Most banks exchange foreign currency, but the rates and fees vary widely

Nearly every bank in the United States will exchange foreign currency for you, but the actual mechanics depend on whether you walk in with cash or need currency before you travel. Banks buy and sell foreign currency at rates that differ from the real-time market rate—the difference is how they make money on the transaction. A bank might buy euros from you at 0.92 per dollar but sell euros to you at 0.88 per dollar, pocketing the spread. Some banks charge an additional flat fee on top of this spread; others do not.

The currency you can exchange varies by bank and branch. Major banks like Chase, Bank of America, Wells Fargo, and Citibank typically stock the most common currencies—euros, British pounds, Canadian dollars, Japanese yen, Mexican pesos, and Chinese yuan. Smaller regional banks or branches in less populated areas may only exchange a handful of currencies or require you to order currency in advance. If you need a less common currency, you may have to order it and wait several business days, or use a currency exchange specialist instead.

Key Takeaways

  • Most banks exchange foreign currency at rates worse than the real-time market rate, with spreads ranging from 1 to 3 percent depending on the bank and currency.
  • You can exchange currency in person at a bank branch, by phone or online for delivery, or sometimes at an airport branch, though airport rates are typically the worst.
  • Banks usually require advance notice for less common currencies and may charge ordering fees or require a minimum purchase amount.
  • The actual rate you receive depends on when the bank locks in the rate—some lock it when you order, others when you pick up or receive the currency.

How banks set their exchange rates

Banks do not set their own rates from scratch. They use wholesale rates from currency markets as a starting point, then add a markup. The wholesale rate—what banks pay each other for currency—changes constantly throughout the trading day. When you see a bank's advertised rate, that rate is already marked up from the wholesale rate.

The markup varies by bank and by currency. Major currencies like euros and pounds typically have smaller markups (1 to 2 percent) because banks trade them constantly and can move them easily. Exotic currencies or those with lower trading volume carry larger markups (2 to 4 percent or more) because the bank takes on more risk holding them. Some banks also charge a separate transaction fee—$5 to $15 is common—on top of the rate markup.

The rate you actually receive also depends on timing. If you order currency online and pick it up in branch, the bank may lock in the rate when you place the order, or it may lock in the rate when you pick it up. If you order for delivery, the rate locks when the bank ships it. Always ask when the rate locks before you commit to an order.

Exchanging currency in person at a branch

Walking into a branch with cash to exchange is the simplest option if you have time. You hand over your dollars, the teller counts them, applies the bank's rate, and gives you foreign currency. The whole transaction takes 10 to 15 minutes if the currency is in stock. You pay the spread and any transaction fee the bank charges, but you walk out with physical currency when ready.

Not every branch keeps every currency on hand. Call ahead or check the bank's website to confirm the currency you need is available. If it is not, you can usually order it for pickup in 2 to 5 business days. Some banks waive the transaction fee if you order in advance; others do not. Ask about this when you place the order.

Ordering currency for pickup or delivery

If you do not have time to visit a branch or need a currency the branch does not stock, you can order online or by phone. Most banks let you order through their website or mobile app; you specify the amount and currency, and the bank tells you when it will be ready. Pickup is usually 2 to 5 business days later at your branch. Some banks also offer delivery to your home, though this typically costs extra ($10 to $25) and takes longer.

When you order online, the bank usually shows you the rate at the time you place the order and tells you when that rate expires—often 24 to 48 hours. If you do not lock in the rate during that window, you may have to reorder at a new rate. Some banks let you lock in a rate by phone as well, which can be useful if you are ordering a large amount and want certainty.

Delivery orders work the same way, but the currency ships to your address rather than waiting at a branch. This is useful if you live far from a branch or need currency after hours, but it costs more and you do not have the currency until it arrives. Delivery typically takes 3 to 7 business days depending on the bank.

Airport currency exchange and why to avoid it

Most major airports have currency exchange booths run by the airport, by banks, or by independent exchange companies. These are convenient if you land and realize you need local currency when ready, but the rates are almost always worse than what you would get at a bank branch. Airport exchanges typically mark up currency 3 to 5 percent or more, and some charge additional fees on top of the markup.

If you must exchange at an airport, do it only for the amount you need when ready—enough for a taxi, a meal, or a day's expenses. Exchange the rest at a bank branch or ATM once you reach your destination. ATMs in most countries give you the real-time market rate (or very close to it) minus a small ATM fee, which is usually better than any airport exchange rate.

Comparing banks and exchange specialists

Not all banks offer the same rates or fees. Chase and Bank of America typically charge transaction fees ($5 to $15) on top of their spreads. Credit unions sometimes offer better rates than large banks, especially if you are a member. Online banks like Charles Schwab or Wise (formerly TransferWise) often have tighter spreads and lower fees than traditional banks, though Wise is primarily for transfers rather than physical currency.

If you need a large amount of currency or an uncommon one, a currency exchange specialist like Travelex or OFX may offer better rates than your bank. These companies focus on currency and often have access to more currencies and better wholesale rates. Call a few places and ask for a quote on the exact amount you need before you decide. The difference between a 2 percent markup and a 3 percent markup is real money on a $5,000 exchange.

What happens when you return unused foreign currency

If you return from your trip with leftover currency, most banks will buy it back from you at their current rate. This rate is usually worse than the rate at which they sold it to you—the spread works both ways. Some banks charge a fee to buy back currency; others do not. A few banks have policies against buying back currency at all, so ask before you exchange.

If you have a small amount left over, it may not be worth exchanging back. A $20 bill in euros might cost you $5 in fees and spread to convert back to dollars. In that case, hold onto it for your next trip, donate it, or use it as a souvenir. For larger amounts, the math usually works in your favor to exchange it back.

Frequently Asked Questions

Can I exchange currency at any bank branch, or only my home branch?

Most banks let you exchange currency at any of their branches, not just the one where you have an account. Call ahead to confirm the currency is in stock and to ask about fees. Some banks charge higher fees at branches outside your home region, so ask about this too.

What is the difference between the rate a bank shows online and the rate I actually get?

The rate shown online is usually the rate the bank is currently quoting, but it may change by the time you complete your order or pick up the currency. The actual rate you receive is the one locked in when you place the order (if you order online) or when you pick it up (if you order in advance). Always confirm the final rate before you hand over your money.

Is it cheaper to exchange money before I travel or after I arrive?

It depends on the country and the currency. In most cases, exchanging at your bank before you travel is cheaper than exchanging at an airport or tourist exchange booth in the destination country. However, using an ATM in the destination country often gives you a better rate than either option. Research the rates for your specific currency and destination before you decide.

Do I need to tell my bank I am exchanging currency?

You do not need to tell your bank in advance for small amounts. For large exchanges—typically $10,000 or more—banks are required to file a Currency Transaction Report with the federal government. This is routine and not a problem, but the bank may ask you questions about the purpose of the exchange. Be honest and straightforward in your answer.

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

Order it in advance through the bank's website or by phone. Most banks can order any major currency within 2 to 5 business days. If you need an uncommon currency, ask how long it will take and whether there is an ordering fee. If the bank cannot get it, try a currency exchange specialist or check whether you can withdraw cash from an ATM in the destination country instead.