Author, Andrew Gibson
Below is a step-by-step guide on how to transfer money from the US to the UK – without paying high charges.
I’ll explain how it works, how long it takes, and how to get a better USD to GBP rate.
How to transfer money from US to UK (in 4 simple steps)
Transferring US Dollars to a UK bank account is a straightforward process that can be done in four steps.
1. ID check
Before anyone can send money from the US to the UK, they need an identification check.
It’s a legal obligation to verify the sender of money due to global anti-money laundering rules.
This check only applies to new customers.
Usually, this check is completed on the same working day.
2. Secure a USD to GBP exchange rate
The USD to GBP exchange rate is the most cost of your transfer.
A bank or a money transfer company will quote you their current rate.
You must give your permission to proceed.
If you are happy to go ahead with the exchange rate quoted, the bank or money transfer company will lock-in your rate at that point.
You will then receive an email confirming the details of your transaction – this will include the rate agreed, the amount of Dollars sold and the amount of Pounds bought.
3. Send in your US Dollars
Banks require your US Dollars upfront before they will agree an exchange rate.
However, a money transfer company will allow you to secure an exchange rate before you transfer the funds. You normally are given 1-2 working days to send in your US Dollars (via a regular bank transfer).
On your confirmation email, it will have the details of where to send your US Dollars (in the case of a money transfer company it will be a designated client bank account).
Being able to secure an exchange rate before funding your transfer can be an advantage if the GBP to USD rate is at a favourable level, and you don’t want to miss out on that rate.
4. Your US Dollars are converted to Pounds
Your bank or money transfer company will perform this step.
Once your US Dollars are received, they are converted into Pounds at the rate previously agreed with you.
Your bank or money transfer company will then send your money via the SWIFT global payment system to the UK bank account you have nominated.
How long does it take to send US Dollars to the UK?
In usually takes 2-4 working days to transfer US Dollars to a UK bank account.
Converting your US Dollars into Pounds takes only a few minutes.
The rest of the time is governed by the speed of the international banking system (SWIFT). Some banks are also more efficient than others at clearing funds into accounts.
Things like daily cut-off times, weekends, public holidays and time zone differences can also cause a variance in the overall time taken.
If you have a tight timeframe, I would suggest sending your US Dollars in before the currency conversion as it can make the end-to-end transfer process a little bit faster.
The true costs explained
When you transfer money from the US to UK, there are two charges to look out for:
- Transfer Fees
- Exchange Rates
The US banks charge their customers a flat fee every time they do an international transfer.
These fees can go by different names, but in the US, they tend to be called ‘international wire fees’ or ‘international transaction fees’.
Here are the international wire fees charged by the four largest US banks:
|Bank of America||$45|
|JP Morgan Chase||$45 branch, $40 online|
At first glance, these fees don’t seem too high.
But they can add up if you are transferring money on a regular basis or need to send a larger amount over several tranches.
Some money transfer companies, such as ourselves, are happy to waive these fees altogether.
There are no standard exchange rates.
A bank or a money transfer company set their own exchange rates.
And the exchange rate tends to improve the more money you send.
Our research found that the exchange rate margin charged by the big four US banks ranged between 4% and 5.5%.
It’s hard to be any more specific because the US banks will adjust the rate depending on your exact amount.
But it stands to reason that the banks will find it difficult to compete with money transfer specialists.
Banks have operating costs that run into the billions. Therefore, it won’t come as a surprise that you can find better exchange rates from the money transfer specialists.
I would encourage you to carry out a cost comparison.
Because exchange rates change every few seconds, you should try and make your comparison at roughly the same time.
One other thing to note is that I’ve spoken to plenty of customers that have found the big banks difficult to deal with.
That has manifested itself in the form of unexpected fees, payment delays or over the top security checks.
As money transfer companies are focused on international payments, they are usually more efficient at getting the job done in a quick and painless way.
Beware of daily limits imposed by US banks
The big US banks tend to have a daily limit on the size of a bank transfer from the USA to UK.
The limits are not required by law.
JP Morgan Chase, for example, has a $100,000 daily limit.
Wells Fargo and Bank of America also have daily limits, but it’s based on your account history – so I can’t be more specific.
The daily limits can be a frustration for customers looking to send a large amount of US Dollars to the UK.
If you exceed the limit, it may mean you need to make several transfers – which could cost you extra fees and more time and hassle.
Money transfer companies don’t have daily limits, so offer a more convenient and flexible solution to send money from the USA to the UK.
How to choose a money transfer company
While there are plenty of money transfer companies, not all are trustworthy.
Things like longevity, customer reviews and awards can help bring confidence.
And regulation should be an absolute must for any money transfer company you do business with.
The rules are more complicated in the US because financial regulation is set state by state.
In the UK, a company is Authorised by the Financial Conduct Authority (FCA) – the UK’s financial regulator.
UK Authorised firms are required to keep client money in a separate, safeguarded bank account.
To find out if a UK-based money transfer company is Authorised by the FCA, you can search their name on the FCA register.
Why you can’t trust online exchange rates
If you track the USD to GBP exchange rate, you have probably come across websites offering free exchange rates feeds.
Some of the more popular sites are XE, Oanda or DailyFX.
But there’s a catch to these.
A lot of the exchange rates you see online are not actually available to customers.
If you look closely at these sites, you will find a disclaimer somewhere saying “consumer clients can’t access these rates” or the more generic “for information purposes only”.
That’s because the rates you are seeing are ‘interbank exchange rates’.
Interbank rates are used by banks to trade with other banks.
Not even large corporations or money transfer companies, buy and sell currencies at interbank rates.
If you want to budget effectively, then I suggest you get a genuine exchange rate from a bank or money transfer specialist.
How to achieve a better US Dollar to Pound rate
When you transfer money from the US to UK, the exchange rate is usually the critical factor.
Getting a better exchange rate comes down to two things:
- A competitive rate
- Optimal timing
A lot of people focus on the first part and overlook the second.
If you’ve watched live exchange rates, you will have noticed that they move every few seconds.
Price patterns in exchange rates are always changing.
You can see peaks and troughs, uptrends, downtrends and trading ranges.
As currency brokers, part of our job is to watch rates very closely. It’s a key part of what we do.
If you are sending money from the US to the UK, even tiny moves in the rate can make a big financial difference.
As an example; if you were planning to transfer $75,000 to the UK, an intraday move of just 1% in the USD/GBP exchange rate would make a $750.
Moves of that size can be a daily event.
Over the course of a week or month, the swings can be substantially more – sometimes as much as 5% if markets are volatile. That’s when bad timing can cost you thousands.
By understanding your requirements, we can work with you to achieve a better exchange rate.
It could simply be a case of alerting you when there’s been a favourable move.
Or we can let you know when the USD/GBP rate hits a specific level.
Banks and most other money transfer companies don’t offer a pro-active service like ours.
If you would rather speak to someone than download an app, you might find our service a better way to transfer money from the US to UK.
- To transfer money from the US to the UK, you can use a bank or a money transfer company.
- It normally takes 2-4 working days.
- Money transfer companies are normally cheaper and more efficient.
- Some money transfer companies also offer guidance on exchange rates as part of their service.
Who are we?
Key Currency is an independent money transfer specialist.
Our exchange rates are highly competitive. There are no additional fees or hidden charges.
As part of our service, we will assist you will the details of your transfer and work with you to achieve a better exchange rate.
That sets us apart from a lot of other money transfer specialists that are really just online platforms or apps.
As a business, we are open and transparent.
We don’t hide behind a logo or generic mission statement.
Finance is about trust.
The names, faces and backgrounds of all our team are shown on our website.
We have attained a 5-Star “excellent” rating on the customer review site Trustpilot; the highest rating possible.
In terms of regulation, we are an Authorised Payment Institution (Financial Services Register register No. 753989).
Money transfers are conducted through fully safeguarded accounts.
To compare us to your bank or existing provider, simply request a free quote below.