How Currency Conversion Works
An exchange rate tells you how much of one currency you get for one unit of another. Understanding what the rate does and does not include helps you avoid surprises.
Reading an exchange rate
A rate such as 1 USD = 1,300 KRW means one US dollar buys 1,300 Korean won. To convert an amount, multiply by the rate: 50 USD × 1,300 = 65,000 KRW. To go the other way, divide: 65,000 ÷ 1,300 = 50.
The mid-market rate
The rate you see on comparison sites and in converters is usually a mid-market rate, the midpoint between the price at which banks buy and sell a currency. It is a useful benchmark, but it is not usually the rate you get when you actually exchange money.
Spread and fees
Banks, card networks, airports and transfer services make money in two ways: by offering a rate slightly worse than mid-market (the spread) and by charging fees. The final amount you receive is lower than a simple conversion suggests.
| Where you exchange | What to watch |
|---|---|
| Bank or ATM | Spread plus possible withdrawal or foreign transaction fees |
| Credit or debit card abroad | Network rate plus foreign transaction fee; choose to pay in local currency |
| Airport kiosk | Often the widest spread |
| Online transfer service | Fee structure and the rate used; compare before sending |
Using the converter
- Open a currency window with the + Currency button.
- Pick the currency you have in the top list and the one you want in the lower list.
- Type the amount using the keypad or your keyboard. The result updates as you type.
- Use the swap button to reverse the direction.
Open several currency windows to compare one price in different currencies, or keep a calculator window next to a converter to add up costs and convert the total.
Rounding
Currencies such as the Korean won and the Japanese yen are normally quoted in whole units, so the converter shows them without decimals. Most other currencies show two decimal places.