It’s not the rates you receive when exchanging cash over the counter in the bank (although rates for both situations are usually very high). This is probably what would happen if you sold a house in one country and bought another house in another country. The table above represents the rates you receive if you were to wire money into your bank account, for example in another currency. Here are some fees from wire transfer exchange with popular banks in the US, Australia, the UK and Canada Country You don’t see the fee because you just see how much foreign currency you received when exchanging. The reason why they charge so much is because this is a hidden fee. Usually they do not disclose the fee, they just disclose the rate that you get to exchange. The banks make a margin on top of this, and give you their exchange rate with the fee included. This is the rate the banks pay when they are trading with each other (usually a few million dollars per trade). The rate the banks pay when exchanging money is called the “inter-bank” rate. Check how much they charge above the “inter-bank” rate This means that on your $200,000 house you just paid $7,000 to the bank to transfer the money for you. The average fees are around 7% round-trip or 3.5% one way. Of course you’re not going do a round trip exchange, but it gives you the idea of how much the banks are making. That’s on a round-trip exchange, meaning if you changed the money then changed it back you would lose 13%. You might be shocked to discover that the fees are as high as 13%. How much do you pay the bank when you wire the money? $200,000 house, transferring from London to New York, or from Sydney to San Francisco.
So let’s say you are moving countries and you sold your house in one country and bought in another. Banks charge as much as 13% fees on a round trip exchange
You don’t see currency exchange fees easily. The fees they charge you when you exchange money are hidden. Every time you do, the banks try and take from you as much as they can get away with. If you’re like me who travel often, or perhaps you have lived in different areas around the world, you constantly change money.
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