Please advise on bringing funds from US to UK ?

Hiya'll.

Thanks for all your support )

Wife and i will be making the plunge to London in less than 4 days...We are a bit confused as to the best way to bring our funds to the UK . We are planning on taking 10K with us but should we take a bank draft IN U.S. DOLLARS to later convert into sterling pounds and deposit in a UK bank on our arrival...OR should we get a bank draft from a U.S. bank here in UK STERLING POUNDS and deposit that bank draft straight into an account once in the UK.

We are trying to figure out if we would save any money i.e. exchanging US dollars into UK Sterling Pounds once in the  UK . Or taking a bank draft in Pounds Sterling from the U.S.
Does it make a difference in terms of saving some money doing it one way or the other ?

I tried to talk to my Wells Fargo Foriegn Currency department and they told me that for example for USD 10K they would exchange it to Sterling 5,298.57 plus a service fee of $15.00. Wells current exchange rate (i.e. todays rate that is ) 1.8873%

So i am not sure if we can do better if by exchanging USD at a local bank in the UK.
Sorry to ramble or if i sound confusing...

thanks in advance
Zufan

My vote is for getting a draft in sterling while you are still in the US.
Because if you go to open an account here, and try to pay in a draft in dollars, it could take several weeks to clear, and you'd be sat there with no money until it clears.

Do you already have a bank account set up in the UK?   My bank told me to transfer the money as there would be a considerable wait for a check to clear, regardless of the type.

thanks for the prompt response.

I dont yet have a bank account in the U.K. I am still in the states . Besides the wait time involved with depositing a bank draft in the UK , do any of you see any advantage or disadvantage from getting my U.S. bank draft in sterling or USD ?

I  could use our Wells ATM card till we set up a bank account in the UK but i'm still not sure wether or not i should get the U.S. bank draft in Sterling or USD.

thanks so much
Kerubel

My husband works for Barclays Bank and he says that you will get your funds much quicker if the draft is in sterling, drawn on London (meaning it's to be paid in London versus some place in the US).

Also, if you have no UK bank account, you may find that it could take a bit of time to open an account.  You'll need a passport and confirmation of address which is usually obtained from your overseas bankers (so don't close your US account).  The UK bank will contact your US bank confirming your US address and UK address.

Hope this helps.

Thanks Caitlinn for your prompt response and advice.

Just wanted to ask you what exactly you meant when you advice the bank draft  " to be drawn on london " , can i get a bank draft stating that the funds are to be drawn in london ?.

thanks again
Zufan

Here's the advice per hubby because quite frankly I had never heard of 'drawn on London' either (and I used to work in a US bank):

The check should be denominated in sterling, meaning when you pay it in in the UK, you get face value of the draft.  The drawn on London bit means that the UK bank (the one where you deposit the check) will be sending the draft to the London correspondent bank for payment rather than physically sending the draft to the US for payment.  This is why you will get paid quicker.

Most UK banks have a correspondent US bank (like a partner bank).  So Wells Fargo might have a partnership with, for example, HSBC (a UK Bank).  If your check is drawn on London, then the check would go to HSBC to clear, rather than going back to Wells Fargo in the US to clear.

Hubby says if you tell your banker this, they should understand it.

Thanks everyone for the heads up..

Caitlinn i think your advice is very sound, i will look into Well's sister bank in the U.K. and get a bank draft drawn up on a london bank . I didnt think about the marathon wait involved with trying to cash the bank draft, especially if i had to bring it in USD.

Wells Fargo will charge me 1.8873% for the currency exchange and a $15.00 flat rate fee so for $10,000 USD i will be getting around Sterling 5,298.57 .

I think this is the best i can do .
thanks again
Zufan

When I moved to the UK I didn't have a bank account and I had a cashiers check for deposit. It took nearly four weeks of faffing about to finally get a banck to believe who I was and set up an account for me. I had to live on US credit cards until then. I hope you have a contingency plan in case you run into a snag with your bank situation.

You might want to first shop around a bit in terms of what FX translation rate you'd get. The rate you're getting is simply predicated on the current avg. pound sterling to dollar conversion rate, for example, they perhaps have a formula which will say "market rate plus 3%"...that's how they get the majority of their fee. As of this morning the avg. rate is around $1.832 USD per 1 pound.

Also, generally banks won't freeze the rate they'll give you...If you call them today the offer will probably be different, and often the ending rate you get isn't finalized until the actual settlement occurs (i.e., the funds change hands), since FX rates float continuously like stock prices.

Cheers,

The Sun King

thanks everyone for your great advice.

Yes i do realize FX rates fluxtuate daily, but your right, the fee's each bank charges for the conversion is fixed and i will shop around and see who offers the lowest rates...If anyone can recommend a bank i should be looking into for better rates please let me know.

thanks so much
Zufan

Hello Zufan,

While you are still in the US (I assume Calif since you have Wells Fargo) I would open an account with Citizens Bank. They were just bought out by Royal Bank of Scotland and that could help you transfer funds quicker. You can use your ATM card of course but I believe ther is a $300 limit a day which is about £150 and there will be a $3-5 charge for each transaction. Just something to think about.