To get the best exchange rate, compare rates from banks, online currency converters, and airport kiosks before converting money. Rates fluctuate daily, so check multiple sources.
Exchange rates determine how much one currency is worth in another. Banks and financial institutions set their own rates, adding a markup for profit. The interbank rate-the rate banks charge each other-is the baseline, but consumers rarely get this rate.
Exchange rates vary by provider. Here's how they compare:
| Provider Type | Typical Rate | Fees | Convenience |
|---|---|---|---|
| Banks | Near interbank rate | Low to moderate | High (if you have an account) |
| Online currency converters | Close to interbank rate | Low | Moderate (requires advance planning) |
| Airport kiosks | Higher markup | High | Very high (last-minute option) |
Banks often offer competitive rates, especially if you're already a customer. Online services like Wise (formerly TransferWise) and Revolut provide near-interbank rates with lower fees. Airport kiosks are convenient but usually have the worst rates due to high markups.
For example, if the interbank rate for EUR to USD is 1.08, a bank might offer 1.07, while an online service could offer 1.075, and an airport kiosk might only offer 1.05.
Many travelers assume airports offer the best rates because of their convenience. In reality, airport kiosks typically have the worst rates. Online services often provide better rates but require advance planning. Banks can be a good middle ground, offering decent rates with the convenience of in-person service.
Before traveling, compare rates from at least three different providers. Use websites like XE or OANDA to check current rates. If you're exchanging a large amount, even a small difference in rates can save you money.
When I traveled to Europe last year, I compared rates from my bank, an online service, and the airport. My bank offered the best rate, so I withdrew euros beforehand and avoided the airport kiosk's high fees.
To get the best exchange rate, compare rates from banks, online services, and airport kiosks. Avoid last-minute exchanges at airports, and consider using online services for better rates. Always check the latest rates before converting your money.