Ever landed in a foreign country and had that sudden, heart-sinking realization that you forgot to check the exchange rate? You’re standing at a taxi stand, clutching a colorful banknote you don't recognize, wondering if you just handed over the equivalent of five bucks or fifty. If you’re heading to Bermuda, I’ve got some news that might actually make you breathe a sigh of relief. Or, if you aren't careful, leave you with a wallet full of "monopoly money" you can't spend anywhere else.
Basically, the Bermuda dollars to US dollars relationship is one of the simplest—and yet weirdly trickiest—financial setups in the world.
The One-to-One Reality
Let’s get the big question out of the way first. One Bermuda Dollar (BMD) equals exactly one US Dollar (USD). It’s a fixed peg. This isn't like the Euro or the British Pound where you have to do mental gymnastics every time you look at a menu. If a rum swizzle costs $15 BMD, it costs $15 USD. Simple, right?
The Bermuda Monetary Authority (BMA) has kept this peg rock-solid since 1972. Before that, the island was on the Bermudian Pound, tied to British sterling. But since the island does so much business with the States—and since most tourists come from the East Coast—they just locked it in at par.
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Honestly, for the average traveler, this means you don't even need to visit a currency exchange desk when you land at L.F. Wade International Airport. You can walk off the plane with a pocket full of US Benjamins or Georges and spend them at any grocery store, bar, or moped rental shop on the island.
The Trap: It’s a One-Way Street
Here is where people get tripped up. While you can spend US dollars everywhere in Bermuda, you absolutely cannot spend Bermuda dollars in the United States. You can’t even spend them in the airport in New York or London.
I’ve seen it happen a dozen times. Someone leaves the island with fifty bucks in Bermuda notes, thinking they'll just change it back at home or spend it on their next trip. Then they realize their local bank in Ohio has never even seen a Bermuda dollar and won't touch it.
Bermuda's currency is "non-convertible" outside its borders. If you have BMD left over, you’re essentially holding a very pretty souvenir.
Why you’ll end up with Bermuda cash anyway
Even if you pay for everything in US cash, you will almost certainly receive your change in Bermuda dollars. The island's economy uses both interchangeably, but the "change" in the drawer is usually local.
Pro tip: In the last two days of your trip, start being strategic. If you’re at a shop, ask the cashier: "Hey, do you have any US change?" They’ll usually help you out if they have it. Otherwise, use those local notes to pay for your last breakfast or that final taxi ride to the airport.
Breaking Down the Fees
You might think that because the rate is 1:1, there are no costs involved. That's a myth.
If you are a resident of Bermuda or someone opening a local bank account, you’ll run into the Foreign Currency Purchase Tax (FCPT). As of now, there’s a 1.25% tax when buying foreign currency (like USD) from a local bank. It’s the government’s way of keeping a little extra in the coffers when money leaves the island.
For tourists, the "fee" is usually hidden in your credit card statement.
- Foreign Transaction Fees: Even though the rate is 1:1, your bank sees a "foreign" entity. If your credit card charges a 3% foreign transaction fee, that $100 dinner just cost you $103, regardless of the peg.
- The ATM Gamble: Most ATMs on the island dispense Bermuda dollars. If you use a US-based debit card, your bank will charge you a conversion fee and likely an out-of-network fee.
- HSBC Exception: HSBC has a big presence on the island. Some of their ATMs in Hamilton actually allow you to choose between USD and BMD. If you need cash, find one of those.
The "Hogge Money" Legacy
Bermuda’s money is actually some of the most beautiful currency you’ll ever see. It’s not just boring green paper. We’re talking vibrant pinks, blues, and oranges.
The $2 note is turquoise and features a Bluebird. The $50 is a rich purple with a Longtail bird. They even recently moved to polymer (plastic) for the lower denominations because the salt air and humidity in Bermuda are absolute killers for paper money.
If you look closely at the coins, you’ll see a pig on the penny. That’s a callback to "Hogge Money," the island's first currency from the 1600s. Early settlers found the island overrun with wild hogs (left behind by Spanish shipwrecks), so they put them on the coins. It's a cool bit of history, but a "Hogge Penny" won't get you very far at the Frog & Onion Pub today.
What About Other Currencies?
If you’re coming from Canada or the UK, don't expect the same 1:1 treatment. While Bermuda is a British Overseas Territory, the British Pound is not used for daily transactions.
You’ll have to go to a local bank—like Butterfield or Clarien—to swap your Pounds or Loonies. They use the daily global market rates for these, often with a significant spread (the difference between the buy and sell price).
How to Handle Your Money Like a Local
If you want to avoid the headache of the Bermuda dollars to US dollars confusion, follow this mental checklist:
- Bring US Cash: Small bills are king. You’ll need them for tipping and small vendors who might not have a card reader.
- Check Your Plastic: Use a credit card with No Foreign Transaction Fees. This is the single biggest money-saver.
- The "Spend Down" Rule: On your final day, use your Bermuda cash first. Save your US cash for the airport or when you land back home.
- The $2 Bill Souvenir: If you’re going to keep any local money, keep the $2 bill. It won the "Banknote of the Year" award a few years back because it’s stunning. It’s worth more as a bookmark or a gift than the two bucks you’ll lose by not exchanging it.
Actionable Steps for Your Trip
- Call your bank: Ensure they know you’re traveling to Bermuda so they don't freeze your card when they see a charge from "Hamilton."
- Avoid the Airport Exchange: The rates for non-US currencies at airport booths are almost always worse than what you’ll get at a local bank in the city.
- Download a Converter: If you are dealing with GBP or CAD, keep an app like XE or Revolut handy to track the daily shifts against the BMD.
- Empty the Jar: Before you check out of your hotel, check your pockets, your bags, and the nightstand for any loose BMD coins. Once you leave the island, they are literally just metal.
Bermuda is expensive—there’s no way around that. But the currency shouldn't be the thing that stresses you out. Just remember: spend it there, or leave it there.