Well banks are businesses, not charities. Currency exchange brokers offer more competitive rates, but they also make their profit from the spread, and if they go bust while they have your money then you're unlikely to see it again. You're getting your knickers in a twist over nothing; there is absolutely no way that you as a private individual with a relatively small amount of money can exchange money at commercial rates. The "prevailing rates" have nothing to do with you: they are reserved for banks moving tens of millions of dollars a day, not a private individual with a bit of spare change.What you should be more concerned about is how the rate compares with other institutions' rates: Nationwide are very competitive, for example. But the differences won't be huge (PayPal excepted).
I just got hit by a 78 pound overdraft charge by Halifax cause my account was overdrawn by 80 pence! I tried talking to the buggers but to no avail! Agreed Banks arent charities but 78 quid for 80 pence is simply ridiculous!! The prevailing rate is the one that one is able to exchange foreign currency why then cant the banks let us do the same!!