Effective Exchange Rate Calculator
The total amount you are parting with.
1 Unit of Source Currency = X Target Currency.
Wire fees, bank charges, or platform fees.
Fees charged to the recipient by their bank.
Effective Exchange Rate
0.0000
Total Amount Sent:
0.00
Net Amount Converted:
0.00
Total Amount Received (Target):
0.00
Exchange Markup / Loss (%):
0.00%
What is the Effective Exchange Rate?
The Effective Exchange Rate is the actual rate you receive when converting one currency to another after accounting for all fees, commissions, and hidden charges. While banks and transfer services often advertise a "Quoted Rate" or "Mid-Market Rate," this is rarely the rate that ends up in your pocket.
This metric is crucial for businesses and individuals engaged in international remittances to understand the true cost of moving money.
How This Calculator Works
Our calculator determines your effective rate using the following logic:
- Deduction of Upfront Fees: Banks often charge a wire fee (e.g., $25) before conversion or add it on top. This calculator subtracts source fees from the sent amount to find what is actually converted.
- Application of Quoted Rate: The remaining funds are converted at the rate provided by your provider.
- Deduction of Receiving Fees: Intermediary banks or the receiving bank may charge a landing fee in the destination currency.
- Final Calculation: The final amount received is divided by the total amount sent to give you the "Real" exchange rate.
Example Calculation
Imagine you want to send 1,000 USD to Europe.
- Quoted Rate: 0.85 EUR (1 USD = 0.85 EUR).
- Upfront Fee: 20 USD.
- Receiving Fee: 10 EUR.
First, the upfront fee is removed: $1,000 – $20 = $980 is converted.
$980 * 0.85 = 833 EUR.
Then the receiving fee is deducted: 833 EUR – 10 EUR = 823 EUR total received.
Effective Rate: 823 EUR / 1000 USD = 0.823.
Even though the quoted rate was 0.85, your effective rate was 0.823. This represents a hidden cost of approximately 3.1%.