Yes, banks exchange currency, but their rates and fees are usually worse than other options
Most banks will exchange foreign currency for you, either before you travel or when you return home with leftover cash. However, banks typically charge a markup on the exchange rate — meaning they buy the currency from you at a lower rate than the market rate, or sell it to you at a higher rate. They also often charge a flat fee per transaction, usually between $5 and $15. For small amounts, these costs can eat up 5 to 10 percent of what you're exchanging.
The exchange rate a bank offers is not the same as the mid-market rate you see online. The mid-market rate is what banks pay each other. Your bank's rate is worse — intentionally — because that difference is how they make money on the transaction. The size of that markup varies by bank and by currency, so calling ahead to ask for their rate on your specific currency pair is the only way to know what you'll actually get.
Key Takeaways
- Banks exchange currency but charge a markup on the rate plus a flat fee, which can cost you 5 to 10 percent on smaller amounts.
- The exchange rate your bank offers is always worse than the mid-market rate you see quoted online.
- You can order foreign currency in advance at most banks, but it takes several business days and costs more than exchanging at the counter.
- Credit unions, online currency services, and airport exchanges have different rates and fees — comparing them before you travel saves money on larger amounts.
- Withdrawing cash from an ATM in the destination country usually gives you a better rate than exchanging before you leave.
How to order currency through your bank before traveling
If you want to carry foreign cash when you arrive, most banks can order it for you. You call or visit a branch, tell them the currency and amount you need, and they order it from their currency supplier. This usually takes 3 to 7 business days, so plan ahead if you're leaving soon.
The bank will charge you the markup rate plus a flat fee — often $10 to $20 for the order itself. You pick up the cash at your branch or have it mailed to you. Some banks waive the order fee if you're a premium customer or if you order a large amount, so it's worth asking. The rate they quote you when you place the order is the rate you pay, even if the market moves before you pick it up.
Exchange rates at the counter versus online currency services
If you walk into a bank branch and ask to exchange currency on the spot, you'll pay the same markup as an advance order, but you might get the cash immediately instead of waiting a week. However, not all branches keep all currencies in stock — popular ones like euros and Canadian dollars are usually available, but less common currencies may not be.
Online currency services like OFX, Wise, and XE Money Transfer often offer rates closer to mid-market than banks do, and they charge a transparent fee upfront instead of hiding it in the rate. You order online, they deliver to your home or you pick up at a partner location. For amounts over $1,000, the difference in rate can save you $50 or more. These services take 1 to 3 business days for delivery.
Airport currency exchanges exist for convenience, not value. Their rates are typically 5 to 15 percent worse than banks, and their fees are higher. Use them only if you arrive without local currency and have no other option.
Using ATMs in the destination country
For most travelers, withdrawing cash from an ATM in the country you're visiting gives you the best exchange rate. Your bank charges an ATM fee — usually $2 to $5 per withdrawal — but the exchange rate is typically the mid-market rate or very close to it. The foreign bank that owns the ATM may also charge you a fee, which varies widely.
This works best if you withdraw larger amounts less often, because each withdrawal costs a fee. Withdrawing $500 once costs less than withdrawing $100 five times. Before you travel, confirm with your bank that your debit card will work overseas and ask about their ATM fees in the countries you're visiting — some banks have partnerships that waive fees in certain places.
Credit cards and debit cards for currency exchange
When you use a credit card or debit card to pay for something in a foreign currency, your card issuer converts it at their rate and charges you a foreign transaction fee, usually 1 to 3 percent. This is different from currency exchange at a bank, but it's another cost to know about. Some credit cards marketed to travelers waive the foreign transaction fee, so if you travel often, switching cards might save you money.
The exchange rate your card issuer uses is usually better than what a bank charges for cash exchange, but worse than the mid-market rate. You don't see the rate until the charge appears on your statement, so you can't shop around. For this reason, using a card is often cheaper than exchanging cash at a bank, but more expensive than withdrawing from an ATM.
What to do with leftover foreign currency when you return
If you come home with cash you didn't spend, your bank will exchange it back to your home currency — but at an even worse rate than they charged you to buy it. The markup works both ways. Some banks charge an additional fee to exchange currency back, on top of the rate markup.
Before exchanging leftover cash, compare the bank's rate to online currency services. Some online services will buy back foreign currency, though not all of them do. If the amount is small — under $50 or $100 — the fees and markup might cost you more than the cash is worth, so keeping it for your next trip to that country might make sense.
Comparing costs across different exchange methods
| Method | Rate Quality | Typical Fees | Speed | Best For |
|---|---|---|---|---|
| Bank advance order | Marked up 2–5% | $10–$20 order fee | 3–7 business days | Wanting cash before you leave |
| Bank counter exchange | Marked up 2–5% | $5–$15 per transaction | Same day (if in stock) | Last-minute needs, common currencies |
| Online currency service | Marked up 1–2% | $5–$15 flat fee | 1–3 business days | Larger amounts, better rates |
| ATM withdrawal abroad | Mid-market or near it | $2–$5 ATM fee | Immediate | Best rate, most travelers |
| Credit/debit card payment | Marked up 1–3% | 1–3% foreign transaction fee | Immediate | Convenience, no cash needed |
| Airport exchange | Marked up 5–15% | $10–$25 per transaction | Same day | Emergency only |
Frequently Asked Questions
Do all banks charge the same exchange rate?
No. Each bank sets its own markup on top of the mid-market rate, and the markup varies by currency and by how much you're exchanging. Calling two or three banks to compare their rates on your specific currency pair takes 10 minutes and can save you $20 or more on a $1,000 exchange.
Can I lock in an exchange rate before I travel?
Yes, when you order currency in advance, the bank quotes you a rate and that's the rate you pay when you pick it up, even if the market moves. Online currency services also let you lock in a rate for a set period, usually 24 to 48 hours. This protects you if the currency is moving against you, but you pay for that protection through a slightly worse rate.
Is it better to exchange money before I leave or after I arrive?
For most people, withdrawing cash from an ATM after you arrive gives you the best rate. If you're uncomfortable carrying large amounts of cash or arriving without any local currency, exchanging some money before you leave is reasonable — just exchange only what you'll need for the first day or two, then use the ATM.
What happens if my bank doesn't have the currency I need?
If your bank doesn't stock the currency, they can order it from a supplier, which takes longer and may cost more. Online currency services often carry more currencies than banks do, so they may be faster and cheaper. For very rare currencies, you may need to order weeks in advance or use a specialty currency dealer.
Do I have to exchange currency at my own bank?
No. You can use any bank, credit union, or currency service. You don't need an account with them. However, non-customers sometimes pay higher fees, so calling ahead to ask is important. Online currency services don't require you to be a customer either, and they often have better rates than banks.