You can get more for your pound if you take the time to find the best exchange rates. Understanding how to exchange money can make a big difference when it comes to trying to save money. We compared dozens of ways to exchange money and found that the best methods typically avoid banks and in-person exchange kiosks.
How to find the best exchange rates
When transferring funds internationally or exchanging currency for a trip overseas, you will want to get the most value for money. So here’s our top tips on how to get the best exchange rates possible:
Do
Consider money transfer specialists. Providers like OFX, WorldRemit, Wise, Revolut and similar online money transfer services can offer bank-beating exchange rates and low fees.
Convert currencies when rates are favourable. If you know you need to make an international transfer or you will be traveling overseas, then try to exchange your cash when rates are favourable to you. Carry out your conversion at an exchange provider that charges low fees and has a competitive rate.
Set rate targets. If you have the luxury of time, you may opt to use a service like TorFX which lets you set rate targets that can trigger an exchange when the rate hits a target you set. You may alternatively be able to lock-in rates today for a transfer in the future.
Don’t
Exchange money at airports or train stations. Although such booths may be convenient, they never offer the best exchange rates. You will find they take advantage of people’s need to exchange their money and charge highly for the convenience.
Use a credit or debit card abroad (unless you know it’s fee-free). While some credit cards and debit cards offer fee-free spending overseas, if you don’t have one of these and still use your card abroad, expect to incur currency conversion fees of around 3%.
How to get the best exchange rate on international money transfers
If you plan to use an international money transfer service, then it’s best to shop around and compare your options. The more time you can leave yourself before needing to send the transfer the better. Here are a few things to think about when comparing money transfer exchange rates:
Know the mid-market rate for the currency. Money transfer providers skew exchange rates in their favour. Therefore it’s best to use the mid-market rate (which you see on Google) as a baseline and see who is offering the closest exchange rate.
Skip the bank. The bank is not your friend in this situation, as they almost never offer the best exchange rates.
Use transfer tools to save money. Consider using recurring payments, forward contracts and limit orders to get a stronger exchange rate.
Compare providers. Use our table to compare providers. It is also worth getting quotes from a few providers and seeing which offers the better deal.
Focus on the final sum your payee will receive. Some services touting “no fees” will bury their margin in a weaker exchange rate, while others might tout “real, interbank exchange rates” while adding a hefty fee on top (and some even do both). By focusing on the overall cost plus the sum your payee will actually get, it’s easier to identify the best deal.
Consider a multicurrency bank account. If you plan to send regular transactions using commonly traded currencies, then a multicurrency bank account like Revolut could make life easier and save money.
Try larger amounts. You’ll usually find that money transfer providers offer stronger exchange rates for larger transfers. If you’re planning to send say, £490, you might find that sending £510 puts your transfer into the next rate bracket and you end up with a better rate.
Please note: You should always refer to quotes you receive from transfer services themselves directly for exact amounts as they may vary from our estimates.
Where to exchange currency in the UK before your trip
If you know in advance that you will be travelling abroad, then there are several options for how to get the best exchange rates for your GBP:
Check your local bank. If you bank with one of the larger bank chains in the UK, they will almost certainly be able to sell you a wide range of foreign currency. Just beware of poor exchange rates. Even smaller banks can often order money from larger branches.
Use a currency ordering service. Services like Travelex allow you to order more than 50 currencies and have them delivered straight to your door. However, keep in mind you won’t get the mid-market rate.
Use an international transfer service, but have it delivered to your destination. Find a provider that can deliver your transfer for cash pickup at an agent location and have it waiting for you when you arrive at your destination.
How best to monitor exchange rates
One of the ways to save yourself money when making an international money transfer is to carry out your conversion when the exchange rate is most favourable. If you know in advance you will be sending money abroad or travelling overseas, then you can monitor currency trends ahead of time. Take a look at our live currency converter to see what exchange rate you would get for converting your cash today.
Market demand dictates how much one currency is worth compared to another – this is known as the mid-market rate. It is also the rate that banks use to trade money with one another.
When you convert money through a money transfer service, you will typically find that the provider adds a margin on top of the exchange rate to make money. So it is worth keeping this in mind when you are monitoring exchange rates.
Select the currency pair to fit your needs
Time is your best friend when it comes to getting the cheapest exchange rate. Whether you’re taking money out for a foreign trip, buying a property overseas, or making a money transfer abroad, you’ll want to keep an eye on the currency markets in advance of needing the cash. Being on top of what’s going on, and buying when the pound is strong against the currency you’re exchanging is key.”
Exchanging currency outside of the UK
When traveling internationally you’ll typically get the best exchange rates at banks, ATMs and post offices. If you have a bank card that doesn’t charge international ATM fees, this will most likely be the strongest and most convenient option.
It may be possible to exchange money at your hotel, but double-check the rate against the mid-market rate to see how strong it is. You may also find that some local shops and restaurants offer to accept payment in your native currency.
Here’s our dos and don’ts when it comes to exchanging currency outside of the UK:
Do exchange money at:
ATMs
Post offices
Banks
Your hotel
Do not exchange money at:
Tourist destinations
Street-side exchange bureaus
Airports, train stations, bus stations and the like
If you are buying currency in advance, then it is often best to use your bank, a currency ordering service or a money transfer service and opt for a cash pick up. Make sure to compare exchange rates in order to find the best deal. You can use the mid-market rate for your currency as a baseline and learn who’s offering the best exchange rate.
When exchanging large amounts of money, a small variance in the exchange rate can lead to hundreds of pounds lost or gained. Exchange rates are calculated based on what people are willing to buy and sell foreign currencies for. So it is a good idea to monitor foreign currency rates if you know you will need to convert your money soon.
If your bank gives you free international ATM withdrawals, this may be one of the cheapest options to get cash while traveling abroad. However, remember to check the rates and fees offered by your bank to make sure you are getting the most value for money. Don’t forget that the local ATM provider might charge a fee.
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To make sure you get accurate and helpful information, this guide has been reviewed by Rebecca Goodman, a member of Finder's Editorial Review Board.
Kate Steere is an editor at Finder, specialising in fintech, banking and cryptocurrency. She has previously written for The Motley Fool UK and Fitch Solutions, where she covered a wide range of personal finance topics and kept a close eye on market trends. Kate has a Bachelor of Arts in Modern History from the University of East Anglia. When not working, she can usually be found curled up with a good book or heading out for a run. See full bio
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Kate has written 128 Finder guides across topics including:
Zak Killermann was a technical publisher at Finder who specialized in currencies and investing. Zak’s expertise was in breaking down technical finance concepts into approachable, digestible nuggets of information. See full bio
Learn more about how to find the best exchange rate for GBP/EUR.
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