Spreads in currency exchange: what it is and how much it really costs you (cross-border guide)

Context

In brief

• The spread is the difference between the reference rate published by the Swiss National Bank and the rate at which an institution actually sells or buys the currency.
• The SNB rate updates once a day, while the market rate (ForEx) is constantly changing.
• The spread is incorporated into the rate itself and is used to remunerate banks and institutions for the service and price risk.

Key Facts

• What: The spread is the difference between the reference rate and the market rate.
• When: The SNB rate is updated once a day.
• Where: The market rate (ForEx) is constantly changing.
• Who: Banks and institutions are remunerated for service and price risk.
• Amount: The spread can vary from 1% to 2%.

The spread is an item that almost no site explains in full. It is the difference between the reference rate published by the Swiss National Bank and the rate at which an institution actually sells or buys the currency. The SNB rate updates once a day, while the market rate (ForEx) varies constantly.

The reference rate published by the SNB for the end of July 2026 was close to 0.9295 francs per euro. A salary of 4,000 francs, converted at that rate, would be worth about 4,303 euros. With a spread of 1%, that amount is reduced by about 43 euros. With a spread of 0.3%, typical of more transparent conditions, the loss drops to about 13 euros; with a spread of 2% it rises to about 86 euros.

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Operational details

Spreads in currency exchange: what it is and how much it really costs you

The spread is a fundamental concept in the world of currency exchange, yet many of us are not familiar with it. That's why we want to explain it clearly and simply, so you can understand how it works and how much it really costs you.

What is the spread?The spread is the difference between the exchange rate charged by your ATM or bank and the actual exchange rate in the market. In other words, it is the difference between the price at which you can exchange your currency and the price at which you can buy the currency you want.

For example, if the exchange rate of the day is 1 CHF = 0.90 EUR, but your ATM requires 0.85 EUR per 1 CHF, the spread is 0.05 EUR (0.90 - 0.85). This means that for every CHF you exchange, you will lose 0.05 EUR.

How does the spread work?

The spread is proportional to the amount: it weighs in the same way, as a percentage, on one hundred francs or ten thousand. A fixed commission, when there is one, is added regardless of the amount changed, and for this reason it affects small amounts much more than large ones. The net rate is the number that really matters: the reference rate already corrected for spreads and commissions, the one that tells you exactly how many euros you will receive for your francs, or vice versa.

Exemplify with real numbers

Imagine you want to exchange 1,000 CHF for EUR. If the exchange rate is 1 CHF = 0.90 EUR, but your ATM requires 0.85 EUR per 1 CHF, the spread is 0.05 EUR. This means that you will lose 50 EUR (0.05 x 1,000) to change your currency.

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Key points

Spreads in currency exchange: what it is and how much it really costs you

Comparing two conditions does not require complicated tools, but a precise order. For example, you should always start with the reference rate published by the SNB on the day of the transaction, not from a value seen days before. You have to ask for the net rate that the institution would apply on the specific amount to be changed, not an 'average' spread valid for any amount. You have to calculate the difference in euros, not just in percentage points, because it is that absolute figure that ends up in the account. And you should check if there is also a separate fixed commission, because on small amounts it can weigh more than the spread itself.

The exchange rate is the price at which one currency is exchanged for another. In Switzerland, most banks market currency exchange at a rate of 2.50% for the Euro-Swiss exchange rate. This means that if you exchange 1,000 euros for 1,025 Swiss francs, the difference of 25 francs is the cost of the exchange.

But be careful! The exchange fee may vary depending on the institution and the amount. Some banks may charge a fixed fee of 10-20 francs per transaction, while others may charge a spread of 1.5-2.5% on the exchange rate.

For example, if you exchange 1,000 euros for 1,025 Swiss francs and apply a spread of 2% and a fixed commission of 15 francs, the exchange cost will be 20.50 francs (2% of 1,025 francs + 15 francs). If a spread of 1.5% and a fixed commission of 10 francs are applied, the exchange cost will be 14.25 francs (1.5% of 1,025 francs + 10 francs).

Here is a concrete example:

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