Author, Andrew Gibson
Transferring money from the UK to the USA is easy once you understand how it works.
Put simply; you can either use a bank or a money transfer service.
I’ll explain the process, how long it takes, the options you have, and the costs involved.
How to transfer money to the USA (in 4 simple steps)
It might seem daunting to send money from the UK to the USA, but in practice, the process is extremely quick and easy.
Here’s how it works…
Step 1: Register
All new customers must register to comply with anti-money laundering rules.
It is a legal requirement to identify a person before they can send money overseas.
Fortunately, this is normally straightforward and can be done the same working day (sometimes in under an hour).
Most people can be identified quickly and easily through basic details such as their name, address and passport number.
Step 2: Secure a GBP to USD exchange rate
Once you are registered, you are in a position to lock-in a GBP/USD exchange rate if you wish.
At any time you can request the latest rate.
No transaction will take place without your consent to go ahead.
If you are happy to proceed with the US Dollar rate quoted, your bank or money transfer service will lock-in your rate.
You will then be emailed a confirmation of your transaction, with the amount of US Dollars you have bought and the amount of Pounds you have sold.
Step 3: Send in your Pounds
Your bank or money transfer service will provide you with the bank details of where to send your Pounds.
For most people, this will involve a regular domestic bank transfer (UK bank to UK bank) – like paying a bill.
Step 4: Your Pounds are converted to US Dollars and sent out
Once your your bank or money transfer service have received your Pounds, they will convert them into US Dollars at the exchange rate agreed and send your money to the US bank account you’ve requested.
That’s it in a nutshell.
One thing to note – an international money transfer is basically the same thing as a wire transfer or telegraphic transfer. Different places use different jargon.
How long does it take to send money to the USA?
Whether you use a bank or money transfer service, your money will be sent to the United States via the SWIFT international payment system.
SWIFT is a secure system that links banks all around the world.
It typically takes 1 to 3 working days to transfer money from a UK to a US bank account.
The time taken varies because some US banks are a bit slower than others at clearing your funds.
International money transfers also have daily cut-off times.
If you send your funds into your bank or money transfer service in the afternoon (usually after 2 pm), that could count as the next working day.
For those with a tight deadline, I would suggest sending your money to your bank or money transfer specialist in advance of the currency conversion as it will make the end-to-end process quicker.
What information do you need?
Before you can send money to the USA, you need to provide details about where you want your money sent.
Here’s the recipient information you need:
- Name of recipient
- Account name
- Routing number (9 digits)
- Bank account number (10-12 digits)
The US bank account can be in your name or the name of a ‘third-party’, such as a relative, business, or lawyer.
If you’re unfamiliar with a routing number, it is a 9-digit code that identifies where you opened your bank account in the United States.
A routing number is also sometimes called an ABA or RTN (don’t you hate financial jargon).
The routing number can be found as the first digits in the bottom left-hand side of a cheque.
Your account number will usually be 10-12 digits long and is the second set of numbers running along the bottom of a cheque.
You can also get this information by logging into the bank account or asking in a branch.
If you are concerned about getting all the details right, a money transfer specialist can help check things over for you.
Bank or money transfer specialist – what’s the difference?
In days gone by, people had little choice but to use their bank to send money to the USA.
Fortunately, the ‘banking cartel’ on foreign exchange is over.
Money transfer specialists are a cost-effective and efficient alternative to using a bank.
There is no doubt a convenience to using your bank because normally they are holding your money already.
But speaking from my own experience, I’ve found the banks charge more and make you do most of the work.
The total cost is a combination of fees and exchange rates.
The most common type of fee incurred is a transfer fee.
Transfer fees are typically a flat fee charged by the banks on every international transfer.
Here are the transfer fees charged by some of the UK’s biggest banks:
- Barclays charge £25 (standard) or £40 (priority) if you use a branch. They also charge the recipient £6.
- Lloyds charge £9.50 (online or branch). The recipient is also charged £12.
- HSBC charge £9 (online or branch) and an £8 recipient fee.
- Natwest charge £15 if under £5,000 or 0.3% (max £40) if over £5,000.
You will notice above that some of the banks actually charge you two transfer fees – one for sending the money and one for receiving the money. The cheek of them!
While the transfer fees are annoying, the real money is made from the exchange rate.
As a general rule, banks can charge up to 3%-5% in exchange rate costs to send money to the USA.
The exact percentage depends on the amount you’re sending.
As money transfer specialists have much lower overheads, they can undercut the banks on both fees and exchange rates.
The savings can be substantial.
If you know how much you want to send, it’s best to make a direct comparison with your bank.
I would also suggest making a comparison at roughly the same time as exchange rates change throughout the day.
5 reasons you shouldn’t use your bank
- It’s not their area of expertise
- Their exchange rates are uncompetitive
- Banks charge you various fees
- They won’t help you with the timing of your transfer
- You are not their priority
How safe is a money transfer service?
Not all money transfer services are Authorised and Regulated by the Financial Conduct Authority (FCA) – the UK’s financial watchdog.
In fact, some aren’t regulated at all.
The reason it matters is that FCA Authorised companies are required to hold any client money in safeguarded accounts.
It means that your money is held in a separate customer bank account.
For peace of mind, I would recommend you choose a company that is Authorised and Regulated by the FCA.
If you want to verify the regulatory status of a UK-based company, you can type their name into the Financial Services Register to ensure they are fully regulated.
Why you can’t trust online exchange rates
These days it’s easy to get an exchange rate online.
There’s a whole bunch of foreign exchange websites, such as XE, DailyFX and Oanda, that display live rates.
But if you look close enough on these sites, you will find a disclaimer revealing that the rates shown are “not available to consumers” or “for informational purposes only”.
What you see online is something called ‘interbank rates’. They are not customer rates.
Interbank rates are used by banks to trade with other banks.
I’ve also found a lot of comparison sites aren’t reliable.
The rates I’ve seen quoted on comparison sites are usually non-binding, which makes me think they are basically ‘teaser rates’ to get the click.
Some of the leading comparison sites also quote you on weekends and public holidays, but the currency markets aren’t even open! What does that tell you?
To me, it’s irrefutable proof the rates aren’t real.
An alternative is to get an exchange rate directly from the source and cut out the middleman.
At least that way you can better plan your future by using a genuine rate.
How to achieve a better exchange rate
The GBP to USD exchange rate changes every 2-3 seconds throughout the day.
While the moves might look small, even tiny moves in the rate can make a big financial difference.
As an example; on a £75,000 money transfer to the USA, just a 1% swing in the rate would mean a difference to you of £750.
It’s quite common to see daily moves of 1%.
And over weeks and months, the swings can move considerably more.
The point is that good timing can significantly reduce the cost of your transfer.
However, banks and online-only platforms won’t give you an help you with the rate.
Whereas, some money transfer companies, such a Key Currency, provide exchange rate guidance as part of their service.
A money transfer service can monitor the market for you and let you know when the rate moves in your favour.
The best way to transfer money from the UK to the USA will depend on whether you are comfortable doing everything yourself or if you would rather get some market guidance.
- To transfer money to the US, you can use a bank or a money transfer specialist.
- It takes 1-3 working days.
- To avoid paying excessive fees, use a money transfer service.
- Some money transfer specialists will also help you optimise the exchange rate.
- Only deal with companies Authorised by the FCA.
Key Currency is a leading money transfer specialist.
We help our customers get a better deal on sending money to the USA.
As a company, we are open and transparent.
We don’t hide behind a logo, trading platform or ‘app’.
The names, faces and backgrounds of our team of people are shown on our website.
We’re committed to providing a service of the highest integrity and safety.
Key Currency is an Authorised Payment Institution (Financial Services Register No. 753989). All money transfers are conducted through fully safeguarded accounts.
We genuinely endeavour to do a great job for our customers and have a 5-Star “Excellent” rating on Trustpilot based on over 900 customer reviews.
Our exchange rates are highly competitive and there are no additional fees or charges to worry about.
To make a no-obligation enquiry, please request a quote below.