Money Transfer UK to USA

5 Things Before You Send a Penny

Today I will show you the best way to cheaply, quickly and safely transfer your money to the USA.

Money Transfers UK to USAThere are literally 100s of services in the UK that say they can transfer your funds from the UK to the US.

The Reality Is;

  • Some services are cheaper for smaller amounts, some cheaper for large amounts
  • Some attract hidden fees while others proactively minimise them
  • Some are focused on online transactions while others provide telephone support if you need it (and you may need it).

The best service for you needs can be determined simply by following;

Jump Links

  1. The Amounts you are sending
  2. In the UK or the US?
  3. How You Will Fund the Transaction. (eg. Bank account or card)
  4. Bank Fees (+ Hidden)
  5. Rate Guarantees

Also see UK to the rest of the World

1. The Amounts

Some companies are designed for smaller amounts and some companies are designed for larger amounts.

Money Transfers Peer to PeerIn general, Peer to Peer (P2P) companies (wikipedia) are extremely cheap and very effective at moving smaller amounts.

There are a few reasons for this, but the biggest is that they work by pooling GBP and USD and swapping these amounts.

In effect they don’t transfer your money at all, they just swap your money, which means they can pass the savings on to you.

This works extremely well until the amounts rise to certain point where they use banks to assist them.

Non-P2P money transfer companies also pool and swap your money to some extent, but the big difference is that their cost structure. This enables them to become more competitive as the amounts increase.

This means the percentage they add to the exchange rate reduces, while the P2P companies can often need to increase the percentage costs as they start needing to actually move money.

P2P or non-P2PEffect on % of Fees as Amounts IncreaseSign UpTelephone or Phone Service
P2PIncreaseEasy initially for smaller amountsTend to focus on online
non-P2PDecreaseCan immediately send larger amountsBoth

Other Important Factors

P2P services are designed from the outset to be great for smaller amounts (Approx. less than £4000/ $7000 USD) and as part of this they also made it easy as possible to sign up quite easily when the amounts are lower.

However as the amounts get to certain thresholds they can tend to ask for more ID and other information in order to meet regulatory requirements.

Unfortunately for a small minority this can mean you start out using them just fine, then if you increase the amounts you send you may find that they freeze your account because until they get more ID or information to satisfy regulatory needs. (We discovered this my reading and analysing hundreds of negative reviews mostly on Trustpilot, although we must say this is a small minority.)

Conversely because the non-P2P services started out just competing with the banks they expected to move larger sums. As a result they tend to get all the compliance stuff out of the way up front. This means it can be harder to sign up initially, but there is less chance of there being any hiccups when transacting.

Another potential advantage of using a non-P2P services is that they often have “dealers” or “account managers” actually in the US and the UK. For larger amounts this can be a huge advantage because each bank in each country is different when it comes to how the funds can be sent and also the daily limits and fees they charge. We have found from personal experience that being able to get information on this can save a lot of time, stress and even some bank fees.

P2P services on the other hand tend to more online focused with less physical presence which for smaller amounts is perfect – keeping costs low and with less need for one-to-one assistance anyway.

Here is a video we made you might also find helpful;

Two of the biggest P2P providers are compared here –  CurrencyFair V TransferWise

Leading services like OFX are often the cheapest and best ways to send money internationally for amounts more than £4000.

2. In the UK or the US?

Your residency – UK or USA makes a very big difference.

If you are in the UK where the Financial Conduct Authority (FCA) regulates money transfer companies – everything is pretty straight forward. Skip to the next section

However if you are in the US, the money transfer company you want to use needs to be registered with the Financial Crimes Enforcement Network (FinCEN) as a money service business as well as licensed as a money transmitter in the state where you reside.

Due to this only a handful of companies can actually help you if you are in the US. Fortunately they are very good and we have included the best and biggest in our comparison chart below.

3. How You Will Fund the Transaction

All money transfer services allow bank transfers, and these tend to be cheap especially if the money transfer service operates a local bank account in the USA and the UK. (more about Bank Account Networks in the next section)

There are two possible downsides when it comes to bank transfers. They tend to be the slowest way and not all money transfer company services not guarantee rates which can be a big problem which we talk about below.

4. Bank Account Networks (+ Hidden Fees)

If your money transfer service has a local bank account in the UK and the US generally your bank will not tend to charge you any often unexpected fees.

Fees can range from £15 to $50 and be charged at both ends and are usually hidden in the fee structures of the banks you use.

In addition to these fees, banks can often also add on fees depending on the method you use to fund the transaction.

5. Rates Guarantees

Some money transfer services only lock-in the exchange rate after they have your funds. The flip side of this is that this removes a lot of risk from their business and so they may offer even better exchange rates.

Others will guarantee the rate they offer you for 24 or 48 hours which means you can have the money sitting in your bank account possibly earning a small amount of interest and wait for a favourable time or exchange rate.

Quick Comparison Table

Service NameP2P or Non P2PTotal Fees Cost RangeWays to Fund TransactionsLocal Bank AccountsRates GuaranteesTop Choice (our opinion only)
BankNA3% to 7%NANoNAEnriching bankers 🙂
TransferWise
Best Money Transfer Company Below $7000
P2P0.5% to 1.5% as amounts increaseBank, Credit and Debit CardsUSA and UK24 or 48 hrsSmaller amounts where Rate Guarantee matters
CurrencyFairP2P0.3% to 1.5% as amounts increaseBankUKNoSmaller amounts where Rate Guarantee does not matter
OFX
Best Money Transfers Above $7000
Non2.0% to 0.5% as amounts increaseBankUSA and UKYesLarger amounts with great support both sides of the pond.
XENon2.0% to 0.5% as amounts increaseBank??Larger amounts with online focus.

Top Services Summaries

TransferWise

In our review, we found TransferWise to be an excellent way to transfer money from the UK to the US.

Based in the UK, it is also registered with most states in the US (not Nevada and Hawaii) so transferring money in either direction is made possible.

They use the the mid-market rate which typically banks and other providers do (this can be a hidden cost that we try hard to make everyone aware of) which is often the largest fee.

Instead they charge a competitive and very transparent fee which you can see before you commit to anything. 

It’s easy to sign up and fantastic in its simplicity with guaranteed rates you lock in for 24 or 48 hrs.

Although there is an additional fee, they also support Visa, MasterCard and some Maestro cards that have a 16 digit card number. Your card must have also been issued in the UK to send money from the UK.

However, it is focused being great online and more of a self-service option, so if you like speaking to a human especially before you signup or want to transfer larger amounts, non-P2P services may be better. However they do have an extensive FAQ and you do have the ability to call TransferWise customer support if ever you need.

CurrencyFair

In our review for CurrencyFair we found that CurrencyFair (especially with its first transfer free) is a dissevered leader in world of money transfers.

As a P2P provider the exchange rates and fees are extremely competitive. To achieve some of the best exchange rates in the business they require funds up front.

Payments to CurrencyFair are limited to bank account transfers for UK residents.

While they support transfers from the UK to the US, they do not support residents of the USA which may be a consideration.

OFX

Our review of OFX (and from personal use) show that for larger amounts, OFX is hard to beat because of its inexpensive cost structure, mix of telephone and online services.

After you have signed up they have a solid online platform with knowledgeable staff in North America and the UK which means they can step you through every aspect (if required) including your dealings with banks.

While they do sometimes charge a $15 fee, these fees are free for the UK, the USA and indeed anywhere in the world if use the link.

XE

In our review of XE, we found they are an efficient, secure and inexpensive way to transfer funds abroad.

There is no transfer fee, but like others the company does charge a small margin on the exchange rate. The key is to make sure the rate you get is competitive which you can get after you login.

They have a wide coverage across the globe. For smaller amounts (less than $7000 USD) they may not be your best choice, especially if you are happy to do everything online. For larger amounts they are great choice particularly if you are in North America with their network to back you up.

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