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When sending money abroad or buying foreign currency, you will often hear terms like “mid-market rate” or “bank rate” thrown around — but what do they actually mean? And more importantly, which one should you trust when comparing providers?
This guide breaks down the difference in plain English, so you can get the best deal when exchanging currency.
What Is the Mid-Market Rate?
The mid-market rate (also known as the interbank rate) is the true exchange rate you will see on platforms like Google, XE, or Bloomberg. It’s the midpoint between the buy and sell prices in the global currency market.
✅ It is the most accurate and transparent reflection of a currency’s value at any given time.
❌ Most banks and providers do not actually offer this rate to customers.
What Is the Bank Rate?
The bank rate is what your bank or travel money provider offers you when you exchange money. It includes a hidden markup — meaning they charge slightly more than the mid-market rate so they can make a profit.
📉 For example, if the mid-market rate is 1.15 GBP to EUR, a bank might offer 1.11 — pocketing the difference.
💰 They might also charge a fee on top, making the total cost even higher.
Why It Matters
When you compare only the exchange rate, you miss the full picture. You should consider:
- The actual rate offered vs mid-market
- Any additional fees
- How much money you end up with after everything
A small change in rate or fee can mean a difference of £10–£30 or more when sending £500+.
Which Providers Use the Mid-Market Rate?
Some modern fintech companies like Wise advertise that they use the mid-market rate and charge a transparent fee instead of hiding costs in a worse rate. This can often work out much cheaper — especially for large transfers.
Bottom Line
The mid-market rate is the gold standard — but unless a provider clearly says they use it, you are likely being charged a marked-up rate.
💡 Tip: Use comparison tools (like CompareFXRate.com) to see how much you would actually receive after fees and rate markups — not just the headline rate.