Why the highest exchange rate may not be the cheapest transfer

The headline-rate trap

A rate is only one input. If a fee is deducted before conversion, fewer pounds, euros or dollars receive that rate. If the fee is added on top, the transfer may deliver more but also cost you more.

Advertisements often highlight the strongest-looking number. The confirmation screen shows the complete outcome.

Put every quote on the same basis

Choose whether you are fixing the amount you send or the amount the recipient needs. Then keep the route, payment method and payout method unchanged.

• Do not compare £500 plus a fee with £500 including a fee.
• Do not compare card payment with bank payment without noting the cost difference.
• Do not compare cash pickup with bank deposit as if they are identical services.

A promotional rate can be real but temporary

A welcome rate may produce the best first transfer. It does not describe what the same provider will offer next time. Check the eligible amount, country, code and expiry, then compare the standard rate for repeat transfers.

Calculate the amount arriving

When a fee is deducted, subtract it from the send amount and multiply the remainder by the exchange rate. When the fee is added, multiply the full send amount, then compare the higher total payment fairly.

Provider calculators sometimes include destination taxes or payout costs. Use the displayed recipient amount when available rather than rebuilding a complicated quote yourself.

What 'cheapest' should mean

For a fixed send amount, the cheapest practical option is usually the one that delivers the most through a suitable payout method. If speed is essential, the best-value option may be a slightly more expensive service that arrives on time.