Bank of America Forex Rates Explained | How to Save on Transfers

You'd like your foreign exchange to be worth as much as possible, but the end sum usually doesn't cut it. Bank of America (BoA/BofA) will transfer your money internationally, but its fees and exchange rates cut into what you send or receive. 

In this blog, we'll discuss BoA forex rates, detail the expenses involved, and provide tips to get the most from your money.

Bank of America provides the following to handle foreign currency:

Foreign currency exchange in-branch

• Major currencies such as EUR, GBP, JPY, CAD, and AUD are available for purchase through Bank of America locations.

• The margin is quoted on a discretionary all-in basis, wherein the bank uses its own margin over the mid-market exchange rate benchmark.

• It's convenient if you want cash in advance of a trip, but the Bank of America forex rates are usually less favorable than what fintech apps may provide.

International wire transfers FX rates

• Many people use Bank of America's forex rates for remitting or receiving cash overseas.

• The bank charges a markup on the interbank rate (the rate banks charge to trade currencies with one another).

• Rates are updated once per business day, so you won't benefit from intraday market fluctuations.

• Though secure and reliable, the transfers are less competitive and less transparent.

Card transactions abroad (credit/debit use overseas)

• A Bank of America debit or credit card used outside the country automatically converts your purchase to USD.

• The bank manages the currency exchange, so you won't need cash.

• Some vendors will present the option to charge in USD rather than the local currency (Dynamic Currency Conversion), and this is optional.

• Transactions go through the card network, so they are easy, secure, and traceable.

Foreign ATM withdrawals

• You can use Bank of America debit cards at ATMs worldwide to get local currency.

• You can withdraw cash in the local currency, and the transaction would be carried out by the global card network.

• You can prepare ahead of time by finding suitable ATMs using Bank of America's online resources or mobile app.

Before you exchange currency or send money abroad, here's a quick look at the main cross-border costs to help you understand what to expect.

Let’s break down these exchange rates for USD 1000 individually:

When you see the BoA exchange rate, it's nearly always not the same as the mid-market rate, the actual rate banks charge when trading currencies with one another. There are several reasons for this:

1. Bank mark-up

Bank of America charges a margin lower than the mid-market rate to absorb operating expenses and generate profit. That is why the Bank of America exchange rate you receive is lower than the true market rate.

2.Convenience factor

BofA offers safe, sure, and convenient services for cash exchange and wire transfers. Much of the variation in rates accounts for the convenience of accessing funds readily, without needing to monitor live market movements or go through several providers.

3.Risk management

Currency markets are subject to volatility. Banks quote their rates to shield themselves from unexpected changes between the moment you place a transaction and when it is processed.

4.Daily rate updates

Bank of America's forex rates change once a business day. This allows the bank to handle exposure to market fluctuations, but it also means you will not receive the precise market rate at the time of your transaction.

To see how Bank of America’s rates and fees influence a transaction, let's look at sending and receiving money abroad.

Case 1 - Sending USD 10,000 to Europe

• Objective: Transfer USD 10, 000 to Europe.

• Mid-market expectation (1 USD = 0.86 EUR): EUR 8, 600.

• Bank of America rate (1 USD = 0.78 EUR): EUR 7,800 before fees.

• Wire fee: USD 45 (EUR 39).

• Amount received at the end: EUR 7, 800 - EUR 39 = EUR 7,761.

• Hidden cost: EUR 839 lost due to rate markup + wire fee.

Case 2 - Receiving EUR 10,000 from Europe

• Objective: Receive EUR 10,000 in USD.

• Mid-market expectation (1 EUR = 1.17 USD): USD 11, 700.

• Bank of America rate (1 EUR = 1.08 USD): USD 10, 800 after markup.

• Incoming wire fee: USD 15.

• Amount received at the end: USD 10, 800 - USD 15 = USD 10, 785.

• Hidden cost: USD 915 lost compared to the mid-market rate.

When transferring or receiving money internationally, timing is everything. BoA’s foreign exchange rates are refreshed once daily, so your transaction might not utilize the latest market rate. Here's why that is important:

1.Rates change fast

Exchange rates are very volatile due to international events, politics, and economic variations. Bank of America's exchange rate may lag behind these fluctuations, so the amount you send or receive could be slightly less than a real-time rate.

2.Plan transfers better

Real-time rates let you act the moment the market moves in your favor. With BoA's exchange rate, it's more difficult to determine if the rate that was used on your transfer is competitive or not. With no visibility, it becomes challenging to strategically plan your transfers.

3.Know the market

Real-time rates provide a clear picture of currency movements. With BofA's rates updated once each day, you don't know whether the rate applied to your transaction is competitive or not. You lose the power to plan your transfers and gain strategically.

4.Save more

Even small differences between Bank of America's daily rates and real-time rates can add up for large transfers. Choosing overnight/real-time daily rate updates can help you send more to your recipient or reduce the amount you spend, giving you better overall value.

Bank of America exchange rates differ based on the service you are accessing. Knowing where and how to find these rates can better assist you in planning.

1.In-branch currency exchange

• Where to find: Ask for the rate at specific Bank of America currency exchange locations.

• How it works: The branch will give you an all-in discretionary rate, which reflects the bank's markup.

• Tip: When you're ordering cash, see if your delivery fee applies (orders of less than USD 1,000 have a USD 7.50 fee).

2.International wire transfers

• Where to check: Check your Bank of America online banking account or call a representative for the current wire transfer fee.

• How it works: The rate is a markup over the mid-market exchange rate benchmark and is updated once every business day.

• Tip: Write down the date and time you transfer since the rates are not real-time.

Bank of America charges markups and fees, whereas Xflow keeps its procedures transparent and easy. Let's put them next to each other so that you know what suits you better.

Why Xflow stands out for receiving money?

• Higher payouts, no hidden cuts: With Xflow, your recipient gets the true mid-market exchange rate. No hidden markups or deductions, which means more money in their hands.

• Flat, predictable fees: Instead of multiple layers of bank charges, Xflow keeps it simple with a transparent 1% fee, so you always know what's being charged.

• Quicker settlement: Money tends to arrive on the same day or next, in contrast to the 2–3 business days a standard bank transfer will take.

• Complete visibility: Real-time rate monitoring and clear fee transparency upfront allow you to know precisely what you’ll receive.

If you're using Bank of America for forex, you're paying for reliability and convenience, but at a premium. Xflow gives you the same security with more transparency, better rates, and lower fees. 

The choice is simple: stop losing money to hidden markups and outdated rates. With Xflow, you see what you get and save more.