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 clearly explain the process, how long it takes, what 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 an exchange rate
Once you are registered, you are in a position to lock-in an exchange rate if you wish.
Some people may register well ahead of the time they need to transfer money, so they can watch the rate for a while.
No transaction will take place without your consent.
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 to pay for your transfer
Your bank or money transfer service will provide you with the UK 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 money is converted to US Dollars and sent out
Once your Pounds arrive, your bank or money transfer service 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 the 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 the recipient details.
Here's the information you will need:
- Name of recipient
- Account name
- Routing number
- Bank account number
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).
Your 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 registering with a money transfer service is a quick process.
Once that bits done, it opens you up to a world of competitive rates.
I personally don't think the banks compete very hard to win your business.
They are mainly focused on savings and mortgage products, not international money transfers.
That's why the staff in a branch have minimal training or knowledge on foreign exchange.
From my own experience, I've found the banks make you do most of the work.
Beyond the administrative and service side, the biggest drawback of using a bank is usually the cost.
Banks are notorious for uncompetitive exchange rates and charging an assortment of fees.
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.
The transfer fees vary depending on the bank.
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) and 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.
Be aware that some of the banks charge you two transfer fees - one for sending the money and one for receiving the money.
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 fees and exchange rates.
If you know how much you want to send, it's best to make a direct comparison with your bank.
To keep things simple, just focus on how many US Dollars you will receive for the amount of Pounds you intend to send.
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?
I always like to know who I'm doing business with, particularly if it involves a large amount of my money.
Before choosing a money transfer service, I would suggest reading their customer reviews, seeing where the company is based, and finding out if it's regulated.
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 the exchange rates you see online are not what they seem.
What you are seeing online are something called 'interbank rates'. They are not customer rates.
As the name suggests, interbank rates are used by banks to trade between themselves.
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”.
Comparison sites are also another popular source of exchange rate information.
However, I've also found that the rates shown on comparison sites are dubious.
While I appreciate comparison sites give you a shortlist of companies to consider, they are not exactly an independent source of information.
Comparison sites are commercial operations. They list companies they have struck deals with.
The rates I've seen quoted on comparison sites are non-binding, which makes me think they are basically ‘teaser rates’ to get the click.
They also quote you on weekends and public holidays, when the currency markets aren't even open.
That indicates to me that the rates aren't real.
An alternative is to get an exchange rate direct from a bank or money transfer service 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, when you do the maths, even tiny moves in the rate can make a big 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 £500.
The exchange rate can move that much in a single day.
Over weeks and months, it can move considerably more.
It's why timing can often be the most significant factor in the true cost of your transfer.
While banks and online-only platforms won't help you with the rate, some money transfer companies will provide you with guidance on timing as part of their service.
A money transfer specialist can monitor the market for you and let you know when the rate moves in your favour.
Online-only operators such as PayPal, TransferWise, Western Union and Revolut are some of the better known "do-it-yourself" services.
They are particularly popular for smaller amounts (under £5,000), but the support you get as a customer is minimal.
For larger amounts, many customers want the peace of mind of having a real person to speak to.
I know when I was looking to transfer a large sum abroad, I was scared I might input something wrong or completely mess up the timing of my transfer.
I wanted someone else to take the reins and tell me what I needed to do and when.
Personally speaking, I also hate (with a passion) call centres and 'webchats'. Give me a one-to-one service any day.
It comes down to your personal preference.
The best way to transfer money from the UK to the USA will depend on whether you are comfortable doing everything online or 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.
At Key Currency, we help individuals and businesses get a better deal on sending money to the USA.
We’re committed to providing a service of the highest integrity and safety.
From a regulatory perspective, Key Currency is an Authorised Payment Institution (Financial Services Register No. 753989). All money transfers are conducted through fully safeguarded accounts.
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 genuinely endeavour to do a great job for our customers and have a 5-Star "Excellent" customer rating on Trustpilot based on over 600 reviews.
The cost of our service is included within the exchange rate we quote. There are no additional fees or charges to worry about.
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