Yes, banks exchange foreign currency, but they charge more than other routes

Most banks will exchange foreign currency for you, but the exchange rate they offer is not the rate you see online. Banks buy and sell currency at wholesale rates, then mark up the rate they give you — typically 1 to 3 percent above the mid-market rate, sometimes higher. That markup is how they profit on the transaction. You pay the difference between what the bank charges and what the actual market rate is at that moment.

The process is straightforward: you walk in with cash or a check in a foreign currency, or you request an exchange before traveling. The bank converts it at their rate, charges a fee (usually $15 to $50 depending on the currency and amount), and gives you the local currency or loads it onto a travel card. The whole thing takes a few days to a week for cash, longer for checks.

But because the markup and fees add up, banks are rarely the cheapest option. Specialized currency exchange services, online transfer platforms, and some credit unions often charge less. If you are moving a large amount or exchanging regularly, comparing rates before you commit matters.

Key Takeaways

  • Banks exchange foreign currency but charge a markup of 1 to 3 percent above the mid-market rate plus a separate fee of $15 to $50.
  • The total cost of a bank exchange is usually higher than what you would pay through a currency specialist or online transfer service.
  • Banks typically take 3 to 7 business days to process a currency exchange, longer if you are exchanging a check.
  • Comparing the all-in cost (markup plus fee) across banks and other providers before exchanging a large amount can save you hundreds of dollars.

What the markup and fee actually cost you

The markup is the real expense. If the mid-market rate is 1.10 USD per 1 EUR, a bank might offer you 1.07 USD per 1 EUR — that 0.03 difference is the markup. On $10,000, that costs you about $280. Add a $25 fee and you have paid $305 total for the exchange.

The fee itself varies by bank and currency. Major banks like Chase, Bank of America, and Wells Fargo typically charge $15 to $50 per transaction. Some banks waive the fee if you are a premium customer or if the amount is large enough. Regional banks and credit unions sometimes charge less or nothing at all.

The markup is harder to see because banks do not always list it separately. You have to ask what rate they are offering, then compare it to the mid-market rate (available free on XE.com or OANDA) to see the actual gap. Many people do not do this comparison and end up paying more than they realize.

How to get the rate before you commit

Call your bank and ask for a quote. Say you want to exchange a specific amount of a specific currency and ask them to tell you the rate they will charge and any fees. Write down the exact numbers and the date and time of the quote — rates change constantly, and the bank may only hold a quote for 24 to 48 hours.

Then check the mid-market rate at that same moment on XE.com or OANDA. Subtract the bank's rate from the mid-market rate to find the markup. Multiply the markup by the amount you are exchanging to see the dollar cost. Add the fee. That is your total cost.

Do the same with at least one other provider — a currency specialist like OFX or Wise, or another bank if you have accounts at multiple institutions. The difference can be substantial, especially for amounts over $5,000.

Banks versus currency specialists and online services

Currency specialists like OFX, Wise, and XE Money Transfer typically charge lower markups (0.5 to 1.5 percent) and smaller fees ($0 to $15). They are designed for this work and operate on thinner margins. The tradeoff is that they usually take 1 to 3 business days to deliver the money, and you have to set up an account online first.

Online transfer services like PayPal and Remitly also exchange currency, though their rates and fees vary widely. PayPal's markup can be 2 to 4 percent, which is worse than a bank. Remitly is cheaper for some corridors (routes between countries) and more expensive for others.

Credit unions sometimes offer better rates than big banks, especially if you are a member. Call ahead and ask. Some credit unions have partnerships with other credit unions worldwide and can exchange currency at lower cost.

Airport and hotel exchanges are almost always the worst option. Markups can reach 5 to 10 percent. Use them only if you have no other choice and only for small amounts.

When to exchange before you travel versus when you arrive

If you are traveling to a country with a major currency (EUR, GBP, JPY, CAD, AUD), exchanging before you leave usually costs less because competition is higher and banks stock these currencies. You can also compare rates from home without time pressure.

If you are traveling to a country with a smaller or less common currency, you may have no choice but to exchange in-country or use an ATM there. Many travelers find that withdrawing cash from an ATM in the destination country gives a better rate than exchanging before they leave, because ATMs use wholesale rates and charge a flat fee rather than a percentage markup. Check with your bank about ATM fees in the country you are visiting.

For large amounts, exchange before you travel so you can compare rates and lock in a rate if the provider offers it. For small amounts (under $500), the difference is usually small enough that convenience matters more than the exact rate.

What happens if you need currency urgently

If you need currency the same day or next day, your options narrow. Most banks can provide major currencies same-day if you go in person with cash, though they may charge a premium for the rush. Specialized services usually cannot match this speed.

If you are leaving tomorrow and need currency today, call your bank first thing in the morning and ask if they have the currency in stock and can exchange it same-day. If not, ask if they can order it for next-day pickup. Some branches can, some cannot — it depends on the currency and the branch.

If your bank cannot help, find a currency exchange shop in your area (search "currency exchange near me"). These are independent businesses, not banks, and they often have more currencies in stock and faster service. Their rates are usually worse than banks, but if you need the money today, you may have no choice.

Exchanging checks and wire transfers

If you have a check in a foreign currency, banks can exchange it, but the process is slow. The bank deposits the check into a clearing account, waits for it to clear in the foreign country (which can take 2 to 4 weeks), then exchanges it and deposits the proceeds into your account. You pay a fee for this service, usually $25 to $50, plus the exchange markup.

If someone is sending you money from abroad, a wire transfer is faster and often cheaper than a check. The sender's bank sends the money directly to your bank, which takes 1 to 3 business days. Your bank exchanges it at their rate and deposits it. You still pay the markup and a wire fee (usually $15 to $25), but at least the money arrives faster.

For large or frequent international transfers, ask your bank if they offer a better rate for wire transfers. Some do, especially if the amount is over $10,000.

Frequently Asked Questions

Do all banks charge the same exchange rate?

No. Every bank sets its own markup and fee. A major bank like Chase may charge 2 percent markup plus $25, while a credit union might charge 0.5 percent markup plus $10. Always get a quote from your specific bank and compare it to at least one other provider before exchanging a large amount.

Can I lock in an exchange rate before I travel?

Some banks and currency specialists offer rate locks, but they usually charge a fee for it and only hold the rate for 24 to 48 hours. For most travelers, the rate lock is not worth the cost unless you are exchanging a very large amount and the rate is moving against you.

Is it better to use an ATM in the foreign country or exchange before I leave?

For major currencies, exchanging before you leave usually costs less because you can compare rates. For less common currencies, using an ATM in the destination country often gives a better rate because ATMs use wholesale rates. Check your bank's ATM fees in that country first — some charge $3 to $5 per withdrawal.

What if my bank does not have the currency I need?

Ask if they can order it. Most banks can order major currencies for next-day or same-day pickup, though they may charge a rush fee. If your bank cannot help, find an independent currency exchange shop or use an online transfer service, which can deliver the currency to you or to a pickup location.

Do I have to exchange currency at a bank, or can I use another service?

You do not have to use a bank. Currency specialists, online transfer services, credit unions, and independent exchange shops all offer currency exchange. Compare rates and fees across all of them before deciding — the cheapest option is rarely the bank.