Transferring USD to a UK bank account is a common occurrence. It is not difficult to receive USD payments to a bank account in UK, and it can also be inexpensive. The most important thing to do is understand the process and the options available. You’ll first need to consider if you want the funds to remain in USD or you want to convert your money to GBP. If you want to keep hold of USD, you could opt to open a US dollar account in the UK. If you want to convert your funds to GBP, you can either use your bank or use a specialist service to handle the GBPSUD exchange.
One thing to note is that a US dollar payment to be sent to your GBP account may inccur high fees. If you do this, your receiving bank will convert the funds at a significantly worse rate than the current official rate. Below you can find an indicate diagram demonstrating that.
|Currencies||Official GBPEUR Exchange Rates||High Street Bank Exchange Rate (Estimated)||Recommended Provider Rate (Estimated)|
|USD to GBP||0.8160 GBP||0.7834 GBP to 0.7997 GBP||0.8078 GBP to 0.8119 GBP|
How to Save Money When Transferring USD to Your UK Bank Account?
Money transfer services offer better USDGBP than banks for international money transfers. A popular option includes currency brokers, a sub-set of service providers who don’t only offer better rates than banks but also a very holistic and tailored service. If you want to delve into the ins and outs of how to make transfers more cost effective view the below guide:
We also have guides focused specifically on the best way to transfer money from USA to UK. If you are keen on using your bank, you could also read about the best banks for international transfers and the best international bank account in UK here.
Can you Open a Dollar Account With Your Bank?
You’ll find that opening a dollar account with a UK bank is perfectly possible. The account will be held in the UK and have an IBAN format, allowing you to receive international bank transfers. It will not, however, have a routing number like USD accounts held in the US do.
Here is a list of banks where you can open a USD account in the UK:
|Bank||Fees (Sending Money)||Fees (Receiving Money)||Ongoing Fees?||Eligibility Requirements?|
Under £100: No fee
Over £100: £6 for receiving international transfers
|None||Must hold a GBP current account with bank.|
|HSBC||$7 for international transfers||$7 for receiving international transfers||None||Must hold a GBP current account with bank.|
|Lloyds||Free (£12 correspondent fee may apply)||Free for electronic transfers||£7.50 monthly fee||Must hold a GBP current account with bank.|
|NatWest||International Payment: 0.30% (min £23, max £40)|
Under £100: No fee
Over £100: £7.50 for receiving international transfers
|£8 monthly fee|
-Minimum deposit of £25,000 or salary of £40,000
|Santander||$40 for international transfers||Free for electronic transfers||None||Must hold a GBP current account with bank.|
Opening a dollar account with a UK bank can be done online and once up and running you will be able to manage your funds through your bank’s online banking platform and app. Just be aware that if you convert your USD to GBP with your bank, you’ll receive a bad exchange rate. As demonstrated by our international bank transfer fees analysis.
What about other major UK banks?
- Opening a dollar account with a UK bank is not always available.
- You cannot open a USD account with Nationwide.
- You cannot open a USD account as a personal customer with RBS.
If you have a dollar account, how does transferring money from abroad work?
If you’re set to receive dollars from an external source, simply provide the payee with the IBAN details of your USD account in the UK. Your IBAN will consist of 22 alphanumeric characters and will include details of your bank and USD account number. That’s all you should have to provide. After that, simply sit tight and wait for the money to hit your account.
If you’re transferring the money from an international bank account in your name, you’ll need to arrange your own international transfer. If you’re doing this with a bank, expect to pay a high payment fee. US banks charge between $40-$50 to process international USD wires as they are unable to make money on the currency exchange.
If you don’t have a dollar account, how does transferring money from abroad work?
When a currency exchange needs to occur, it becomes even more important to choose the right provider. The provider you choose will directly correlate to how much you have to pay in the foreign exchange markup, i.e. the difference between the actual exchange rate and the rate you’re offered.
These are your options to transfer USD to a GBP bank account.
Option 1: Your bank, as the receiving bank, converts the money on your behalf.
The absolute worst rate is applied when the receiving bank has to convert a foreign currency in order for it to credit your domestic bank account. If USD has been sent to your GBP account, your bank should contact you and provide you with two options:
- Convert and credit the money to your account. They usually do this with an FX markup of somewhere between 7-10%.
- Agree for the money to be sent back to the sender (less any handling fees of banks used to process the transfer).
Steer clear of option 1 to avoid unnecessary fees and unnecessary delays.
Option 2: The sender conducts the FX and sends GBP
If you’re receiving money from a third party, state how much you would like to receive in GBP and it will be the sender’s responsibility to cover the FX markup and any payment fees associated with the sender. This is a preferable scenario as you don’t necessarily need to consider the cheapest way to transfer dollars to a UK bank account, you simply provide the third party with your account details and the onus is on them to conduct the FX. It’s then their responsibility to determine the best way to transfer dollars to a UK bank account.
You may still lose a small amount ($5-$20) if your receiving bank or any intermediary banks take a handling fee for their role in processing the transfer.
If you are transferring dollars to a UK account as a sender then you’ll need to handle the currency exchange yourself. A bank like Wells Fargo applies a 3.5% currency exchange markup for USDGBP transfers. On average, a specialist money transfer company applies an FX markup between 0.5-2%.
For more information on this see our dedicated to transferring money from USA to UK.
Option 3: Work with a specialist FX company to receive USD and convert to GBP on your behalf
If you can’t arrange for the sender to conduct the FX then your best bet is to work with a reputable money transfer specialist. They apply the same low FX markup for receiving money from abroad too.
As long as one of the accounts in the bank transfer is in your name, you’re eligible to use a dedicated international payment company. Agree with the company the rate at which you want your money converted and then simply provide the sender with the USD details of the money transfer specialist. The money transfer company will then convert the USD into GBP and send it to your UK bank account.
If you’re receiving a large sum and are required to conduct the foreign exchange yourself, we recommend this as the best way to transfer dollars to a UK bank account.
Best Alternative to Accepting Dollar Payments to a UK Bank
There is one last alternative you can consider to transfer dollars to a UK bank account which is opening a digital multi currency account. These online-only accounts are specifically designed to make and receive electronic transfers and can’t be used to cash in cheques.
The digital USD account provided by Wise is physically held in the states, meaning you can make and receive local USD transfers, with no need to pay the increased costs that are associated with sending money internationally. You then have the option to either keep hold of your dollars or convert funds to a Wise GBP account held in London. An FX markup under 0.5% will be applied and as the money is staying within your own Wise accounts, no expensive international transfer fees are involved. You can then make a fee-free local GBP transfer to your bank. For smaller volumes, digital banks like Wise are usually the cheapest way to transfer dollars to a UK bank account.
We have created a list of the best USD accounts in UK here.