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Whether you have a property, family or business interests in the US, if you want to transfer money from the UK across the Atlantic, you’ll need to find the best way to do it.
It might be tempting to go straight to your bank – but there are quicker and cheaper options for currency transfers.
Before sending money to the US, look at whether a currency broker or multi-currency account might be your best bet. While using PayPal, Western Union or Moneygram might be convenient, these options can be expensive.
Is the pound strong against the dollar?
At the moment £1 is worth around US$1.20. But it used to be worth a lot more. £1 was worth over $2 around the time of the global financial crisis in 2007-09.
Once the crisis started to settle, £1 was typically worth about $1.40 to $1.45. Other major currencies were weak against the dollar in the same time period.
For the next few years, GBP/USD fluctuated between roughly $1.40 and $1.70. But then the Brexit vote happened in June 2016 and Sterling lost a lot of strength against the dollar, falling to about $1.20 overnight.
Then in September 2022 – following the controversial Mini-Budget under former Prime Minister, Liz Truss and her then Chancellor, Kwazi Kwarteng – the pound plummeted to just below $1.07, within a whisker of its all-time low of $1.05.
It has since climbed back to more recent norms of around $1.20.
You can find out how many dollars your sterling will buy in real time with our dedicated currency converter.
A weak pound versus the dollar means the purchasing power of the pounds is reduced. For example, as oil is priced in dollars a weak pound can make petrol more expensive.
It is also more expensive for Brits to holiday in the US or buy US exports.
How to compare GBP to USD transfers
Foreign exchange (FX) providers, banks and currency brokers often advertise ‘no fees’ or ‘no commission’ – but you shouldn’t fall for this marketing gimmick. These providers often make their money by offering uncompetitive exchange rates.
When it comes to GBP to USD transfers, the big question is: “After all the fees, how many US dollars will I get for X pounds?” This is the figure you need to use to compare deals.
The same USD is used throughout the US, so it doesn’t matter which state or city you are sending the money to or travelling to. It won’t cost you more to send money to Hawaii than New York, for example.
How much money are you sending to the US?
Some money transfer services state a minimum transaction amount. So, if you only want to send £20 to a friend in the US, you’ll have less choice of providers than if you wanted to buy a holiday home in Florida.
There is not usually an upper limit, but there might be extra checks if you send a large amount of cash.
Is your money safe?
If you use your UK bank or building society to move your money to the US it will be protected by the Financial Services Compensation Scheme (FSCS).
Using a FX or currency broker offers less reassurance, and you may be less protected if things go wrong. Currency brokers can be ‘authorised’ by the Financial Conduct Authority (FCA) or just ‘registered’.
Authorised firms are obliged to keep clients’ money separate from the company’s own funds – this will protect you if the firm goes bust. But with a company that’s just on the FCA register, your cash could theoretically be lost if the company went into administration.
So, it’s best to use an FCA authorised FX firm, rather than one that is just registered.
Do you need a quick transfer?
How quickly you need the money to arrive in the US will influence the service you choose. ‘Same day’ or ‘next day’ services cost more than those that deliver the money in a few days.
What is a currency forward contract?
If you’re planning an investment in the US, you can plan ahead by using a ‘forward contract’ where you fix an exchange rate now but arrange the transfer for a future date. This can be a good option if you think GBP may strengthen against USD in the future.
For example, if you’re buying a property in the US, a foreign exchange (FX) forward contract allows you to fix the property price based on the exchange rate at the time you saw it.
By the time the sale completes, the exchange rate may have fluctuated, but the price you pay is locked in by the forward contract. This could save you a lot of money if the dollar strengthens against the pound.
If the pound strengthens, while you may have technically ‘lost money’, you will have been able to budget for the purchase in GBP and will pay the amount of pounds agreed in the contract.
Ways to send money to the US
Your bank account: Sending money to the US using your UK bank account is easy and convenient, as well as safe. You’ll normally be able to complete the transaction online.
However, using your bank will usually mean paying a fee, and also a poor exchange rate. This means you’ll get less US dollars for your pounds than you might be able to get elsewhere.
The one scenario where using your bank might be a good option is if you have an account with a UK bank that has branches in the US too, such as HSBC or Citibank.
For example, HSBC doesn’t charge fees if you send money from a UK HSBC account to a US HSBC account, while Citibank Global Transfers allows you to transfer money from a Citibank UK account to a Citibank US account.
A multi-currency account: Most major banks, such as Barclays, Natwest, Lloyds and HSBC, offer foreign currency or multi-current accounts, generally for the world’s most used currencies which include both GBP and USD. They allow you to hold money in several currencies at the same time and manage payments in a foreign currency instead of opening a new bank account overseas.
However, most multi-currency accounts tend to be aimed at high net worth individuals or business customers, so not everyone will be eligible.
Digital banks: Both Wise (formerly Transferwise) and Revolut offer quick, cheap transfers and are generally a solid choice for international money transfers.
Technically, these challenger banks offer multi-currency accounts similar to those offered by banks. But these products are for everyone, not just the super-rich.
The debit cards that come with Wise and Revolut accounts are generally a good option for using in the US too.
With Wise you can have both UK bank details and a US routing number and account details. Wise gives users local bank details in 10 currencies, allows you to hold and convert 49 currencies, and use money in 175 countries.
It offers low-cost money transfers using the ‘real’ or mid-market rate, plus a small fee. How much you will pay depends on the country you are in, the currency you are sending and the currency it will arrive in.
Revolt allows you to exchange money instantly in 29 currencies, and offers transparent FX prices, as well as free transfers between Revolut users.
Starling Bank is another good option for money transfers to the US. It uses the ‘real’ exchange rate and charges a flat fee of 0.4%.You can pay an extra £5.50 for ‘priority’ SWIFT delivery.
Currency broker: A currency broker or specialist FX company is usually best for large transactions such as buying a home abroad. There are loads to choose from including HiFX, Moneycorp, TorFX, IG, Capital.com, City Index and Pepperstone.
Brokers usually advertise ‘bank beating’ rates (this tends to be true) or ‘no transfer fees’, but the big question is how they compare against one another. To find out, you can either use a FX comparison site or obtain quotes from each company.
Once you choose a broker, you’ll need to open an account. You can carry out the transaction online using a debit card, credit card or bank transfer, and you’ll need the US recipient’s details too.
On the high street: Services such as Moneygram and Western Union have their advantages – but they are not a cheap way to send money from the UK to the US.
These services are handy if you need to pay in cash or if you’re sending money to someone in the US who doesn’t have a bank account – they can pick up the cash in as little as a few minutes in shops. Moneygram also has outlets in Walmart stores.
They can both be a good option, for example, if your child is backpacking and loses their backpack, as you can send them cash quickly.
Both Moneygram and Western Union have a huge network of physical premises in the US, including relatively remote locations. There are more than 17,300 Moneygram branches in the States and more than 42,000 Western Union locations.
However, fees for Western Union or Moneygram can be very high, exchange rates uncompetitive, and maximum limits low.
PayPal: PayPal is an easy option if both you and the recipient in the US both have a PayPal account. But PayPal is an expensive way to send money abroad as, unfortunately, the foreign conversion fees tend to be among the worst out there.
