FX Spread vs Fee Calculator

There are two ways to charge someone for a currency conversion and only one of them is visible. A platform can add a fee, which appears as a line item and gets compared. Or it can quote you a worse exchange rate than the real one and keep the difference, which appears nowhere at all, because a rate quoted to four decimal places gives nobody any intuition about what it costs. The second method is why a zero percent foreign exchange fee is one of the most reliably misleading claims in retail finance. This page separates the two. Enter the mid-market rate, which is the true rate sitting halfway between what buyers and sellers are quoting and which any search engine will show you for nothing, then enter the fee and the actual rate each platform will give you. It works out the mark-up hidden in each rate, adds it to the advertised fee, and reports one true total cost measured the only way that means anything: how much foreign currency actually reaches you compared with the mid-market rate. It then ranks the platforms twice, once by what they advertise and once by what they cost, and shows you whether those two orders agree. On realistic numbers they frequently do not, and the option that looks cheapest is the dearest by a wide margin. The last table translates any exchange rate into the percentage it represents, which is the piece of arithmetic that makes a quoted rate comparable to a quoted fee.

Calculate.co.nz is proud to be partnered with realtor.co.nz, a trusted resource for navigating the New Zealand property market. Their Helpful Articles section offers clear, well-structured insights across buying, selling, and building, making complex real estate topics more accessible. With a focus on up-to-date guidance and practical knowledge, they empower Kiwis to move forward with clarity and confidence in a constantly evolving property landscape.

Two Ways To Charge, One Of Them Invisible

A fee appears as a line item and gets compared. A worse exchange rate appears as a number with four decimal places and gets accepted.

On the worked example the platform charging nothing takes US$90.00 and the platform charging 0.35% takes US$20.48. Both statements about their fees are true. Only one of them describes the cost.

Worked Example: $10,000 At A 0.5850 Mid-Market Rate

Platform A advertises no fee and offers 0.5760. That is a 1.538% mark-up, so you receive US$5,760.00.

Platform B charges 0.35% and offers the mid-market rate. Total cost 0.350%, and you receive US$5,829.53.

Platform C charges 0.10% and offers 0.5820, a 0.513% mark-up. Total cost 0.612%, and you receive US$5,814.18.

The mid-market rate would have given US$5,850.00. Choosing Platform A over Platform B costs $118.85 on a $10,000.00 conversion, and Platform A is the one that looks free.

The Middle Case Is The Hardest To Catch

Platform A is at least obvious once you check the rate. Platform C is the one that gets past people.

It charges a visible fee, which makes the pricing look transparent and invites you to compare that number against everyone else's. Meanwhile US$29.97 of its US$35.82 total cost sits in the rate, which is six times what the fee collects.

A disclosed fee is not evidence of honest pricing. It is evidence of a disclosed fee.

Three Thousandths Is Half A Percent

The reason mark-ups work is that exchange rates carry no intuition. Nobody looks at 0.5820 against 0.5850 and thinks half a percent, because the numbers are small and the difference looks smaller.

The translation table above fixes that. A rate of 0.582075 is a 0.50% charge. A rate of 0.579150 is 1.00%. Three thousandths of a point either way moves the cost by half a percent.

Convert the rate into a percentage before you compare anything, because that is the only form in which a rate and a fee can be weighed against each other.

Do Not Add The Two Percentages

A small technical point that matters when the margins are fine. The fee is taken first and the marked-up rate is applied to what remains, so the two compound rather than sum.

On Platform C, 0.10% plus 0.513% would suggest 0.613%. The true figure is 0.612%, because the mark-up applies to an amount the fee has already reduced.

The difference is a rounding error here and grows with the size of the charges. This page measures the cost by what actually arrives rather than by adding the components, which sidesteps the issue entirely.

Check It At The Right Moment

Both the mid-market rate and the rate you are offered move continuously, so they have to be compared at the same instant.

A rate captured an hour after the mid-market rate you are measuring it against will show you the market's movement rather than the platform's mark-up, and the market can easily move further in an hour than the entire charge.

Start a conversion, read the rate on the confirmation screen before committing, and look up the mid-market rate in another tab at the same time. That takes a minute and it is the only reliable way to do this.

Or Sidestep The Question

For share investing there is often no need to convert anything. A New Zealand domiciled fund holding foreign assets is bought and sold in New Zealand dollars, so no conversion ever touches you.

The fund manages the currency internally at institutional rates and the cost sits inside its fee, which makes it a comparison on total cost of ownership rather than on conversion charges. Our total cost of owning a US ETF calculator produces the figure to carry into that comparison.

And if you do convert, remember it happens twice. Our repatriation cost calculator covers the trip home, which is where the second mark-up is applied to a balance that has grown.

Related NZ Currency and Offshore Calculators

• US Share FX Cost Calculator: the entry conversion in detail.
• Repatriation Cost Calculator: the round trip, including the trip home.
• FX Fee Tier Break-Even Calculator: whether a paid tier pays for itself.
• Total Cost Of Owning A US ETF Calculator: conversions plus tax plus fees.
• FX Drip-Feed vs Lump Sum Calculator: whether to convert all at once.