Currency Converter Guide
How exchange rates work, how to convert currencies and why real payment amounts can differ.
Currency conversion looks simple because the basic calculation is multiplication or division. The difficult part is choosing the right exchange rate and understanding the difference between a reference rate and the rate actually used by a bank, card network or money-transfer provider.
How a currency conversion works
If one unit of the base currency equals a certain amount of the target currency, multiply the amount by that rate. For example, if 1 USD were quoted at 0.90 EUR, then 100 USD would correspond to 90 EUR at that reference rate.
Exchange rates change over time. That means the result from a calculator is best treated as a reference estimate unless the rate is guaranteed by the provider completing the transaction.
Why your bank may show a different amount
Providers can add a spread, a fixed fee, a percentage fee or a combination of charges. A card purchase may also use the card network's rate rather than the rate shown on a public reference service. The final debit therefore does not always equal a simple calculator result.
Base currency and target currency
The base currency is the currency you start with. The target currency is the currency you want to see. Reversing the direction requires the reciprocal rate, so the two displayed rates are related but not identical numbers.
Good practice when comparing providers
- Compare the final amount received, not only the headline exchange rate.
- Check whether a fee is charged separately.
- Check the time at which the provider locks the rate.
- For large transfers, confirm the provider's current rate before sending money.
Use the calculator
Try the Currency Converter with the currencies and amount you need. The page explains that reference rates can differ from the rate applied by a financial provider.