How Currency Exchange Rates Work (and How to Convert)
You check the exchange rate, then your bank gives you a worse one — what's going on? Understanding how currency conversion works saves you money on travel, shopping and freelancing.
The mid-market rate vs. what you pay
The rate you see on Google is the mid-market rate — the midpoint between buy and sell prices. Banks and exchanges add a margin (the "spread") plus sometimes a fee, so the rate you actually get is worse. The gap is how they make money.
How to convert
To convert, multiply by the rate: 100 USD at 0.92 EUR/USD = 92 EUR. To go back, divide. Just remember the live rate moves constantly, so a quote is only good for that moment.
Get the real rate
Our free currency converter uses live mid-market rates so you know the true value before you exchange — then you can judge whether a provider's offer is fair. For the maths behind the margins, see our markup vs margin guide.
Bottom line
The mid-market rate is the real value; what you're offered includes a hidden margin. Check the live rate first, compare it to your provider's quote, and you'll spot a bad deal instantly — and often save more by choosing a low-margin service.
