What banks exchange foreign currency?
Key takeaways
- Banks typically provide better exchange rates compared to airport kiosks or tourist areas.
- Understanding fees, spreads and rates helps you maximize your currency exchange value.
- Planning ahead typically saves three to five percent on conversion costs.
- Most banks require you to be an account holder to exchange currency.
Currency exchange is a crucial part of travel preparation, and for good reason. Having local currency when you arrive not only provides peace of mind but often saves money, particularly in destinations where cash remains the primary payment method.
Getting the best value requires understanding three key elements: the base exchange rate, service fees and the spread between buying and selling prices. Banks consistently offer better rates than airport kiosks or tourist-area exchange services, which often charge premiums of five to 10 percent for convenience. This difference becomes significant, especially when exchanging larger amounts.
While international currency markets fluctuate constantly, strategic planning helps ensure you avoid unnecessary premiums for basic exchange services.
How bank currency exchange works
Bank currency exchange involves more than a simple swap of one currency for another. Most banks that offer currency exchange deal with major global currencies and base their rates on current international markets.
When you exchange currency at a bank, three key components affect your final amount:
- Exchange rate: The basic conversion rate between currencies that changes daily based on global markets.
- Service fees: The flat or percentage-based charges for handling the exchange.
- Spread: The difference between the bank’s buying and selling prices — essentially its profit margin.
Banks typically update their exchange rates daily, following international foreign exchange (forex) markets while adding a modest margin. This margin usually remains lower than those at airport kiosks or tourist-area exchange services, where convenience premiums can significantly reduce your exchange value.
What to expect when exchanging currency
Most banks require you to have an account for currency exchange services. The process usually involves:
- Ordering currency one to three business days in advance
- Providing valid ID and account information
- Meeting minimum exchange amounts (often $100 or more)
- Paying applicable service fees
- Picking up currency at a local branch
Some larger banks offer online ordering with home delivery options, though these typically include shipping fees and may have limits on order sizes.
Best banks for currency exchange
Finding the right bank for currency exchange can significantly impact your costs and convenience. Not all banks offer these services, and those that do maintain varying rates, fees and policies that affect your exchange value.
Bank of America
- Online ordering up to $10,000
- No exchange fees, but $7.50 shipping for home delivery
- Orders of $1,000 or more require branch pickup
- Must be an account holder
- Multiple currency options available
Chase Bank
- Branch-based exchange services only
- Must call local branch for fee information
- Available to Chase customers only
- Call ahead to confirm currency availability
Citibank
- More than 50 types of currency available
- No fee for Citigold or Citi Priority customers
- $5 service fee for transactions under $1,000
- Shipping fees of $10 to $20 for home delivery
- Branch or phone orders are accepted
Credit union options
Credit unions have become increasingly competitive in the currency exchange market. For example, Service Credit Union handles more than 60 currencies with a $15 fee for orders under $500. Wings Financial Credit Union offers over 90 currencies and waives its $10 fee on exchanges over $300.
Understanding bank exchange policies
Most banks limit currency exchange services to account holders. Advance notice is typically required, especially for less common currencies or larger amounts. Always contact your branch to verify availability and current rates, as these fluctuate daily based on market conditions.
Remember that timing matters: many banks need one to three business days to process currency orders, and some require additional time during peak travel seasons. Comparing rates between several institutions on the same day proves worthwhile, as exchange rates can vary significantly.
Strategic tips for currency exchange
The timing of your currency exchange often matters as much as where you do it. Exchange rates change throughout the day as global markets open and close, and banks typically update their rates each morning. While perfect market timing isn’t possible, you can avoid common pitfalls that reduce your exchange value.
Planning your exchange
Experienced travelers typically recommend exchanging enough currency to cover your first few days abroad, including transportation from the airport, initial meals and immediate necessities. A practical approach: calculate your expected daily cash needs and exchange enough for three to four days, plus a small buffer for unexpected expenses.
During peak travel seasons — summer months and major holidays — consider ordering a week in advance. This buffer proves especially valuable when traveling to countries where cash dominates daily transactions.
Avoiding common exchange mistakes
Airport currency exchange services market themselves on convenience, but that convenience comes at a price — often up to 10 percent worse than bank rates. Even if you’re stuck using an airport exchanger, consider converting only what you need for immediate expenses. This same principle applies to tourist-area exchange offices, which typically charge similar premiums.
Credit cards often provide better effective exchange rates than cash exchanges, especially cards designed for international travel. However, don’t rely solely on cards — some regions still operate primarily in cash, and small vendors may not accept credit cards. Having a mix of payment options gives you flexibility while minimizing exchange costs.
Making the most of bank services
If your bank reimburses ATM fees, consider a combined approach: exchange some currency before departure, then withdraw additional cash from local ATMs as needed. This strategy often provides favorable exchange rates while ensuring consistent access to local currency. Remember to notify your bank of your travel dates to prevent card security blocks.
Alternative ways to get foreign currency
Think of currency exchange as diversifying investments — relying on a single method rarely provides the best overall value. While bank services form the foundation of most currency exchange strategies, understanding your alternatives helps you make smarter decisions about when and where to exchange money.
Online currency services
Digital currency platforms have transformed international money exchange. Services like Wise often beat traditional bank rates by two to three percent and offer more transparency about their fee structure.
However, these services work best when you’re not in a hurry — delivery typically takes three to five business days, and you’ll need to verify your identity before making your first exchange.
ATM strategies abroad
Many travelers skip pre-trip currency exchange entirely, opting instead to withdraw cash from foreign ATMs. This approach often yields exchange rates close to market value, but watch for compounding fees.
Your home bank might charge international ATM fees while the local bank adds its own charges. Some U.S. banks partner with international banks to reduce these fees — Charles Schwab’s debit card, for instance, reimburses all ATM fees worldwide.
When to use credit cards
Credit cards often secure better exchange rates than cash exchanges because card networks like Visa and Mastercard convert currencies at near-market rates. But there’s a catch — many cards tack on foreign transaction fees of two to three percent. Travel rewards cards typically waive these fees, making them particularly valuable for international purchases.
Remember, no single method works best in every situation. Smart travelers usually combine approaches — some cash exchanged through their bank before departure, a credit card with no foreign transaction fees for larger purchases, and perhaps an ATM card that reimburses fees for additional cash withdrawals abroad.
The bottom line
Currency exchange doesn’t need to be the most challenging part of your travel planning. While you can’t control exchange rates or international markets, you can control how and where you exchange your money. Working with your bank — ideally well before your departure date — often provides the best combination of fair rates and peace of mind.
Remember that convenience comes at a cost. Those airport exchange kiosks might seem tempting after a long flight, but their premium rates can take a serious bite out of your travel budget. A little advance planning with your bank typically saves you up to 10 percent on exchange rates — money better spent enjoying your destination than paying for last-minute currency conversions.
