You can transfer Pounds to Dollars in 4 simple steps. I’ll show you how it works, how long it takes, the options you have and the best ways to lower your costs.
Transfer Pounds to Dollars (in 4 simple steps)
Transferring pounds to dollars and sending them to a US bank account can be explained in four steps.
Step 1: ID Check
A basic ID check is required for all new customers due to anti-money laundering regulations.
It’s generally a quick and easy process.
Step 2: Secure an exchange rate
To transfer Pounds to Dollars, you will be quoted a live GBP to USD rate.
The rate will change throughout the day.
Once you receive a quote, you can decide whether to go ahead or not.
Nothing will happen without your permission.
If you are happy to go ahead, the exchange rate is secured.
Shortly after, you will be emailed a transaction confirmation which will show the amount of Pounds exchanged into US Dollars.
Step 3: Pay for your money transfer
Before any money is exchanged, you need to send in your Pounds to pay for your money transfer.
The transaction confirmation will have the bank account details of where to you send your money. This is done via a normal bank transfer.
Step 4: Your Pounds are converted to Dollars and sent out
Once your pounds are received, they will be converted into dollars at the exchange rate agreed and sent to the US bank account you request.
How long does it take to transfer pounds to dollars?
It typically takes 2-3 working days to transfer pounds into dollars and send them to a US bank account.
The time can vary because some US banks are slower than others at clearing funds that have come in from abroad.
Money transfers to the USA also have daily cut-off times.
If you send your Pounds into your bank or money transfer specialist late in the afternoon, it could count as the next working day.
If you are worried about a tight deadline, the best thing to do is send your Pounds in early as it will speed up the end-to-end process.
What information you need:
You will need to provide the US bank details of where you want your dollars to be sent.
It doesn’t have to be an account in your name.
Here's the information you need:
- Name of recipient
- Account name
- Routing number
- Bank account number
For those unfamiliar, routing numbers are used in the US to identify the bank and location where your account was opened.
A routing number is 9-digits long.
They are also sometimes called ABAs or RTNs (banks love a bit of jargon).
You can find your routing number when you log in to your account or by looking at a monthly statement.
A money transfer specialist can assist you should you wish.
Bank or money transfer specialist – is there a difference?
The banks used to have the foreign exchange market to themselves.
Fortunately, that is no longer the case.
These days, money transfer specialists are a cost-effective and efficient alternative to using a bank.
As a general rule, banks can charge up to 4%-5% to transfer Pounds to Dollars.
Of course, it depends on the bank and the size of your money transfer.
There are two main reasons people use a money transfer specialist - the cost and the service.
The cost of transferring pounds to dollars is a combination of the exchange rate and international transfer fees.
1. International transfer fees
International transfer fees are the more visible cost.
The transfer fees charged by the big UK banks to transfer pounds to dollars vary.
Here is a summary:
- Santander: £25
- Lloyds: £9.50 plus £12 for the receiving bank
- Barclays: £0 (online-only) or £25 in branch
- HSBC: £4
- Natwest: £15 - £40 online or £23 - £40 in branch
The transfer fee is only part of the cost.
It’s almost like an ‘admin fee’.
For smaller transfers, they tend to be more of a factor in the overall cost.
If you are sending money to the USA on a regular basis or plan to send your money in several tranches, they can add up.
You need to be careful that the banks that charge the lowest transfer fees don’t then make up for it by charging you a bad exchange rate.
It’s the total cost that matters – so you are best to focus on the US dollars you will receive net of all fees.
By comparison, some money transfer companies charge similar amounts to the banks, while others charge no transfer fees at all.
At Key Currency, we don’t charge any transfer fees at all.
2. Exchange rates
There is no such thing as standard exchange rates.
Each bank or money transfer company will offer you a different exchange rate.
It is hard to compare exchange rates as they change minute-by-minute and are dependent on the size of your money transfer.
Generally speaking, the more money you transfer, the better the rate you will receive.
When you get an exchange rate quote from a money transfer company or bank, it will include a mark-up (or ‘spread’) on top of the wholesale rate.
In broad terms, we have found the rates offered by the big UK banks have a 4%-5% margin – depending on the size of your transfer.
A money transfer company has far lower overheads than a bank and can pass those savings onto customers.
It’s well worth your time comparing rates.
The cheapest way to transfer pounds to dollars will depend on your amount and the provider you choose.
Please be aware; the GBP/USD exchange rate is actively traded. It changes every 2-3 seconds.
If you request a quote from one provider and then a day or two later, request another quote from somewhere else, you may not be comparing apples with apples.
5 reasons you shouldn't use your bank
- It's not their area of expertise
- Their exchange rates are uncompetitive
- Banks charge you fees
- They won't help you with the timing of your transfer
- You are not their priority
Why you should be wary of exchange rates online
You have probably seen websites that show exchange rates online.
Some of the more popular sites are XE, DailyFX, FXStreet and Oanda.
But there's a catch.
A lot of people don’t know that the flashing rates you see are not commercially available to the public.
They are what’s called ‘interbank exchange rates’.
Interbank rates are used by banks and major financial institutions to exchange currencies between themselves.
Even large corporations and money transfer specialists cannot buy or sell currencies at interbank rates.
I appreciate that it is not made very clear – it’s usually tucked away somewhere in a disclaimer.
The words used tend to be something like "consumers cannot access these rates" or the old classic "for informational purposes only”.
If you want to get a real Pound to Dollar exchange rate that you can use to budget with; I would suggest you request a quote from an actual provider.
Is it safe to use a money transfer company?
Banks and money transfer specialists that are Authorised and Regulated by the Financial Conduct Authority (FCA) must adhere to the same rules regarding ‘segregation of client funds’.
What it means in plain English is that Authorised firms must hold your client money in a safeguarded account.
The reason that matters is it keeps client money completely separate from company money.
To find out if a company is Authorised and Regulated by the FCA, enter the company’s name on the FCA Services Register and click Search the Register.
How a money transfer service could help you achieve a better rate
You might think the service side doesn’t matter.
But there’s a lot more to a money transfer service that just being polite and professional.
For a start, a good service can lower your costs.
And if there is no service at all, it can cause customers a lot of stress and worry.
I’ve found in practice that the service side is often the most important factor for customers once they have actually been through the process of sending money abroad.
As you know, the exchange rate is probably going to be the essential ingredient in your cost.
But exchange rates are always on the move.
This can make it difficult for a customer to know the best time to exchange their pounds into dollars.
Even small, daily fluctuations in the currency markets could make a huge difference to the money you receive.
If for example, you were looking to transfer £90,000, only a 2 cent move against you in the US dollar exchange rate could cost you over £1,000.
If the Pound’s been having a bad run, or the Dollar has important news coming up, I would want to know.
I appreciate this isn’t most people’s field of expertise.
In fact, most customers have neither the time nor inclination to sit and watch exchange rates all day long.
But a money transfer specialist, such as ourselves, have dealers watching the moves in rates throughout the day, as well as keeping an eye on key technical levels, and live news feeds.
They can alert you to opportunities and risks, and even let you know when the rate moves in your favour.
Receiving guidance on exchange rates could help you achieve a better rate and reduce your costs.
It’s important to note there are many money transfer providers that are essentially online-only platforms.
They will suit some customers, but not others.
PayPal, TransferWise, CurrencyFair and Revolut, are some of the more popular "do-it-yourself" online providers.
Not everyone wants to download an app or tap a load of information into a computer.
For larger money transfers, a lot of customers want the peace of mind of having a person they can speak to and who will offer them assistance.
I have been there myself.
I’ve sent a large amount of money abroad several times.
I don’t mind booking a flight or hotel online – even then I get my wife to double-check everything.
But when it comes to sending a life-changing sum of money internationally, there was no way I was going to do that without speaking to a person.
I naturally wanted to know that the details were correct, that my Pounds to pay for the transfer had arrived safely, and when my money was converted and sent out.
All reasonable things that anyone would want to know.
The online experience can often fall short in terms of information and communication.
It’s a personal preference.
The best way to transfer pounds to dollars may come down to whether you want to transfer your money using an online platform or would rather speak to someone.
If you are looking to transfer pounds to dollars, you can use a bank or money transfer specialist.
For larger amounts, the differences in cost and service between providers can be substantial.
You should consider the overall cost, whether you are comfortable doing everything online or would prefer some guidance and support, and the reputation of the provider.
Hopefully, you are in a better position to make the right choice for you.
Who are we?
I am one of the Directors at Key Currency.
Key Currency is a UK-based money transfer specialist.
We offer you great rates and no fees on transfers.
What’s more, we don't push you onto a trading platform and make you do it all yourself.
All our customers are allocated an account manager who will look after you from start to finish.
We also actively help our customers to achieve the best rate possible.
As a company, we are open and transparent. We show the names, faces and backgrounds of all our people on our website.
Key Currency is an FCA regulated Authorised Payment Institution (No. 753989), and as such, all money transfers are conducted through safeguarded client accounts.
We have attained a 5-star “excellent” customer rating on the review website Trustpilot; the highest rating available.
To see how we compare to your bank or existing provider, simply request a free quote below.