Most banks exchange foreign currency, but the rates and fees vary widely

Nearly every major bank in the US will exchange foreign currency for you, but the transaction usually costs more than exchanging money elsewhere. Banks charge a spread — the difference between what they pay for the currency and what they charge you — plus sometimes an explicit fee. A bank might quote you an exchange rate that is 2 to 5 percent worse than the real market rate, meaning you lose money on the conversion itself before any flat fee is added.

The banks that offer the best rates tend to be the ones you already use, because they can process the exchange faster and with fewer steps. However, even your primary bank may not keep all currencies in stock, especially less common ones. If your bank does not have the currency you need, they will order it, which adds 3 to 7 business days to the timeline and sometimes raises the cost.

Online banks and credit unions sometimes offer better rates than brick-and-mortar branches, but not always — you have to ask and compare. The real savings usually come from using a currency exchange specialist or a wire transfer service instead of a bank, but those routes require more planning and are not available everywhere.

Key Takeaways

  • Banks charge a markup on foreign currency exchange that typically costs you 2 to 5 percent more than the real market rate, plus sometimes an additional flat fee of $5 to $25.
  • Major banks like Chase, Bank of America, Wells Fargo, and Citibank all exchange currency at their branches, but availability and rates differ by location and currency type.
  • Ordering a currency your bank does not have in stock takes 3 to 7 business days and may increase the cost because the bank has to source it from a wholesaler.
  • Credit unions and online banks sometimes offer better rates than traditional banks, so it is worth calling your institution to ask for their current spread before exchanging at a branch.
  • Specialist currency exchange services and international wire transfer platforms often charge less than banks, but require more setup and may not be convenient for small amounts.

How banks price foreign currency exchanges

When you exchange money at a bank, you are paying two costs: the spread and sometimes a flat fee. The spread is the difference between the wholesale rate (what banks actually pay for currency) and the retail rate (what they charge you). A bank might buy euros at 1.08 USD per euro but sell them to you at 1.13 USD per euro — that 0.05 difference is the spread, and it costs you about 4.6 percent on that transaction.

On top of the spread, many banks charge a flat fee for the exchange itself. This fee ranges from $5 to $25 depending on the bank and the amount you are exchanging. Some banks waive the fee if you are a premium customer or if you exchange a large amount, but you have to ask. The total cost of exchanging $1,000 at a typical bank can easily be $50 to $100 when you add the spread and the fee together.

The spread changes daily because currency markets move constantly. A bank's quoted rate in the morning may be different by afternoon. If you are exchanging a large amount, ask the bank to lock in a rate for a set number of hours so you know exactly what you will pay before you commit.

Which major banks exchange foreign currency

The largest US banks all exchange foreign currency at their branches, though not all branches carry all currencies. Chase, Bank of America, Wells Fargo, and Citibank are the most common places to exchange money because they have branches everywhere and keep the most common currencies in stock — euros, Canadian dollars, British pounds, Japanese yen, Mexican pesos, and a few others.

Smaller regional banks and credit unions also exchange currency, but the process is often slower because they order from a wholesaler rather than keeping inventory. If your bank is not one of the major four, call your branch and ask whether they exchange the specific currency you need and how long it takes if they have to order it.

Online banks like Charles Schwab and Ally do not have physical branches, so they cannot hand you cash in a foreign currency. However, some online banks offer currency exchange as part of their international transfer services, which is useful if you are sending money abroad rather than getting cash before a trip. Ask your online bank whether they offer this service and what their rates are.

How to find the best rate at your bank

Call your bank's foreign exchange desk or visit a branch and ask for their current spread on the currency you need. Do not rely on the rate shown on their website, because it changes throughout the day and may not be the rate you actually receive. Ask specifically: "What is your spread on euros today?" or "What rate would you charge me to exchange $2,000 to British pounds?" Get a quote in writing or note the time and the person's name so you have proof of what they promised.

Compare that rate to the real market rate, which you can find on XE.com, OANDA, or your bank's own website under "exchange rates." If your bank is charging more than 3 percent above the market rate, ask whether they can do better or whether a different branch has a better rate. Some branches negotiate rates for larger exchanges.

If you are a premium customer — someone with a high balance, multiple accounts, or a business relationship with the bank — mention that when you call. Premium customers sometimes get better rates or waived fees. If you are not premium, ask whether you can become one or whether the bank has a promotion running.

Ordering currency your bank does not have in stock

If your bank does not keep the currency you need on hand, they will order it from a currency wholesaler, which takes 3 to 7 business days. During that time, the exchange rate can move against you, and the bank may lock in a rate that is even worse than their normal spread to protect themselves from that risk. Some banks charge an additional fee for ordering currency — sometimes $15 to $30 on top of the regular exchange fee.

To avoid this delay and extra cost, order currency as far in advance as possible. If you know you need Japanese yen in two weeks, call your bank today and place the order. The bank will hold the currency for you, usually for up to 30 days, at the rate they quote you when you order. This also protects you if the rate moves in your favor — you lock in the better rate.

If you need currency urgently and your bank cannot order it in time, ask whether they can wire the money to a currency exchange specialist abroad, or whether they can connect you with a partner bank that has the currency in stock. Some banks have relationships with other institutions that can speed up the process.

Alternatives to bank currency exchange

Currency exchange specialists like Travelex, OFX, and Wise often charge less than banks because they do not have the overhead of a full banking operation. Wise, in particular, uses the real market rate with a small transparent fee, which usually costs less than a bank's spread. However, these services work best for larger amounts or transfers, not for getting cash before a trip.

If you are sending money to another country, a wire transfer service or international money transfer platform may be cheaper than exchanging at a bank and then wiring the money. Services like Wise, OFX, and Remitly show you the exact rate and fee upfront before you commit, so you know exactly what you are paying.

If you are traveling and need cash, some credit unions offer better rates than banks and may waive fees for members. ATMs abroad usually give you a better rate than any exchange service, though your bank will charge you a foreign ATM fee (usually $2 to $5). For a trip, it is often cheapest to withdraw cash from an ATM abroad and pay the ATM fee than to exchange money before you leave.

What to do if your bank's rate seems too high

If you think your bank is overcharging you, ask to speak with a manager and request a better rate. Banks have some flexibility, especially for larger amounts or loyal customers. If the manager says no, ask whether a different branch or the bank's foreign exchange desk can do better. Sometimes the main office has better rates than local branches.

If you are still not satisfied, switch to a different bank for the exchange or use a currency specialist. You are not obligated to exchange at your primary bank, and shopping around for a better rate takes only a few phone calls. For amounts over $5,000, the difference between a 3 percent spread and a 1 percent spread can be hundreds of dollars, so it is worth the effort.

Keep records of the rate you were quoted, the rate you actually received, and any fees charged. If there is a discrepancy, contact the bank and ask for an explanation. Banks sometimes make mistakes, and they will correct them if you catch them quickly.

Frequently Asked Questions

Can I exchange foreign currency at any bank branch?

Most major bank branches exchange currency, but not all branches carry all currencies. Call ahead to confirm your branch has the currency you need in stock. If they do not, they can order it, which takes 3 to 7 business days.

What is the difference between the exchange rate on the bank's website and what I actually pay?

The rate on the website is usually the mid-market rate, which is what banks pay each other. When you exchange money, you pay the bank's retail rate, which includes their spread — typically 2 to 5 percent higher. The bank also may charge a flat fee on top of that.

Do credit unions exchange foreign currency?

Many credit unions exchange currency, and some offer better rates than banks because they have lower overhead. Call your credit union and ask what currencies they have in stock and what their spread is. Membership-only credit unions sometimes offer this service only to members.

Is it cheaper to exchange money before I travel or use an ATM abroad?

For most trips, using an ATM abroad is cheaper than exchanging at a bank before you leave. You will pay an ATM fee (usually $2 to $5) plus your bank's foreign transaction fee, but the exchange rate is usually better than what a bank charges. For very short trips or small amounts, the difference may not matter.

Can I lock in an exchange rate before I exchange the money?

Yes. Call your bank and ask them to hold a rate for you. Most banks will lock in a rate for 24 to 48 hours, and some will hold it longer for larger amounts. Get the locked rate in writing with the expiration time so you have proof.