Interbank rates (+/- 0%), with a margin close to zero, are the "official" rates quoted in media such as ‘The Wall Street Journal’. They typically reflect the market rates for large transactions of USD1 million or more when banks trade between themselves or with very large clients.
For the smaller amounts exchanged in a retail setting, banks, credit cards and exchange agencies charge commissions to convert currencies. These retail rates add commissions of 1 to 10 percent or more. For example:
- ATMs typically add 2% (and then add service charges in many parts of the world)
- Credit cards typically add 3% (for the major currencies; more for other currencies)
- Foreign exchange kiosks and banks often add 5% when you convert hard cash (for the major currencies; more for other currencies).
Retail rates vary widely between payment systems, countries and banks, so we encourage you to enquire about the rates your financial institution is actually charging you.
To add a commission to your conversion, you can use the Interbank +/- pull-down on any of our applications. Either choose the commission from our list of typical charges, or type in a value if you know the rate you will be paying:
When you convert currency, you sell one currency to buy another. Your financial institution charges you a different rate if you are selling a currency (the Bid or Sell rate) or buying a currency (the Ask or Buy rate).
You can see these two types of rates in the details section of the Currency Converter.
The Bid (or Sell) rate is the lower amount. You will receive fewer euros when selling your dollars (this is the number you see in the right field of the converter).
The Ask (or Buy) rate is the higher amount. It will cost you more dollars when buying euros.
Many currency information sites provide the midpoint rate, which is the average of the Bid and Ask rates for a currency pair. At OANDA, we default to the Bid price for our applications, as it more accurately mimics the rate that you would be charged if you were exchanging money. We do provide midpoint rates as a point of reference in our Historical Exchange Rates tool.