute and my friend withdrew 30 seconds later, this could account for the discrepancy in exchange rates, but the fact that his rate was 2.42 and mine was 2.44 (a fairly large differential for a timing difference) leads me to believe that the bank where you account resides plays at least a part in the determination of the rate that is used for the withdrawal as this is the only factor that was different between our transactions (other than a 15 second differential in the timing of our transactions potentially).

3) If the bank where you withdraw determines the rate, does anyone know who has the best rates in brasil between citibank, hsbc and banco do brasil?

4) If the bank where your account is determines the rate, does anyone know what banks are know for giving the best rates on out of country withdrawals?

As a side note, I am on the cirrus network and about half the time I try to withdraw money from an HSBC machine I have problems (although for some reason I almost never have problems withdrawing from the HSBC in Rio Sul). For this reason I almost always withdraw from the citibank in ipanema, banco do brasil in barra shopping (next to outback steakhouse), or HSBC in Rio Sul. There are also Citibanks in Copa and Barra that I am sure most people are familiar with but usually they are not on my route (there is also an HSBC in Ipanema, Barra Shopping and other locations).

Gr8ter,

Let me try to answer your questions for the most comon cases.

Most ATM cards these days are Visa or Mastercard debit cards. The exchange rate for those cards is similar to the exchange rate for credit card. On your bank card or credit card agreement and disclosure page you'll have the definition of the exchange rate. It should be something like (this is from a Visa bank card):

Foreign Transactions. Card withdrawals made in foreign countries and foreign currencies will be charged to the checking and/or savings in U. S. Dollars. The exchange rate between the transaction currency and the billing currency used for processing international transactions is:

A rate selected by Visa from the range of rates available in wholesale currency markets for the applicable central processing date, which rate may vary from the rate Visa itself receives, or

The government-mandated rate in effect for the applicable central processing date,

in each instance, plus or minus any adjustment determined by the issuer.

In the case of Brazil, there is no mandaded rate so the exchange rate is the floating exchange rate that Visa can get in the open market on the day of the transaction.

Hope that answers it.

I've found that the amount that appears on the slip the ATM gives me is usually a little different from the amount that appears on my statement. Usually, I end up paying slightly more, indicating that the bank is choosing a more favorable rate "available during the day, plus or minus adjustments" (they kinda gotcha there, don't they).

Gato,

Thanks for taking the time to post that. So it sounds like the issuer and the visa system combine to determine the rate of exchange to us dollars, and the bank where you are withdrawing has nothing to do with it (they just want the reals from wherever). If this is the case, disregarding fees, you should get the same rate no matter where you withdraw the money, which is a good thing to know. it means that beyond fees the banks where you withdraw do not play a part in ripping you off further and you can basically go anywhere and expact the same rate on your statement. Very helpful information for me. for example, now that citibank charges a 6 real fee, you could go to citibank or hsbc at any point in time and the us dollar translated amount you are withdrawing is equal, save the fee you are paying citibank. this means it is definitely worthwhile to use hsbc or banco do brasil over citibank.

Thanks.

Gr8ter,


Even if your buddy had a lower rate, does not mean he paid more. In some cases you bank may have charged 2% on his 1%. The only way to find out is check what is total withdraw was and compare it yours in dollars and cents.
I think it's your bankcard that sets the rates it gives you.
On my credit cards AMEX is the worse, I think they take 2.5%-3.0% off the principle.
My HSBC CC seems to be the best at shaving 1% max.

On the Debit cards, I never really notice a big difference in rates.Banco Brasil and Bradesco will give you the worst rate, I avoid them at all cost.
I have an HSBC account so no fees but the 1% Mastercard FX fee.
In past experiences, BofA was the worst and WAMU and HSBC were pretty much exactly as the daily rate.
About the rate changes, I took out Real's twice in a day first around 10am and second at 1PM at it was the same rate. I think it goes by the previous trading day, during market hours and once the market closes, it set the rate for that very day. Last time I saw the Real drop about .04 and HSBC didn't reflect it, and it was around 12:30pm.

I think the main issue is to avoid the US bank fees. Since I now have HSBC and do have any fees at ALL, I used Citbank, Banco nacion in Buenos Aires and no fees was acessed.

CN

I'm in the market for a new bank account (checking account) and firgured that I should get one that has the lowest or even better no fees when used in Brazil. I have called both HSBC and Citibank and both charge a 3% foreign transaction charge for using there atms in brazil. I use my bofa account all the time in TJ and there affiliated banks (scotia and santander) and have no fees/tranaction charges.

What is the best bank to go with??

I don't know how extensive their banking services are, but as of the last time I looked Capital One had no foreign transaction fees.

Can anyone tell me what the current ATM withdrawal limits are in Brazil?

That would be a big help for me, and I would greatly appreciate your input.

MM

1) It depends on what your daily limit is on your account in the US.

2) It depends on which bank you're using, and what the withdrawal limit on the ATM you plan to use is on a given day. It's sometimes lower on Sundays and holidays.

Most seem to be around R$1,000 per withdrawal. Bradesco tends to be R$800. Others are lower.

Thank you sir.

Appreciate your help.

MM