How to use the currency converter
The Convert tool shows the true cost of one conversion. Compare providers ranks several quotes for the same transfer.
- Choose the two currencies and the amount. The amount is in the currency you send.
- Enter the fixed fee and say how it is charged. Some providers add it on top, so you pay more than the amount; others take it out of the amount before converting.
- Enter the mid-market rate as units of the currency received per one unit sent. The default of 0.86 euros per dollar is only an example: take the current rate from a market data source at the moment you get your quote. If your source quotes the pair the other way round (dollars per euro), enter 1 divided by that number. The calculator warns you when a rate looks inverted.
- Enter the provider’s rate, from its quote screen or your statement, or switch to a markup percentage if that is what you know.
The results show what arrives, the all-in rate you effectively paid and how the cost splits between the markup and the fee. The chart repeats the calculation for smaller and larger transfers of the same type.
How the cost of a conversion is calculated
Every cost is measured against a perfect conversion: all your money exchanged at the mid-market rate with no fee.
Markup = 1 − Provider's rate ÷ Mid-market rate
Effective rate = Amount received ÷ Total paid
Total cost = Total paid − Amount received ÷ Mid-market rate
= Fixed fee + Amount converted × MarkupRates are units of the received currency per one unit sent. Total paid is the amount plus the fee when the fee is added on top, or just the amount when the fee is taken out of it. The amount converted is the amount minus the fee in the second case.
The cost in the received currency is the same gap seen from the other side: what the total paid would buy at the mid-market rate, minus what actually arrives.
A worked example
You send $2,000.00 to a euro account. The bank charges a $15.00 fee on top and converts at 0.8385 euros per dollar while the mid-market rate is 0.86.
The recipient gets €1,677.00. You paid $2,015.00, which at the mid-market rate is worth €1,732.90, so the transfer costs $65.00, or 3.23% of what you paid. Of that, $50.00 is hidden in the rate (a 2.50% markup) and only $15.00 is the visible fee. In euros, the recipient is €55.90 short of a perfect conversion.
The effective rate, 1 USD = 0.8323 EUR, folds both costs into one number you can compare across providers. If the bank took the fee out of the amount instead, the recipient would get €1,664.42.
The mid-market rate and the hidden markup
Currencies trade between banks at a bid price and an ask price. The mid-market rate sits halfway between them, and it is the fairest benchmark for what a currency is worth at a given moment. Retail providers buy currency near wholesale prices and sell it to you at a worse rate. The difference is their margin, and on most statements it never appears as a line item.
That is why “no fee” and “0% commission” offers can be expensive. A provider can show a zero in the fee column and earn its revenue entirely through the rate. Comparing fees alone rewards whoever hides the most in the rate. The two numbers worth comparing are the amount that arrives and the effective rate.
How large is a typical markup? It varies widely by provider, currency pair and channel. Specialist transfer services often stay under 1% on major currencies. Card network rates are usually close to mid-market, although many cards add a separate foreign transaction fee. Bank wires, airport kiosks and hotel desks are often several times higher. Less traded currencies cost more everywhere. Check your own quotes rather than relying on a rule of thumb.
Why the size of the transfer matters
The markup is a percentage, so it costs the same share of every transfer. The fixed fee is a flat amount, so it weighs heavily on small transfers and fades on large ones. With the same bank, fee and rate as the example:
| Amount sent | Fee | Total cost | Cost as % of amount paid |
|---|---|---|---|
| $200.00 | $15.00 | $20.00 | 9.30% |
| $2,000.00 | $15.00 | $65.00 | 3.23% |
| $20,000.00 | $15.00 | $515.00 | 2.57% |
On large transfers almost the whole cost is the markup, so a provider with a higher fee and a better rate often wins. On small ones the fee dominates, and a card or app with no fee and a modest markup can be cheaper. Changing the markup alone shows how much it matters: at the example amount, a 0.5% markup brings the total cost down to $25.00, while 4% raises it to $95.00.
Comparing providers
The comparison tool takes the rate and fee each provider quotes for the same transfer and ranks them by total cost against the mid-market rate. In the example, Online service B is cheapest at $13.55 (0.67%), and Exchange desk D is the most expensive at $100.00, a difference of $86.45 on a single transfer. The recipient gets €80.80 more with the cheapest quote.
Two practical points make the comparison fair. Take every quote at about the same time, because the mid-market rate moves through the day. And quote the same amount everywhere, because many providers lower their margin on larger transfers.
What this calculator does not include
- Live rates. Exchange rates are inputs, and the defaults are examples rather than current prices. The result is only as good as the two rates you enter.
- Intermediary and receiving bank charges on international wires, which are deducted along the way. Add them to the fixed fee if you know them.
- Percentage fees such as a card’s foreign transaction fee. Add them to the markup percentage, since they also scale with the amount.
- Rate movements between the quote and the moment the money is converted, if the provider does not lock the rate.
- Taxes and reporting. Large transfers can carry reporting requirements, and converting investment proceeds can create taxable currency gains in some countries. To see how a currency move changes an investment’s return, use the foreign investment return calculator.