Sending money abroad: how to see what it really costs

When you send money abroad or change cash, you usually pay twice: a fee you can see, and a markup hidden in the exchange rate. The markup is often the bigger of the two, and it's the one most people never check.

The mid-market rate is the midpoint between what banks buy and sell a currency for on the global market. It's the fairest measure of what your money is worth in another currency, and it's the yardstick every quote should be compared against. Our free currency converter shows it, updated every hour.

Banks, exchange booths and many transfer services give you a worse rate than mid-market and keep the difference. It isn't listed as a fee, so it's easy to miss. A "no fee" offer can still be expensive: the cost is in the rate.

An example, with made-up round numbers. Say the mid-market rate is 1 USD = 85.00 INR, and your bank offers 82.50 to send $1,000 for a $5 fee. At mid-market, $1,000 is ₹85,000; the bank delivers ₹82,500. The ₹2,500 gap is worth about $29, and with the $5 fee the transfer costs you about $34 in all: 3.4% of the $1,005 you pay.

1. Get their offer: the rate they quote, or the amount the other side will receive, and any fee.
2. Look up the mid-market rate at the same moment. Rates move, so compare like with like.
3. Work out what you'd receive at mid-market, subtract what they deliver, and add the fee. That's what the quote really costs you, in money and as a share of what you pay.

Or let us do the math: Check a quote on our free converter takes their rate or amount and fee and shows what it costs you against the mid-market rate. It also catches a rate typed the wrong way round, as exchange boards often show it.

A bank wire can pass through one or more banks between yours and the recipient's, and each can take a fee out of the amount on the way, so less can arrive than the sending bank showed you. The recipient's own bank may charge to receive an international payment too. When you compare, ask each provider whether the amount it quotes is what arrives in the account, after every fee, or only what leaves yours.

Timing matters as well. Some services fix the rate when you confirm; others convert when the money is processed, which can be a day or two later, at that day's rate. If the quote says the rate is "indicative" or "estimated", the amount that arrives can move in either direction.

• Have the recipient's full name exactly as their bank holds it, and their account details in the format that country uses (for example, an IBAN in Europe, or an account number and branch code elsewhere). A wrong detail can send the money back, sometimes at a different rate and minus fees.
• Expect to show ID the first time, and for large amounts to be asked where the money comes from: providers must check this by law, and it isn't a sign that anything is wrong.
• Send a small amount first to a new recipient if you're unsure of the details, and keep the confirmation with its reference number until the money has arrived.

• Compare the total that arrives, not the fee alone.
• Check the quote when you're about to send, not the day before.
• When a card machine or ATM abroad offers to charge you in your home currency, choose the local currency: the conversion it offers usually comes with its own markup.
• Ask for the rate and fee before you hand over cash at an exchange booth.

Wise converts at the mid-market rate and shows its fee up front.

Referral link: if you open a Wise account through it and send money, Wise pays Utilava a fee. Your price is the same either way.