Unravelling Bank Commissions: Navigating Charges and Empowering Your Financial Choices
Picture of Pavel Soifer

Pavel Soifer

CEO and Co-Founder of Hedgewiz

7 minutes read

Banks play a crucial role in our financial lives, providing us with necessary services and facilitating transactions. However, it’s widely acknowledged that banks impose a range of commissions and fees for their services, a reality that can sometimes leave customers feeling financially burdened. 

In this article, we will uncover the truth behind bank commissions, explore the areas in which banks charge fees, and provide you with valuable tips to protect yourself from being taken advantage of.

Knowledge is power, and by understanding how banks operate, you can minimize the impact on your wallet.

Understanding Bank Commissions

Banks charge commissions in numerous areas, resulting in hundreds of different types of fees. From foreign exchange transactions to securities trading, banks find ways to capitalize on every opportunity. 

While supervisory authorities are in place to protect customers, banks remain cunning and go to great lengths to maximize their profits. They even resort to hidden fees, which often generate the most significant income for them. These hidden fees are the ones that silently deplete your funds without you even realizing it. 

It is clear that the big money comes from the side of the hidden and not
visible fees (commissions).

The Importance of Knowledge

In the battle against being robbed by banks, knowledge is your greatest weapon. By equipping yourself with information about the commissions banks charge, you gain the power to make informed decisions and protect your finances. Let’s dive into ten essential tips that will help you reduce the banks’ ability to rob you.

Tip 1: Request a Comprehensive List of Foreign Exchange Commissions

First and foremost, ask your bank for a detailed list of all the foreign exchange commissions they charge. In most countries, banks are obligated to provide this information to their customers. 

By reviewing this list, you can gain valuable insights into the fees you have been paying and assess their impact on your finances. Additionally, some banks may even disclose the total fees you have paid over the previous calendar year.

Ask your bank for a list of all types of foreign exchange commissions it charges you. In most countries, the bank is obliged to provide you with this list and, in some cases, even how many fees you paid in the last calendar year.

Tip 2: Leverage Your Transactions to Negotiate Better Terms

If your business frequently engages in foreign exchange transactions, you become a more interesting client to the bank. The more conversions you make, the greater your significance to the bank. 

Therefore, if you find yourself in this position, leverage your transaction volume to negotiate better terms. Approach your bank and explain your company’s activities, emphasizing the foreign exchange operations you regularly conduct. This will demonstrate your value to the bank and give you leverage to negotiate improved conditions.

If you rarely perform FX transactions, the bank has no interest in you and you will not receive any discount. But if you engage in imports or exports on a regular basis, the bank considers you an interesting client.

Tip 3: Explore Alternative Banks for Counter Offers

Don’t limit yourself to just one bank. Reach out to other banks and explain your business and its foreign exchange needs. Request a counteroffer to the one provided by your current bank. 

By exploring alternative options, you open up the possibility of finding better terms and conditions that can potentially save you significant amounts of money. 

Contact another bank. Explain to the banker what you do and what your company does. List the foreign exchange operations you have and ask for a counteroffer to the one your bank provided.

Tip 4: Consider Smaller Banks for More Flexibility

When it comes to negotiating better conditions, larger banks may not be as flexible as smaller ones. Smaller banks often have the advantage of being more flexible and sympathetic to their client’s needs. They are willing to go the extra mile to bring you better terms and conditions, giving you an opportunity to save more money. 

The larger your bank is, the lower your chances of improving your conditions are, compared to a smaller bank, which will be more flexible and sympathetic to bring you better conditions.

Tip 5: Assess the Cost of Cross Border Payments

If your business regularly pays and collects cross-border payments, it’s essential to evaluate the cost of these commissions. Banks often charge excessive fees in this area, making it a potential source of substantial savings. 

Take the time to compare the fees charged by different banks and consider alternative entities that specialize in cross-border transfers. These specialized entities, although not traditional banks, are often more efficient and offer lower fees due to their streamlined operations. 

If your business pays & collects cross-border payments, you must also examine the cost of those commissions. The banks take far too much in this section.

Tip 6: Look Beyond Traditional Banks for Lower Fees

When dealing with countries that are not among the OECD countries, banking fees related to cross-border payments tend to increase significantly. In such cases, it’s worth considering alternative options outside of traditional banks. Look for supervised entities specializing in international transfers, as they often offer lower fees due to their higher efficiency and lower operational costs.

You should consider switching to entities that are not banks but specialize in such transfers. These are supervised entities, with high financial stability, and they ask you for lower fees than the banks do, that’s because they are much more efficient than any bank and therefore their expenses are lower.

Tip 7: Unraveling the Mystery of Hidden Fees

Hidden fees are where banks truly make their greatest profits. The spread between buying and selling rates for foreign currency transactions is one of the key areas banks exploit. 

Unfortunately, customers often have limited visibility into the extent of these fees. To combat this, it’s crucial to make comparisons between different banks and financial institutions specializing in foreign exchange. By conducting thorough research, you can uncover the best rates and avoid excessive fees. 

Specifically, it is mainly the spread of buying and selling rates between currencies. That’s where the big money is. In fact, in FX, the banks make their greatest profits, because the customer does not really know how much he is paying in relation to how much he could have paid.

Tip 8: Consider Currency Rarity and Conversion Frequency

The rarity of currencies and the frequency of conversions can significantly impact the fees charged by banks. As you venture into more esoteric and less common currencies, the margins banks charge may increase. It’s crucial to be mindful of this and only convert currencies when necessary.
Minimizing unnecessary conversions can help you save a substantial amount of money in the long run. 

The more you perform conversions in currencies that are more esoteric and
less common, the more the margins jump and can even reach several
percentages of the size of the transaction.

Tip 9: Exercise Caution with Currency Conversions

To further reduce fees, it’s important to be selective with your currency conversions. Convert only the currencies that are required, avoiding excessive conversions that can lead to unnecessary fees. By being mindful of your conversion activities, you can minimize the impact on your wallet and maximize your savings. Convert only what you must and no more.

Tip 10: Opt for Delivery Forward Transactions

If you utilize hedging tools for your transactions that require currency conversions upon expiry, it is advisable to opt for delivery-forward transactions instead of non-delivery-forward (NDF) transactions. NDF transactions only account for the difference between the end rate result, leaving you with the need for an additional conversion transaction in the market.

By choosing delivery-forward transactions, you avoid unnecessary double conversions and the associated fees. 

If you use hedging tools for hedging transactions that on expiry need a conversion between currencies, don’t do the hedge with an NDF (Non-delivery forward). Focus on executing Delivery forward transactions only.


Banks may have the power to charge commissions and hidden fees, but you have the power to protect yourself. By arming yourself with knowledge and following the tips outlined in this article, you can minimize the banks’ ability to rob you. Remember, it’s essential to stay informed, regularly review your bank statements, and explore alternatives when necessary. 

Take control of your finances and ensure that you are getting the best possible terms and conditions from your bank.