A bank makes profit on currency transfers in two ways; firstly, by charging fees and commission; and secondly by offering less competitive exchange rates.When researching exchange rates, you might have come across the term interbank rate. The interbank (IB) rate is the level at which a major currency provider can buy currency for. When the broker or bank sells the currency on to you, the difference between what they paid for the currency, and what they sell it to you for, is known as the spread.Banks have bigger spreads than brokers, which means you’ll typically get 3-4% less for your currency transfer and earn them more profit on the transaction. Meanwhile, brokers still earn money for their currency transfer service, just with a significantly smaller spread. Pair a bank’s less competitive exchange rate with their average fees of between $12-50 as well as commission, and you’ll find your currency transfer can be much more expensive than you first thought. It may not seem significant in smaller terms, but when you’re transferring thousands of pounds for a property purchase, you can gain tens of thousands, just by steering away from your local bank and using a broker.