What this calculator does
The advertised exchange rate is rarely the rate you get. Most providers earn their money by quoting a rate slightly worse than the market one, sometimes alongside a fixed fee. The margin is invisible on the receipt, which is exactly why it is worth calculating.
This calculator compares what you actually receive against what the market rate would have given, and reports the difference as both an amount and a percentage. That percentage is the honest basis for comparing providers, including ones that advertise “no fees”.
The formula
Any fixed fee is deducted first, then the remainder is converted at the provider’s effective rate: the market rate reduced by the margin. Comparing that against the market rate applied to the full amount gives the total cost of converting.
| Term | Meaning |
|---|---|
| Market rate | The interbank or mid-market rate, the midpoint between buy and sell. |
| Margin | The percentage by which the provider’s rate is worse than the market rate. Also called the spread. |
| Effective rate | The rate you actually receive after the margin is applied. |
The inputs explained
| Field | What to enter |
|---|---|
| Amount to convert ($) | The amount you are converting, in your starting currency. |
| Market exchange rate | The mid-market rate: the rate shown by a search engine or a currency data site, not the one your provider quotes. |
| Provider margin on the rate (%) | How much worse the provider’s rate is than the market rate, as a percentage. Compare their quoted rate against the market rate to find it. |
| Fixed fee ($) | Any fixed transfer or transaction fee. |
When to use it
Comparing transfer providers
Enter each provider’s margin and fee in turn. The total cost of converting is the only figure that compares them fairly, since one may be cheaper on fees and worse on rate.
Checking a “no fee” offer
Zero-fee providers usually earn a wider margin instead. Set the fee to zero and raise the margin to what they actually quote: the cost often exceeds a provider charging an explicit fee.
Deciding whether to split a transfer
Fixed fees favour fewer, larger transfers; margins are proportional and therefore neutral to size. If the fee is significant relative to the amount, consolidating is worth real money.
Budgeting for travel money
Airport bureaux and hotel exchanges commonly run margins of 5% or more. Running the numbers before you travel usually justifies arranging currency in advance.
Worked examples
Every figure in the tables below is produced by this page’s own calculator at build time, so the numbers and the tool always agree. Select any row to load that scenario.
What the provider’s margin costs you
Converting $5,000 at a market rate of 0.65, with a $15 fixed fee, across a range of provider margins.
| Provider margin | You receive | Effective rate | Total cost of converting |
|---|---|---|---|
| 0% | 3,240.25 | 0.6500 | 9.75 (0.300%) |
| 0.5% | 3,224.05 | 0.6468 | 25.95 (0.798%) |
| 1% | 3,207.85 | 0.6435 | 42.15 (1.30%) |
| 1.5% | 3,191.65 | 0.6403 | 58.35 (1.80%) |
| 3% | 3,143.04 | 0.6305 | 106.96 (3.29%) |
| 5% | 3,078.24 | 0.6175 | 171.76 (5.29%) |
How fixed fees scale with the amount
The same provider terms applied to different transfer sizes.
| Amount converted | You receive | Total cost of converting |
|---|---|---|
| $200 | 118.45 | 11.55 (8.89%) |
| $500 | 310.52 | 14.48 (4.45%) |
| $1,000 | 630.65 | 19.35 (2.98%) |
| $5,000 | 3,191.65 | 58.35 (1.80%) |
| $20,000 | 12,795.40 | 204.60 (1.57%) |
| $50,000 | 32,002.90 | 497.10 (1.53%) |
Questions
What is the mid-market rate?
The midpoint between the buying and selling rates in the wholesale currency market: the rate you see on search engines and financial data sites. No retail provider gives it exactly, but the gap is how you measure their cost.
How do I find a provider’s margin?
Divide their quoted rate by the mid-market rate and subtract from one. If the market rate is 0.6500 and they quote 0.6400, the margin is about 1.54%.
Are “zero fee” services actually free?
Almost never. They typically build a wider margin into the rate. Comparing total amount received is the only reliable test, and this calculator produces exactly that figure.
Should I use my card overseas instead?
It depends on the card. Some charge a foreign transaction fee of around 3% on top of a margin; others charge neither. Enter your card’s terms as the margin and fee to compare it against a transfer provider.
Does the calculator use live rates?
No: you enter the rate. That keeps it accurate whenever it is used and lets you model a rate you have actually been quoted rather than one that may already be stale.
For a unit-by-unit conversion of measurements rather than money, see the unit converters.