I have a Citibank ATM card. I’ve been noticing a bit of a difference in the posted exchange rates versus the rate I get when I withdraw cash in Brazil. I decided to give this a serious looking-into and took a scientific approach.

Hypothesis: Citibank ATM machines give the best exchange rate for ATM withdrawals from my Citibank account.

Impetus: I am under the impression Citibank is giving me a lower-than-posted rate.

The Experiment: Perform withdrawals from several banks that accept the Citibank card and compare the results. Candidate banks must accept cards on the Star/Cirrus/Maestro/NYCE systems, which my Citibank card is “friendly” with.

Conditions: Ensure that the day of the experiment, and the day before, is not a holiday in either the US (location of my account) or Brazil, in order to reduce ambiguity on the posted exchange rates. Perform the experiment during what would be considered normal business hours in both countries. Also retrieve posted exchange rates within the same time interval of the withdrawals.

Details: 100 reals each was withdrawn from Citibank, Banco do Brasil, and HSBC ATMs. All three withdrawals were done within one hour on Friday, July 15, 2005 between 1:00pm and 2:00pm Brazil time (noon-1pm NYC time).

Shortly after the third withdrawal I got on the Internet and logged into my Citi account and found the cost of each transaction. Here are the results:


cost (100R) cost (1R) rate per $

Citibank $43.18 $0.43180 2.31589
Banco $42.84 $0.42840 2.33427
HSBC $42.84 $0.42840 2.33427
(formatting doesn´t post nicely)
Note that there was no mention of an extraneous transaction fee or other related cost for any of these withdrawals.
Ambiguity: when I look up exchange rates on the net, I am unsure if the figures I see pertain to withdrawals I am making that day, or that this will be the set rate for the following day, once the business day is done and the trading stops. The following information was taken from oanda within 15 minutes of the third withdrawal; I’ve included the “previous day” quote to address the ambiguity:

Friday, July 15, 2005
1 US Dollar = 2.33850 Brazilian Real
1 Brazilian Real (BRL) = 0.42762 US Dollar (USD)
Median price = 2.33550 / 2.33850 (bid/ask)
Minimum price = 2.33150 / 2.33450
Maximum price = 2.35800 / 2.36000

Thursday, July 14, 2005 (previous day)
1 US Dollar = 2.35400 Brazilian Real
1 Brazilian Real (BRL) = 0.42481 US Dollar (USD)
Median price = 2.35100 / 2.35400 (bid/ask)
Minimum price = 2.32800 / 2.33100
Maximum price = 2.35380 / 2.35870
Observations: The Citibank cost is the highest. The other two banks gave identical prices. Notice that price given by the two other banks, 2.33427, can fit into the spread of either of the two dates for which I’ve posted the rates, whereas the Citi rate is above any posted amount. Note that the prices are calculated based on the transaction prices posted: I have no access to the internal workings of the banks’ calculation processes.

Conclusion: Hypothesis fails. Avoid Citibank in Brazil.

Additional notes: Something strange: with the Citi transaction, the ATM printout includes the exchange rate, and it reads 2.31 – hmmm. The correct two decimal round-off of the number I calculated is 3.2; it could be that the ATM printer merely clips off the extraneous decimal places. I am assuming this has to be the case, as such a rounding error in their calculations would have driven them out of business by now.

And now something about Banco do Brasil.
BoB is the most ubiquitous bank in the country, by my own observation. Nearly each branch has ATM machines, and nearly each one of those will have a machine hooked up to the Cirrus/Maestro/Visa/et al. system. (Of course, whether or not it’s functional when you get there is another story.) I’ve been using my Citibank ATM card in these banks since 2002, and I’ve been impressed: I’ve been to two-horse towns at the end of nowhere and there was a BoB ATM that let me pull cash.

I returned to Brazil in June for the first time this year. I went to a BoB in Rio, waited patiently for the machine with all the decals to become available, but when I put my card in I got a message that it could not read my card. Oh well, malfunctioning machine, what else is new? There was an HSBC just down the block so I took my business there, relieved to know the magnetic info on my card didn’t somehow get zapped. A few days later I tried the same BoB machine and got the same message. I decided to try another unmarked (no Visa/Maestro/et al decals) machine and got the friendly banner message that says “use a machine displaying the Visa/Maestro/… logos” and it shows a picture of what to look for. So, I now know of two “no go” messages: wrong-machine, and card-unreadable. I then went to another BoB branch, sought out the decaled machine, and again got the card-unreadable message. I also whipped out an ATM card I have with another bank (one that gives a truly shitty exchange rate) also on the same systems, and that one too got card-unreadable. Now I was getting worried: I was headed out to the sticks, where the only banks are BoB. If BoB had severed it’s ties to these international systems I was going to have to re-think my cash flow scheme. I went to Citibank and asked about this, and fellow said no, BoB does not accept Citi cards. I thought his answer was too easy, so I called the Citi international support number and spoke to someone in India. I asked if he knew of any change in the relationship with BoB. He took a few minutes (I assume researching the question), checked if there were security lockouts on my card, but came up with nothing. I went to a BoB office in downtown Rio and was told the problem was either with my card or with my bank; in other words, the problem is anywhere but here. Big help.

When the time came to leave Rio I pulled out enough cash to keep me a few weeks. I was in a small town in Minas and tried my card at the BoB branches. In one branch they had about 25 ATMs, three of which had the decals. One was out of order. I tried one and got the card-unreadable message – not good. But number three came through. I now knew that BoB was still hooked up to the systems. Another branch in that same town also had a machine to read my card, so I know there’s hope. I’m in Belo at the moment and have not had my card rejected yet.
If someone has any info on why these BoB machines fuck up, please post.

So, with Citibank´s lousy rates and BoB´s "we don´t know nothin´" attitude towards its machines, it looks like HSBC is the way to go for you Rio guys.

You're actually slightly wrong - don't use a Citibank account at Citibank. Try your experiment with both your Citi and non-Citi ATM card and while the Citi rate is always a little off, you will notice that the rate using your Citibank card will be slightly lower than the non-Citi card withdrawal. Note also the R$6.00 fee to use Citi vs. none for HSBC. Question - did Citi wave the R$6.00 fee to use the ATM machine with your Citi card?

Bottom line, IMHO - use HSBC in all cases to avoid Citi's point-of-sale fee, and whatever you do, don't use a Citi card in a Citi ATM, unless they wave the R$6.00 fee and you don't want to walk up to the closest HSBC branch.

I never encountered the $6 fee, I think that´s for non-Citi cards. The way I figured, a $6 fee would probably void any advantage, unless they gave a honkin´exchange rate, which I´d doubt, so I balked at recommending it.
My other ATM card is BofA, and their foreign currency transactions truly suck: well, at least they did the few times I tried, and I´m not inspired to look further into it.
So why not contribute to the experiment and verify if they do indeed give a better rate or not. Let´s eliminate the "maybe´s."

What do you hate about BofA? Assuming one has Advantage level and has no $5 fees the only negatives could be a 1% Visa/Plus fee (new in June) and/or a poor FX.

I have BofA as they're the best for domestic, but I am in the process of opening a second account (credit union maybe?) solely for international ATMs as that new 1% fee pisses me off (as much as I love them for waiving like 50 $5 fees YTD). Thus, I'm anxious to hear shared experiences.

Thanks

I did the following experiment a few times during the last years.

Go to Citibank. Pull R$ 1000 with a Citibank card. Then pull R$ 1000 with a Wells Fargo bank card.

Result: Exchange rate with Citibank card is alwasy 2-5 centavos lower

On the other hand, Wells Fargo Bank charged me US$ 2-3, now US$ 5 per withdrawal. I think the increase has to do with the fact that I don't keep the minimum balance requirement

Citibank never charges a fee for withdrawal at their own ATMs with their own Citibank cards. But, they screw you on the exchange rate.

FL: I don´t recall the details, but when I did the math for foreign transactions at BofA I deemed it a "grab your ankles" situation. This was two or three years ago, YMMV.
I don´t give a shit what they call the charges and excuses, all I care is what the total transaction comes out to.

I agree, a fee is a fee, whether it's line-itemed, hidden, or embedded in a poor FX.

I just was hoping someone would have specific data (other than the $5 fee which is waived or the new 1% Visa fee) regarding their FX copared to other banks.

This is my first trip, so little experience.

I have also noticed that citi gives a lower rate.
But the machines by blockbuster have worked every time.

I went through hell trying to get some of the other machines to work for me.
And the lines at the HSBC machines at the beginning of the month were horrendous.

As for the magnetic strip....I have seen great differences in various machines' ability to read my cards. (In the US)
I have the bad habit of carrying my cards in a wallet in my back pocket, and sitting on them. This destroys them.
In my experience, cash machine readers are generally better than cash register readers, but I have come across a lot of cash machines that can't read my cards. And with cash machines, you can't use the little plastic bag trick...(I've tried)

Bendejo, good analysis but what about Bradesco. They fucked me on the rate a few years back more like -.07
I have HSBC and I'm on the free checking promo and I dont get charged for any ATM transactions fees because of the limited california branches. I used it in Rio, BA and Costa Rica and it never failed or charged me a penny for fees.
If you guys can't open a HSBC account, try opening an online brokerage account like TDwaterhouse or Fidelity.com, both comes with a checkbook and a ATM/VISA card which can be used without fees. Just transfer the money online from your primary bank into one of these brokerage and your set.
At todays rate, why are you guys using ATM's? Aren't the cambios offering higher rates like +0.10

CN

I was in Rio last week and exchanged some US bills in a cambio in Copa along NS Avenida..
the rate was 2.45, lot better than the ATM rate of 2.31-2.33

From my experience the cambios outside of Rio, in the smaller towns like Porto Seguro, give even worse rates than the ATMs. Of course where there is no regular flow of foreigners there will not be cambios. I never changed cash dollars in a bank, with a teller etc. Someone should give that a try and report back. I was in India ages ago, and a bank exchange took hours, so the very idea makes me want to break out the garlic and crucifix (no anti-Hindu sentiment intended).

CN: last I looked at Bradesco was a few years back and I recall being unimpressed, so didn´t look back.