Under $398 the no-fee transfer costs less. Above it, the one with a fee does
· 4 min read
Two quotes for the same transfer are hard to compare, because each one charges in two places: a fee you can see and an exchange rate you have to work out. In the example below, the quote with no fee costs less on anything under $398, and the quote with a fee costs less on anything over it. On $5,000 the difference is $92.04.
Both quotes are examples, not any provider's prices. Fees and rates differ by provider, by currency, by amount and by day, and change without notice. This is arithmetic, not financial advice.
The problem: two numbers per quote, and only one is a price
A transfer quote shows a fee in dollars and an exchange rate like 0.8924. The fee is easy to compare. The rate is not, because nothing tells you what it should have been. The gap between the rate you are offered and the mid-market rate, the one a search engine shows, is a cost too. It is just not printed as one. Why the rate is worse covers where that gap comes from.
Two example quotes
- Quote A: no fee, and a rate 2.5% below mid-market.
- Quote B: a $8.00 fee, and a rate 0.5% below mid-market.
The fee comes off first and the rest is converted, so each quote costs its fee plus its margin on what is left. In dollars:
| Sending | Quote A costs | Quote B costs |
|---|---|---|
| $200 | $5.00 | $8.96 |
| $1,000 | $25.00 | $12.96 |
| $5,000 | $125.00 | $32.96 |
Why the answer flips at $398
A fee is a fixed amount. A margin is a share of the transfer. So the fee matters most on small transfers and the margin on large ones. Quote B's $8.00 fee is paid back by its smaller margin once the transfer is big enough: at these two margins, that happens at $398. Below it the $8.00 is the larger cost; above it the extra 2 points of margin are.
Change either margin or the fee and the point moves. That is why no rule of thumb about fees holds: the only safe comparison is the one worked out for your amount, on the day.
How to compare two real quotes
- Ask each provider for the same amount, in the same currency, on the same day. Rates move during the day.
- Write down what arrives, in the receiving currency, after every fee. That single number includes both costs.
- Compare what arrives, not the fee. The quote that delivers more costs less, whatever its fee says.
- Ask about the other end. A receiving bank can charge its own fee, which neither quote shows.
The international transfer cost calculator does step two for you: put in the amount, the fee and the rate a quote offers, and it shows the fee, what the rate costs, and what arrives, against a dated reference rate. Run it once per quote. It is free, there is no account, and nothing you type leaves your browser. What sending $1,000 abroad costs works one transfer through line by line.
What this does not tell you
- What any provider charges. Both quotes here are examples.
- Fees charged by the receiving bank, or for paying by card.
- How fast the money arrives, the limits on each transfer, or whether a provider is licensed where you live.
- Which provider to use. That depends on the quotes you are given on the day.
