The FBAR exchange rate is the US Treasury Reporting Rate of Exchange for the last day of the calendar year being reported, published by the Bureau of the Fiscal Service. Divide each account's highest foreign-currency balance by that year-end rate to get the US dollar maximum value on FinCEN Form 114. If Treasury publishes no rate for a currency, use another verifiable rate and record its source.
Currency conversion causes more FBAR errors than almost anything else. Americans in the UK and UAE often use the rate on the day of their peak balance, the IRS yearly average, or their bank's app. None of those is the FBAR rule. This guide explains which rate to use, how to apply it, and why Form 1116 and your Form 1040 income use different rates altogether.
What the FBAR exchange rate rule says
The FinCEN instructions for the Report of Foreign Bank and Financial Accounts (FBAR) tell filers to convert each account's maximum value into US dollars using the Treasury's Financial Management Service rate, now the Bureau of the Fiscal Service, for the last day of the calendar year. The rate is the one in force on 31 December, not the date the balance peaked.
Where to find the Treasury Reporting Rates of Exchange
The Bureau of the Fiscal Service publishes the Treasury Reporting Rates of Exchange each quarter on FiscalData. For an FBAR, select the quarter ending 31 December of the reporting year. For the 2026 FBAR, due in 2027, you would use the rate for 31 December 2026.
The rate is quoted per US dollar
Treasury quotes each rate as units of foreign currency per one US dollar, for example pounds sterling per dollar or UAE dirhams per dollar. Therefore, you divide the foreign balance by the rate. Multiplying instead is a common mistake that can turn a reportable account into an apparently unreportable one.
How to convert a maximum account value
The FBAR asks for each account's maximum value during the year. Our guide to FBAR maximum account value explains how to find that figure. Once you have it, the conversion follows four steps.
- Find the highest balance in the account's own currency for the calendar year.
- Look up the Treasury Reporting Rate for that currency on 31 December.
- Divide the foreign balance by the rate to get US dollars.
- Round any fraction up to the next whole dollar, as the FinCEN instructions require.
An illustrative UK example
Suppose an American in Manchester held a Barclays current account that peaked at £80,000 in March and closed the year at £10,000. If the 31 December Treasury rate were 0.75 pounds per dollar, the reported maximum value would be £80,000 ÷ 0.75 = $106,667. The peak balance is used, but the year-end rate converts it. The 0.75 rate is illustrative only; always use the published figure.
An illustrative UAE example
The UAE dirham is pegged to the dollar at roughly 3.6725 dirhams per dollar, so the rate barely moves. A Dubai savings account peaking at AED 50,000 would convert to about $13,615. Even so, use the Treasury figure for 31 December rather than the peg, so your working matches the instructions.
When Treasury publishes no rate
Treasury does not list every currency, and some rates are missing for particular quarters. In that case, the FinCEN instructions allow another verifiable exchange rate, such as a central bank or major bank rate for 31 December. You should note the source used in your records, so the figure can be explained if FinCEN or the IRS asks.
Accounts held in US dollars
Many UAE and UK banks offer US dollar accounts. No conversion is needed for these; report the maximum dollar balance directly. However, the account still counts toward the $10,000 aggregate FBAR threshold.
FBAR rate versus other US exchange rates
The FBAR rule is specific to information reporting. Other parts of the US return use different rates, which is why figures rarely match across forms.
| Purpose | Form | Exchange rate to use | Source |
|---|---|---|---|
| Foreign account maximum value | FinCEN Form 114 (FBAR) | Treasury Reporting Rate for 31 December | FinCEN instructions; Bureau of the Fiscal Service |
| Specified foreign financial assets | Form 8938 | Treasury Reporting Rate for the last day of the tax year | IRS Form 8938 instructions |
| Foreign wages and investment income | Form 1040 | Spot rate on receipt or IRS yearly average, used consistently | IRS |
| Foreign taxes for the credit | Form 1116 | Generally the yearly average rate for accrued taxes, or the payment-date rate | Section 986 and IRS guidance |
| Foreign earned income exclusion | Form 2555 | Spot rate on receipt or IRS yearly average | IRS |
Keeping FBAR and Form 8938 consistent
Form 8938 also uses the Treasury year-end rate, so values on the two forms should be consistent where the same accounts appear. Our comparison of FBAR versus Form 8938 explains the different thresholds. Differences in rates used on Form 1116 are expected; the foreign tax credit and double taxation pillar covers how foreign taxes are translated.
The $10,000 threshold and exchange-rate edge cases
An FBAR is required when the combined maximum values of all your foreign financial accounts exceed $10,000 at any time during the calendar year, according to IRS FBAR guidance. Because the conversion uses the year-end rate, currency movements can push a borderline filer above or below the line.
Do not argue the threshold with a different rate
If your aggregate is close to $10,000 at the Treasury rate, file. The penalty for a non-willful failure is significant, while filing an unnecessary FBAR costs nothing. If you discover a past conversion error, our guide on how to amend an FBAR walks through the correction.
Deadlines
The FBAR is due on 15 April following the calendar year, with an automatic extension to 15 October. No request is needed. Our FinCEN 114 filing guide covers the BSA E-Filing process step by step.
Frequently Asked Questions
What exchange rate do I use for the FBAR?
Use the US Treasury Reporting Rate of Exchange for the last day of the calendar year being reported, published by the Bureau of the Fiscal Service on FiscalData. Divide each account's maximum foreign-currency balance by that rate to get the US dollar value for FinCEN Form 114, and round any fraction up to the next whole dollar.
Can I use the IRS yearly average exchange rate for my FBAR?
No. The IRS yearly average exchange rate is used for income on Form 1040 and often for foreign taxes on Form 1116, but the FBAR uses the Treasury Reporting Rate for 31 December of the reporting year. Using the yearly average rate on FinCEN Form 114 is a common error and can misstate account values.
Do I use the exchange rate on the date my UK account peaked?
No. You take the account's highest sterling balance during the year, but convert it using the Treasury Reporting Rate for 31 December, not the rate on the day of the peak. For example, a £80,000 March peak is converted at the year-end rate, even if the pound was stronger or weaker in March.
How do I convert a UAE dirham account for the FBAR?
Divide the account's maximum dirham balance by the Treasury Reporting Rate for the UAE dirham on 31 December. Because the dirham is pegged to the US dollar at about 3.6725, the result is close to the peg, but US citizens in the UAE should still use the published Treasury figure on FinCEN Form 114.
What if Treasury does not publish a rate for my currency?
If the Treasury Reporting Rates of Exchange do not include a currency, the FinCEN FBAR instructions allow another verifiable exchange rate for 31 December, such as a central bank or major bank rate. Keep a record of the source used, so the FBAR value can be explained if FinCEN or the IRS asks.
Does Form 8938 use the same exchange rate as the FBAR?
Generally yes. The IRS Form 8938 instructions direct filers to use the Treasury Reporting Rate for the last day of the tax year when converting specified foreign financial assets. For most individuals, that is the same 31 December rate used on FinCEN Form 114, so values for the same accounts should be consistent.
Do I need to convert US dollar accounts held at a UK bank?
No conversion is needed for accounts denominated in US dollars, even if the bank is in the UK or UAE. Report the maximum dollar balance directly on FinCEN Form 114. The account still counts toward the $10,000 aggregate threshold that triggers the FBAR filing requirement.
Get your FBAR values right
Exchange-rate errors are easy to make and easy to avoid. Tranzesta prepares FBARs and Form 8938 for Americans with accounts in the UK and UAE, and can review prior filings for conversion mistakes. Book a consultation to have your foreign account reporting checked.
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