Are There Banks That Exchange Foreign Currency for Free? No! Find Alternatives Now

Byron Mühlberg, writer at

Byron Mühlberg


Nov 7, 2022
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Picking up a wad of foreign banknotes before a trip abroad is often an exciting first step in any overseas holiday. And although many people exchange money at airports and at bureaux de change in foreign cities (both of which tend to come along with poor exchange rates), others prefer to collect money from their bank, which is seldom any cheaper. As a result, dodging the (sometimes surprisingly exorbitant) cost of accessing foreign banknotes by finding the best way to exchange currency remains as essential as ever. And as we'll see, banks are a lousy way to exchange foreign currency, as they charge hefty fees and exchange rates.

In this guide, we explain why the conventional ways to exchange foreign currency (e.g. through a bank, credit union, or bureau de change) are also the priciest. Then, we give you tips on withdrawing money from ATMs overseas, which is a good alternative. Finally, we end with why Revolut and Wise are your best options as multi-currency cards designed for any world traveler, digital nomad, or expat.

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In almost all cases, the best way to exchange currency abroad is to withdraw it from foreign ATMs directly using a travel card. For this purpose, we recommend opening a Revolut, which gives you a debit card to spend like a local in over 24 currencies. Revolut waives all currency exchange fees on the first $1,000 and charges no foreign ATM withdrawal fees on the first #200 per month, making it Monito's recommendation for global travel.

Option 1: Bank or Credit Union

Robert Bye on Unsplash

Despite commonly given advice, banks, currency exchange desks, and credit unions are rarely the best places to exchange currency, nor are they the cheapest. You can exchange money this way before travelling or during your trip at a credit union, bank, or bureau de change, commonly found in airports and near tourist hotspots in foreign cities.

Three Reasons to Avoid

Here are the main reasons why you should avoid banks, credit unions, and bureaux de change for exchanging foreign currency:

1. High Fees

This popular (but expensive) way to convert money will get you a physical stack of foreign currency banknotes. It is far from the cheapest way to exchange foreign currency because of the following three fees:

  1. Transaction fee: Banks, credit unions, and similar brick-and-mortar currency exchange locations often charge a fixed fee or variable commission on every currency conversion you make.
  2. Delivery fee: If you'd like to have the foreign cash delivered directly to your home before you travel, this will come with an additional delivery surcharge.

2. Poor Exchange Rates

In all cases, banks and credit unions will convert your money at an exchange rate weaker than the actual market rate. Banks, credit unions, and other money exchangers will pocket the difference (an exchange rate margin). This tends to form the highest cost of exchanging currency.

We once found that America First Credit Union, a standard credit union in the United States, was converting $1 into 0.85019 Euros even though the mid-market exchange rate was at $1 = 0.90201 Euros*. That's a sizable 5.74% fee!

According to Monito's independent research, the total cost of ordering foreign banknotes combined tends to range from 2.15% to a whopping 16.60% of the total amount converted, depending on where you exchange cash and how much you exchange in the first place.

3. Not Always Very Accessible

Although ubiquitous at airports and popular tourist locations while travelling, if you're not in one of these places, accessing physical foreign banknotes can be difficult.

For this reason, we recommend using a travel card or withdrawing foreign banknotes from an ATM in your destination country. This way, you won't need to rely on finding a physical location and can simply spend foreign currency on the go.

Cheapest Banks for Currency Exchange

While currency exchange still tends to be rather pricey when done through the bank, Bank of America is the best US bank that exchanges foreign currency if you must go this route. That's because Bank of America gives you better exchange rates than other US banks, no fixed fees, and speedy delivery (if you order your cash before 2:00 PM, the foreign currency will ship to your residence on the same business day.)

However, while Bank of America won't charge you any fixed fees for ordering foreign currency, it's worth reiterating that you'll still be paying a relatively high exchange rate margin of between 5% and 7% of the transfer value to buy foreign currency with your US dollars. This means the service is far from free despite what the bank might advertise.

In addition, Bank of America charges a delivery fee of $7.50 on all foreign currency orders under $1,000 if you choose to have them sent to your address. This fee is waived for orders of $1,000 or more, which must be collected in-branch.

Should I Exchange Money Before I Travel?

As we'll see in the next section, it's generally best to wait until you are in-country to withdraw cash from a local ATM.

Banks and credit unions back home are one of the most expensive ways to exchange money before travelling and sending money overseas. We recommend against these methods if you can withdraw directly from an overseas ATM, which will likely be cheaper, or get a dedicated travel money card, which will likely be cheaper still.

* We recorded exchange rates on 3 March 2022 at 11:27 CEST.

Option 2: Foreign ATMs

Eduardo Soares on Unsplash Withdraw from ATM

Withdrawing cash from a foreign ATM can either be a pricey endeavour or the best way to exchange currency, depending on exactly how you get the job done. If you have a card that charges no international card transaction fees and avoid paying a dynamic currency conversion, you will save a handful of fees.

To get a complete picture of what you're up against, let's look at the costs of withdrawing money outside your home country.

How to Avoid Foreign ATM Withdrawal Fees

According to Condé Nast, withdrawal fees typically range from $2 to $5 per withdrawal and other fees for foreign currency services. Taken together, paying at foreign ATMs typically includes any combination of the following types of fees:

1. Foreign Transaction Fee

Most ATM networks (such as Euronet) charge foreign transaction fees for withdrawals from their ATMs. These fees range between $2 and $5 per withdrawal but can sometimes be higher or include a commission charge of up to 3% of the transfer amount in addition to the fixed amount.

2. Dynamic Currency Conversion

Dynamic currency conversions are sneaky fees for converting a foreign payment into an ATM's local currency. At the extreme, these fees can be higher than 10% of the transaction value.

  • Avoid this by paying the transaction in the local currency (more on this later).

3. Exchange Rate Margin

In all cases, you'll be charged an exchange rate margin that forms the difference between the bid price of the foreign currency from your card issuer and the asking price you'll be paying. This sometimes creates the highest cost of getting cash abroad.

  • Avoid this by using a multi-currency card, such as Revolut or Wise.

4. Bank Charges

Your home bank might make these miscellaneous fees. If the foreign ATM network you use is outside of your own bank's network or a partner network (which is often the case), you will likely be charged a fee by your bank.

  • Avoid this by talking to your bank to see if they offer packages that waive out-of-network ATM withdrawal fees.

Avoid Dynamic Currency Conversions

When you present your home debit or credit card to foreign merchants, you will be given a choice to either pay in the local currency or your home currency. You should always pay in the local currency (EUR in Spain, USD in the United States, JPY in Japan, etc.).

Merchants or ATMs often charge dynamic currency conversions (or DCCs) on card payments to convert foreign currency into local currency. These fees can go as high as 10% per withdrawal. Find out more.

Option 3: Overseas Bank Account

ben o'bro on Unsplash United States skyline

Opening a bank account overseas may seem difficult or exclusive. Still, it can be an excellent way to exchange foreign currencies while abroad when you travel to a specific country or region frequently. You generally have two options when opening a bank account overseas:

  • Opening an account with a high-street bank in another country;
  • Opening an account with an international digital bank.

Store Money in a Bank

Opening a bank account with a traditional high-street bank in another country will likely require you to be present in that country. We further detail how to open a bank account as a foreigner in our many guides on the UK, Japan, the US, Germany, and much more.

Since these banks will require you to present a fair amount of documentation, including passports, visas, and (sometimes) proof of residency, we recommend the second option for travel purposes.

Digital Bank Accounts as Alternatives

If you don't desire to become a resident of the country you're travelling to, you may consider an international digital bank — and withdraw money from ATMs with your travel card. (If you are planning to become a resident of a foreign country, look at our in-depth guide on opening a foreign bank account online.)

International digital bank accounts complement traditional bank accounts well. While you may access savings accounts, investments, and lines of credit with your primary bank, you can use a digital bank for much more favourable foreign exchange rates and cross-border fees. 

These international digital banks, also known as neobanks, offer services exclusively online with a digital app. Neobanks like Chime® in the US, N26 in the EU, Tangerine in Canada, and Monzo in the UK provide legitimate banking products with full deposit insurance. This distinction sets neobanks apart from e-money or fintech institutions such as Wise or Revolut.

Option 4: Multi-Currency Travel Cards

Multi-currency accounts remain the best way to buy foreign currency abroad because they run entirely online. You can link your home bank to the multi-currency account and quickly make local bank transfers (you can usually transfer money on the same day unless you request your transfer on the weekend). Then, the foreign currency exchange in the app will happen instantly.


When you buy foreign currency with Revolut's multi-currency tool, you'll never face any fixed fees for your first £1,000 per month. Their exchange rates usually hover at 0.24%, worse than the actual mid-market exchange rate, which is very competitive. For these reasons and thanks to the app's ease of use, we recommend Revolut without hesitation. Read our Revolut Review.

Wise Account

The Wise Account is incredible because it will always exchange currency at the actual mid-market exchange rate, no matter how much currency you exchange per month. Its fixed fee is a percentage of the total transaction amount. This fee is very low and ranges from 0.35% to 2.85% — depending on how uncommon the currencies are. For example, if you are buying Euros with USD, then the Wise fee will be only 0.35%. Read our Wise Account Review

Recap: Best Ways To Exchange Currency

Fabio Fistarol on Unsplash

Finding the cheapest way to get cash abroad doesn't require withdrawing money at foreign ATMs using a specialist travel card. While this method will make your cash withdrawals as optimized and low-cost as possible, there are several general rules of thumb to keep costs down more generally.

Rules of Thumb For Foreign Currency Exchange

Here they are:

  • Check your bank's ATM network: Visit your bank's website or mobile app to see whether or not it operates an ATM network or has a partner ATM network in the country you're travelling to. If it does, withdraw cash only from those ATMs, as you'll likely be charged lower withdrawal fees.
  • Make fewer but larger cash withdrawals: Because of the costs associated with ATM withdrawals, it usually makes sense to withdraw more significant sums of money rather than multiple smaller withdrawals.

What To Avoid Before Exchanging Currency

On the other hand, here are the four main things to avoid when trying to find the cheapest way to get cash abroad:

  1. Don't use bureaux de change: Currency conversion offices and bureaux de change at airports and in foreign cities typically charge a high exchange rate margin between 2.15% and 16.60% of the value exchanged.
  2. Don't withdraw from ATMs in your home currency: When withdrawing cash, always pay in the local currency and not in your home currency; otherwise, you'll likely pay a hidden dynamic currency conversion fee of up to 10% or more of the transaction value.
  3. Don't withdraw from ATMs using your credit card: International credit card withdrawals can sometimes come with additional fees of up to around 5% due to cash advances, meaning your withdrawal can be subject to snowballing interest rates. These costs are more typically associated with US credit cards.
  4. Don't top up a travel card with a credit card: While quick, using a credit card to top up a travel card is generally the most expensive way to load money into a travel card. In general, we recommend using a bank transfer to get the job done instead.

FAQ About the Exchanging Foreign Currency

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