The "Fee Free" Myth
Nearly all "fee free" bank accounts and credit cards use the card scheme rates which are set once a day by the card schemes - i.e., Mastercard and Visa. However, "fee free" might not be the big saving you think it is!
Since the Foreign Exchange ("FX") market rates, also known as the interbank or mid-market rates, are changing every few seconds, these card scheme rates are set with enough margin to protect against adverse market movements throughout the day.
What Does This Mean For Me?
This means that "fee free" isn't actually fee free at all. You're still paying a charge, it's just that these banks and credit card issuers aren't being transparent about it.
Based on data from July, Aug, Sep 2024 across 8 currency pairs, the average markup (which is essentially a fee) over the interbank rate was 0.55%. This varies throughout the day, depending on which direction the market moves, but on average that's how much you're actually being charged with a typical "fee free" account.
Why Should I Use Currensea?
Currensea uses our own rate, called the Currensea Realtime Rate. This rate tracks the interbank rate for the major 16 currency pairings and applies a transparent markup of 0.5%. For the remaining 164 currency pairings, we use the Mastercard Rate and apply the same markup.
So, when you pay for that dinner on holiday in one of those major currencies, the price you pay is based on that realtime interbank rate at the exact second you pay the bill alongside a markup of 0.5%. The end result is a rate which on average is similar, if not slightly better, than typical "fee free" bank accounts like Monzo and Starling.
Where Can I See This Rate?
You can view our live rates at any time here: https://www.currensea.com/pricing/exchange-rates