Travelers in Iceland can exchange money through banks, currency exchange services, and ATMs. In many cases, ATMs from established Icelandic banks are a practical option because card payments are widely accepted and travelers usually need only a small amount of cash.
Places That Usually Offer Competitive Rates
The main options are:
- Bank ATMs: Landsbankinn, Íslandsbanki, and Arion Bank have ATMs in Reykjavík and other locations.
- Bank branches: These banks can exchange major foreign currencies, although branch opening hours are limited.
- Airport exchange services: Convenient at Keflavík Airport, but travelers should compare the offered rate and fees before using them.
- Currency exchange offices: These can be useful when exchanging physical foreign cash, but the advertised rate may include a spread or service charge.
ATM vs Bank vs Exchange Service
ATM:
Often the most convenient choice for getting Icelandic króna. Before withdrawing, check your own bank's foreign transaction and ATM fees. Use a bank-operated ATM where possible.
Bank:
A bank can be useful when you need to exchange a larger amount of physical foreign currency. Compare its buying and selling rate with the current market rate before making the exchange.
Exchange Service:
Exchange counters can be convenient, especially at airports, but travelers should check the final amount they will receive after commissions and rate differences.
How to Compare Exchange Rates
Do not compare only the advertised exchange rate. Instead, calculate:
Final amount received = exchanged amount − all applicable fees
For example, if two places offer similar rates but one charges a larger commission, the second option may give you more Icelandic króna.
Before exchanging money, check:
- Current market or reference rate
- Exchange rate offered by the provider
- Commission or service fee
- ATM withdrawal fee
- Your card issuer's foreign transaction fee
- Final ISK amount you will receive
Be Careful With Dynamic Currency Conversion
When paying by card or withdrawing from an ATM, you may be asked whether you want the transaction converted into your home currency.
Usually, choosing ISK (Icelandic króna) allows your card network or bank to handle the conversion. Choosing your home currency can apply a less favorable conversion rate.
Do You Actually Need Much Cash?
Iceland is highly card-friendly. Visa and Mastercard are widely accepted, so many travelers can pay for hotels, restaurants, fuel, transport, and shopping without carrying large amounts of cash.
A small cash reserve can still be useful for situations where cash is required.
Conclusion
For most travelers, a bank-operated ATM can be a practical way to obtain Icelandic króna, while bank branches are useful for larger cash exchanges. Exchange services may be convenient but should be compared carefully. The best option is not simply the one showing the highest exchange rate—it is the one that gives you the highest final amount of ISK after all fees and conversion costs.