What is the mid-market exchange rate?

The mid-market rate is the real exchange rate that banks and institutions use to trade currencies between themselves. This is the fair rate before any markup is applied.

How much do Canadian banks mark up on foreign exchange?

Canadian banks like RBC, TD, BMO, Scotiabank, and CIBC typically add 2–3% markup on top of the mid-market rate. They don't disclose this — they just show you 'their rate' as if it's the market price.

What are the hidden fees on international wire transfers?

On top of FX markups, banks charge $25–$50 per wire transfer for sending, and the receiving bank often takes a cut too. Combined with the FX markup, a single $13,520 conversion can cost $393 in hidden fees.

How much can hidden bank FX fees cost a business annually?

For a business doing 10 FX transactions per month at $13,520 average, hidden fees can total nearly $47,160 per year — the equivalent of a full-time employee's salary.

How Much Does RBC Really Charge for Foreign Exchange?

If you're a Canadian business owner banking with RBC, you've probably converted currency without thinking twice. RBC makes it easy — log into your online banking, do a transfer, and the money shows up in your USD account. No line item for "FX fee." No surcharge notification. Clean and simple.

But that simplicity is hiding something. RBC's foreign exchange markup can cost Canadian businesses 1.5% to 3% on every single conversion — and they never have to tell you about it because it's baked into the exchange rate itself.

Let's break down what RBC actually charges, how the markup works, and what it's really costing your business.

The "No Fee" Illusion

RBC, like all Big 5 Canadian banks, doesn't charge an explicit FX commission for most business conversions. On paper, that sounds great. In practice, it means the fee is hidden where most people don't look: the exchange rate spread.

Here's how it works:

The mid-market rate is the real exchange rate — the one you see on Google, XE, or Bloomberg. It's the midpoint between the buy and sell price on global currency markets.
RBC's rate is different. They add a markup (or spread) on top of the mid-market rate before quoting you.
The difference between those two rates is RBC's profit on your transaction. It's a fee in everything but name.

What Does the Markup Actually Look Like?

Let's say the mid-market USD/CAD rate is 1.3600. That means 1 USD costs 1.36 CAD on the open market.

RBC might quote you 1.3800 for that same conversion. The difference — 200 pips, or roughly 1.47% — is RBC's margin.

Here's what that looks like in real dollars:

| Transaction Size | Mid-Market Cost (CAD) | RBC Cost (CAD) | Hidden Markup | |---|---|---|---| | $10,000 USD | $13,600 | $13,800 | $200 | | $50,000 USD | $68,000 | $69,000 | $1,000 | | $100,000 USD | $136,000 | $138,000 | $2,000 | | $500,000 USD | $680,000 | $690,000 | $10,000 |

If your business converts $50,000 USD per month, that's roughly $12,000 per year going to RBC in hidden FX markups. Over five years, that's $60,000 — enough to hire a new employee.

How RBC's Rates Compare

RBC's FX markup varies depending on the transaction size, the currency pair, and whether you're a retail or commercial client. Here's what we typically see:

Retail / small business (under $10K): 2.0% – 3.0% markup
Mid-market business ($10K – $100K): 1.0% – 2.0% markup
Large commercial ($100K+): 0.5% – 1.5% markup (negotiated)

Even at the "best" tier, you're still paying 50 to 150 basis points more than the mid-market rate. And most small and mid-sized businesses never negotiate — they take the default retail rate without knowing there's a better option.

Why RBC Doesn't Want You to Notice

There's a reason RBC doesn't break out FX costs as a separate line item. If they did, you'd comparison-shop. You'd realize that FX fintechs and non-bank providers routinely offer rates that are 0.1% to 0.5% above mid-market — a fraction of what RBC charges.

The banks benefit from opacity. When the fee is invisible, customers don't question it. When customers don't question it, banks keep their margins. Canadian banks collectively earn billions per year from FX revenue, and a significant portion comes from business clients who simply don't know what they're paying.

How to Find Out What RBC Is Actually Charging You

Here's a quick way to check your RBC FX markup right now:

Find a recent FX transaction in your RBC business banking statements.
Note the exchange rate RBC applied and the date of the transaction.
Look up the mid-market rate for that date on XE.com or Google.
Calculate the difference. Divide the difference by the mid-market rate and multiply by 100 to get the markup percentage.

Example: If RBC gave you 1.3780 and the mid-market rate was 1.3600, the markup is (1.3780 – 1.3600) / 1.3600 × 100 = 1.32%.

Or, skip the manual work entirely.

Audit Your RBC FX Costs in 30 Seconds

Loop's free FX audit tool does this automatically. Upload a statement or enter your recent transactions, and we'll show you exactly how much RBC has been overcharging you — down to the dollar.

Most businesses that run the audit are shocked by what they find. The average Canadian SMB overpays $15,000 to $40,000 per year on foreign exchange through their bank.

You don't need to leave RBC. You just need to know what you're paying — and whether there's a better option.

Run your free FX audit now →

The Bottom Line

RBC is a great bank for many things. Foreign exchange isn't one of them — at least not at the rates they offer by default. The "no fee" messaging is technically accurate but practically misleading. You are paying for FX. You're just paying through a worse exchange rate instead of a transparent fee.

The first step to fixing it is knowing what you're paying. The second step is demanding better.

See what your bank is really charging →