Yes, most banks exchange currency, but their rates and fees often cost you more than other options

Most banks that serve regular customers will exchange foreign currency for you — they buy it from you, sell it to you, or both. But banks are not currency traders. They buy and sell currency through larger financial institutions, then mark up the price to cover their costs and make a profit. That markup is usually 2 to 8 percent above the real market rate, depending on the bank and the currency.

Whether you should use your bank depends on what you need. If you need cash in a specific currency before a trip and your bank is convenient, it may be worth the cost. If you are moving money across borders regularly or in large amounts, other services almost always cost less. The choice comes down to comparing what your bank charges against what you would pay elsewhere.

Key Takeaways

  • Banks exchange currency at a markup of 2 to 8 percent above the market rate, meaning you pay more than the real value of the money.
  • You can usually order foreign cash from your bank in advance, but it takes several business days and may require a minimum amount.
  • Online currency services and wire transfer providers often charge less than banks for moving money between countries.
  • The real exchange rate changes constantly, so the cost difference between your bank and another service can vary from day to day.
  • If you need physical cash in another country, ATMs in that country usually offer better rates than exchanging cash before you leave.

How banks set their exchange rates

Banks do not set the exchange rate themselves. The real rate — called the mid-market rate — is set by the global currency market and changes throughout the day. Your bank looks up that rate, then adds a percentage on top. If the mid-market rate for US dollars to euros is 0.92, your bank might charge you 0.88 or 0.90 instead, keeping the difference.

The markup covers the bank's cost to source the currency, the risk they take holding it, and their profit. Larger banks often have lower markups because they trade in bigger volumes. Smaller banks and credit unions may charge more because they handle fewer currency transactions. Some banks also charge a flat fee on top of the markup — anywhere from $5 to $25 per transaction.

You can ask your bank what rate they will give you before you commit. Many banks let you lock in a rate for a few days, which protects you if the market moves against you while you wait for the cash.

Ordering foreign cash from your bank

If you need physical bills in another currency, most banks can order them for you. You go to a branch, tell them what currency you need and how much, and they order it from a currency supplier. The cash arrives in 3 to 10 business days, depending on the currency and the bank's supplier.

Some banks require a minimum order — often $500 or $1,000 — and some charge a fee just to place the order. A few banks do not stock certain currencies at all and will tell you it is not available. If your bank cannot help, you can sometimes order directly from a currency exchange service like Travelex or OANDA, though those typically charge more than banks do.

Ordering in advance is safer than carrying large amounts of cash, but it is slower and more expensive than using an ATM once you arrive in the other country. If you have time and flexibility, using a foreign ATM usually costs less.

When to use your bank versus other services

Use your bank if you need cash quickly and convenience matters more than cost. If you are leaving for a trip in two days and need euros, your bank is faster than waiting for an online service to verify your identity and mail you a card.

Use an online currency service or wire transfer provider if you are moving money between bank accounts in different countries or sending money to someone abroad. Services like Wise, OFX, and Remitly charge less than banks for these transfers because they do not have the overhead of physical branches. They also show you the exact rate and fee before you commit, so there are no surprises.

Use a foreign ATM if you are traveling and need cash. ATMs in the country you are visiting almost always offer rates closer to the mid-market rate than your bank will, even though the ATM operator charges a fee. You withdraw less cash upfront, which is also safer than carrying a large amount.

What documents and information you will need

To exchange currency at your bank, bring your ID and your debit card or account number. If you are ordering a large amount of cash — usually more than $10,000 — the bank will ask for additional information under anti-money-laundering rules. They may ask where the money is going and why you need it. This is routine and does not mean anything is wrong.

If you are sending money to another country through your bank's wire transfer service, you will need the recipient's bank account number, routing number (or SWIFT code for international transfers), and the bank's name and address. Have this information ready before you go to the bank, because the wire cannot be sent without it.

Comparing costs: bank versus alternatives

The only way to know whether your bank is the cheapest option is to compare. Call your bank and ask: what is the exchange rate you would give me today, and is there a fee? Then check the mid-market rate on XE.com or OANDA.com — these sites show the real rate with no markup. Calculate the difference in dollars.

Then check one online service. Wise shows you the exact rate and fee before you send anything. OFX and Remitly do the same. Spend five minutes comparing, and you will know whether your bank is worth using or whether you should go elsewhere.

The difference can be significant. If you are exchanging $5,000, a 5 percent markup costs you $250. An online service charging 1 percent costs you $50. That gap is worth checking.

What happens if you need to reverse a currency exchange

If you ordered cash from your bank and changed your mind, most banks will take it back within a certain window — usually 30 days — but they will charge you a fee and give you a worse rate on the way back. You lose money twice: once on the original markup and again on the reversal. Some banks will not take back cash at all if it has left the branch.

If you sent money through a wire transfer and made a mistake, reversing it is much harder. The money has already left your bank and arrived at the recipient's bank. You would have to contact the recipient's bank directly and ask them to return it, which they may refuse. Always double-check wire transfer details before you send.

Frequently Asked Questions

Do all banks exchange currency?

Most banks do, but not all. Smaller banks and credit unions may not keep foreign cash on hand or may only exchange it for customers who have accounts with them. Call your bank first to confirm they offer the service and what currencies they stock.

What is the difference between exchanging cash and wiring money?

Exchanging cash means you get physical bills in another currency. Wiring money means the bank transfers funds electronically from your account to another account in another country. Wires are faster for large amounts and safer than carrying cash, but they cost more per transaction.

Is it cheaper to exchange money at an airport?

No. Airport currency exchanges charge some of the highest markups available — often 8 to 15 percent above the mid-market rate. Use them only if you have no other choice and need cash when ready upon arrival.

Can I exchange currency online through my bank?

Some banks let you order currency through their website, but most still require you to pick it up at a branch or have it mailed to you. A few banks partner with online currency services to offer better rates online than in branches. Ask your bank whether this option is available.

What if I exchange currency and the rate drops the next day?

You locked in your rate when you completed the exchange. The rate dropping does not affect you — you already have the cash or the money has already been sent. If the rate had risen, you would have been protected by locking in early. This is why some people order currency in advance when they think rates are favorable.