How Much Does It Cost To Exchange Money

how much does it cost to exchange money


The cost of exchanging money is an often overlooked aspect when travelling abroad, transferring funds, or dealing with foreign currencies for business. Knowing how much it costs to exchange money can help one plan ahead and save on possible fees and charges.

The Cost of Exchanging Currency at Banks

Traditionally, financial institutions are the trusted sources for currency exchange. They deal with all kinds of currencies and offer a range of services. However, the cost of exchanging money in such establishments can be relatively high. On top of the exchange rate, banks also impose service fees, which are often fixed regardless of the amount you're exchanging. This service fee can range between $3 to $15 per transaction, depending on the bank and the type of your account.

Foreign Currency Exchange Bureau

Third-party currency exchange bureaus also exist that quote their buy and sell rates based on the market conditions. This rate is often different from the rate given by banks and can in some cases, be highly in your favor. Also, while some exchange bureaus charge commission fees on each transaction, some do not. These fees can be fixed, a flat percentage of the total amount exchanged or a combination of both. It’s essential to inquire beforehand.

Using a Credit Card for Foreign Transactions

Credit cards may also be used for foreign transactions. However, it's important to realize that most providers charge a foreign transaction fee that usually ranges from 2% to 3% of the total amount. Additionally, the exchange rate used is the one at the time of the transaction, which may not necessarily be the best.

Online Money Transfer Services

Platforms like PayPal, TransferWise, and others are growing in popularity for international money transfers. However, these services have their costs too. PayPal, for example, charges a fee between 0.5% to 7.4% of the amount being transferred in addition to a fixed fee based on the currency. TransferWise advertises transparent rates and uses the mid-market exchange rate. Still, they impose a variable fee based on the sending and receiving country.

Pre-paid Travel Cards

Pre-paid travel cards are also a convenient option to travel abroad without carrying cash. These cards can be loaded with the currency of the country you are traveling to. Fees for such cards can include an initial setup cost, top-up charges, exchange rate margins, ATM withdrawal charges, and even inactivity fees.


So, the cost of exchanging money can vary greatly depending on where you choose to exchange your currency. It can be free in certain cases, or the fees can quickly add up. You have various options to consider, including banks, currency exchange bureaus, credit cards, online transfer services, and pre-paid currency cards. Remember, it's not only about who offers the best exchange rate, but also about service fees, convenience, and the amount you are planning to exchange. Make sure to do your research and choose the best option for your needs.