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How to transfer GBP to a "Pound Sterling" account in US?

How to transfer GBP to a "Pound Sterling" account in US?

Old Jul 12th 2013, 5:13 am
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Default How to transfer GBP to a "Pound Sterling" account in US?

hi guys, i have a question regarding money transfer.

my circumstance is rather different, i have a foreign currency account (British Pound Sterling) in US. I want to transfer my money from HSBC in UK to the GB account obviously without converting. What's the best way to do it?

I haven't asked HSBC about the fee for international wire but I assume it wont be cheap. I also looked into XE trade and I don't think they'll be any help coz their business is based on converting different currencies.
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Old Jul 12th 2013, 9:07 am
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Default Re: How to transfer GBP to a "Pound Sterling" account in US?

Is your US account an HSBC account? You can 'link' them together and if you are a Premier customer moving money between them is free. There is a slight fee if you are not Premier.
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Old Jul 12th 2013, 10:47 am
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Default Re: How to transfer GBP to a "Pound Sterling" account in US?

That is a very unusual request and I suspect that what you want isn't possible. I am not aware of any US bank that offers a GBP (£) account in the US, however I do know that several of the largest banks in the US do not. If such a thing is possible (which I doubt) it's either going to be a small merchant or private bank with a very high minimum deposit requirement (perhaps $1million), or a British owned bank, which narrows it down a choice of two: HSBC or RBS Citizens, and I am already 95% certain that HSBC doesn't offer GBP accounts in the US.

Citibank offers GBP accounts, but they are offshore (with respect to the US).

Until 2011 US banks were not permitted to pay interest on non-USD accounts in the US, therefore foreign currency accounts were unattractive, and simply not offered to custoners. Instead US banks have historically offered off-shore foreign currency accounts, typically in the Cayman Islands, but that is a niche market for wealthy individuals.

Can I ask what you are trying to achieve? Because if you just want your money out of the UK, an account in Jersey, Gibraltar, or some other off-shore location may be the way you achieve your goal.

Last edited by Pulaski; Jul 12th 2013 at 12:20 pm.
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Old Jul 12th 2013, 3:52 pm
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Default Re: How to transfer GBP to a "Pound Sterling" account in US?

Your research is absolutely accurate. I had no luck on finding a bank that offers foreign currency account since I moved to US in 2005. However, just recently I discovered a local bank called "Union bank" which offers foreign currency account! I was really surprised!

https://www.unionbank.com/commercial...y-accounts.jsp

Union bank is not an online bank and it's pretty big in California with lots of branch locations.

as to my intention on the transfer, I have quite a big amount of pounds sitting in HSBC fixed rate deposit (~2% gross interest) and I am not planning on converting them into USD any time soon. But I do want to move the money to US one day coz I dont live in UK anymore.

I am still debating though. I know foreign currency account would yield little or no interest here in US. on the other hand, I feel safer to move the money to a bank in US where I can physically visit. Honestly, sooner or later I will have to do it - it's just a matter of time.

Any advice on moving the money is appreciated!

Originally Posted by Pulaski View Post
That is a very unusual request and I suspect that what you want isn't possible. I am not aware of any US bank that offers a GBP (£) account in the US, however I do know that several of the largest banks in the US do not. If such a thing is possible (which I doubt) it's either going to be a small merchant or private bank with a very high minimum deposit requirement (perhaps $1million), or a British owned bank, which narrows it down a choice of two: HSBC or RBS Citizens, and I am already 95% certain that HSBC doesn't offer GBP accounts in the US.

Citibank offers GBP accounts, but they are offshore (with respect to the US).

Until 2011 US banks were not permitted to pay interest on non-USD accounts in the US, therefore foreign currency accounts were unattractive, and simply not offered to custoners. Instead US banks have historically offered off-shore foreign currency accounts, typically in the Cayman Islands, but that is a niche market for wealthy individuals.

Can I ask what you are trying to achieve? Because if you just want your money out of the UK, an account in Jersey, Gibraltar, or some other off-shore location may be the way you achieve your goal.
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Old Jul 12th 2013, 4:02 pm
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Default Re: How to transfer GBP to a "Pound Sterling" account in US?

Originally Posted by penguinsix View Post
Is your US account an HSBC account? You can 'link' them together and if you are a Premier customer moving money between them is free. There is a slight fee if you are not Premier.
My bank in US is bank of america.
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Old Jul 12th 2013, 5:05 pm
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Default Re: How to transfer GBP to a "Pound Sterling" account in US?

Originally Posted by nvidiot View Post
as to my intention on the transfer, I have quite a big amount of pounds sitting in HSBC fixed rate deposit (~2% gross interest) and I am not planning on converting them into USD any time soon. But I do want to move the money to US one day coz I dont live in UK anymore.

I am still debating though. I know foreign currency account would yield little or no interest here in US. on the other hand, I feel safer to move the money to a bank in US where I can physically visit. Honestly, sooner or later I will have to do it - it's just a matter of time.

Any advice on moving the money is appreciated!
2%!!! Leave it where it is! You won't get that sort of deposit return in the US unless you want to play on the stock market.

Realistically, unless Union Bank can accept a check drawn on a UK bank (for a fee) I would say wire transfer but you'll just have to suck it up and pay your banks fees to do so.

Originally Posted by nvidiot View Post
My bank in US is bank of america.
My condolences.
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Old Jul 12th 2013, 5:09 pm
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Default Re: How to transfer GBP to a "Pound Sterling" account in US?

Originally Posted by nvidiot View Post
Your research is absolutely accurate. I had no luck on finding a bank that offers foreign currency account since I moved to US in 2005. However, just recently I discovered a local bank called "Union bank" which offers foreign currency account! I was really surprised!

https://www.unionbank.com/commercial...y-accounts.jsp

Union bank is not an online bank and it's pretty big in California with lots of branch locations.

as to my intention on the transfer, I have quite a big amount of ounds sitting in HSBC fixed rate deposit (~2% gross interest) and I am not planning on converting them into USD any time soon. But I do want to move the money to US one day coz I dont live in UK anymore.

I am still debating though. I know foreign currency account would yield little or no interest here in US. on the other hand, I feel safer to move the money to a bank in US where I can physically visit. Honestly, sooner or later I will have to do it - it's just a matter of time.

Any advice on moving the money is appreciated!
Well Union Bank (of California, until 2008) is owned by a Japanese bank, so has a more international perspective than most US banks, so I am not entirely surprised that it might offer foreign currency accounts.

FWIW Given the current move forwards in the US economy and the continued shakiness of the British economy, you should seriously consider moving out of GBP and into USD, especially if your long term or permanent home is in the US. Of course FX rates are notoriously volatile, but I saw a report just last week predicting a multi-year period of the dollar strengthening, which would translate directly into a relative loss of value for your GBP deposits.

Last edited by Pulaski; Jul 12th 2013 at 5:12 pm.
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Old Jul 12th 2013, 5:16 pm
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Default Re: How to transfer GBP to a "Pound Sterling" account in US?

thank u all for your advice
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Old Jul 12th 2013, 5:20 pm
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Default Re: How to transfer GBP to a "Pound Sterling" account in US?

Originally Posted by Pulaski View Post
Well Union Bank (of California, until 2008) is owned by a Japanese bank, so has a more international perspective than most US banks, so I am not entirely surprised that it might offer foreign currency accounts.

FWIW Given the current move forwards in the US economy and the continued shakiness of the British economy, you should seriously consider moving out of GBP and into USD, especially if your long term or permanent home is in the US. Of course FX rates are notoriously volatile, but I saw a report just last week predicting a multi-year period of the dollar strengthening, which would translate directly into a relative loss of value for your GBP deposits.
I suspect US banks don't want the hassle since that could possibly be considered as "currency trading" by the IRS whenever any money is withdrawn and the bank would have to report gains and losses in the currency trade. Prior to FATCA, foreign banks didn't have to do any reporting so it may even become more difficult to find overseas banks that are willing to hold money in a foreign currency for US citizens and residents.
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Old Jul 12th 2013, 5:42 pm
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Default Re: How to transfer GBP to a "Pound Sterling" account in US?

Have you looked into any of the share trading sites? I used to have Etrade UK and Etrade US and could transfer between the 2 for free. When the UK side closed down, I transferred all to the us side and still hold GBP in there, (paying the princely sum of 0.249%!!!!). Etrade UK closed, but some of the others may still have operations both sides that would enable you to do what you want to, if they will let you open a UK based account as a nonresident.
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Old Jul 12th 2013, 6:04 pm
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Default Re: How to transfer GBP to a "Pound Sterling" account in US?

Originally Posted by sir_eccles View Post
2%!!! Leave it where it is! You won't get that sort of deposit return in the US unless you want to play on the stock market.

Realistically, unless Union Bank can accept a check drawn on a UK bank (for a fee) I would say wire transfer but you'll just have to suck it up and pay your banks fees to do so.



My condolences.
Even 2% makes me cry. For a relatively safe high return, I put much of my excess cash in solid large bank high yielding (6%-8%) preferred shares such as Barclays, JP Morgan, BOA, Deutsche Bank, Wells Fargo, etc..

The risk is that the bank becomes insolvent (not too likely with large banks), the security can be called, and the price of the shares move up and down on a daily basis.

To reduce the risk that the share can be called, I usually purchase shares that are below par value or purchase shares that are above par value but have a quarterly dividend that will be paid that will at least cover the cost of the call at par value.

As an example, ING has shares (ISF) selling for $23.80 with a par value of $25 so if it is called, I get $25 per share plus dividends currently yielding 6.70%. BOA has BML-I at $24.83 with a par value of par value of $25 currently yielding 6.42%. I also own some Wells Fargo shares (WFC-L) at below par value which can't be called so I continue to hold those even though they are significantly above par value. I've also recently purchased Barclays (BCS-D) with a coupon rate of 8.125% at $25.07 but if it is called, the quarterly dividend of $0.51 per share will return $0.44 per share this quarter if called. Deutsche Bank (DXB) is kind of confusing since the earliest call date is not until 2017 with a coupon rate of 6.55% and normally those go for quite a premium but they were at $25.05 yesterday so I bought them. The only thing that is confusing is that the call date has a "?" after it although the prospectus indicates that the call date is 2017. So I'm not sure if the call date is 2017 but even if it is called earlier than that, I'll still make money on it.

Even though most of the large banks preferred shares are classified as junk or near junk, even Citi and RBS only suspended dividend payments on some of the preferred shares for two years (maximum allowed unless the bank becomes insolvent). Preferred shares are senior to common shares but are junior to bonds.

One of the big advantages of preferred shares is that tax treatment on dividends are normally qualified for a maximum tax rate of 15% (22% if total income is above $400,000).

http://www.quantumonline.com/

If you believe those banks will go bankrupt or that interest rates will skyrocket, then don't purchase those shares. However speculators get nervous when minor things happen and drive down the shares but that is a good time to buy. As an example, recently 30 year treasuries increased in yield by about 1% and speculators started dumping the shares so I jumped in and the shares have already significantly recovered.

Last edited by Michael; Jul 12th 2013 at 6:39 pm.
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Old Jul 12th 2013, 6:37 pm
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Default Re: How to transfer GBP to a "Pound Sterling" account in US?

michael, thanks for such useful tip on managing excess cash. I'd definitely take the information on board and look into " high yielding (6%-8%) preferred shares". Maybe this is how I will invest my excess cash from UK.

I should've changed all my pounds to USD back in 2005 when I first moved to the states. I am looking at a loss of thousand pounds if I convert the money now. I understand there's no way to predict the currency rate and the forex market will continue to be volatile and unpredictable. Preferred shares seems to be an option for a quick recovery on the conversion loss if I plan to move the money to US. I have never heard of preferred shares. Personally I am trying to avoid stocks, bonds, and mutual funds and I prefer relatively stable and safe return similar to but better than CD. Any advice?

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Old Jul 12th 2013, 6:54 pm
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Default Re: How to transfer GBP to a "Pound Sterling" account in US?

Originally Posted by nvidiot View Post
..... I have never heard of preferred shares. Personally I am trying to avoid stocks, bonds, and mutual funds and I prefer relatively stable and safe return similar to but better than CD. Any advice?
For starters, tread very carefully. Prefs are more risky than bonds, if you are avoiding bonds because you are not comfortable with the risk of holding bonds, then prefs are probably not something you should be investing in. There is a very simple reason prefs are paying more interest than bonds: the risk is higher. Economics 101: risk is proportional to return, so if the return is (much) higher than you expect, it is likely because you don't recognise all the risk(s) you are taking.

BTW When Barings Bank collapsed in 1995, although the bank was substantially owned by the Baring family, and bank "insiders" (whose investment was wiped out), the members of the public whose investment was WIPED OUT, were the owners of the preference shares. They got nothing from the sale of parts of the business, and no compensation as investors or depositors.

Last edited by Pulaski; Jul 12th 2013 at 7:05 pm.
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Old Jul 12th 2013, 7:17 pm
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Default Re: How to transfer GBP to a "Pound Sterling" account in US?

Originally Posted by nvidiot View Post
michael, thanks for such useful tip on managing excess cash. I'd definitely take the information on board and look into " high yielding (6%-8%) preferred shares". Maybe this is how I will invest my excess cash from UK.

I should've changed all my pounds to USD back in 2005 when I first moved to the states. I am looking at a loss of thousand pounds if I convert the money now. I understand there's no way to predict the currency rate and the forex market will continue to be volatile and unpredictable. Preferred shares seems to be an option for a quick recovery on the conversion loss if I plan to move the money to US. I have never heard of preferred shares. Personally I am trying to avoid stocks, bonds, and mutual funds and I prefer relatively stable and safe return similar to but better than CD. Any advice?
I've looked at everything including Greek government preferred shares (yielding 20%) but found them too risky and glad I understood the risks associated with sovereign debt. Eventually because of the tax advantages and my belief that major governments aren't going to let large banks fail (they'll let banks from Cyprus and Iceland fail but probably not major economy big banks like UBS, RBS, or BOA), I felt fairly safe investing spare cash in those types of preferred shares and everything else seemed crappy. Bonds are too hard to buy (difficult to figure out which ones are good among the millions available and I don't trust mutual funds to do the picking plus they skim off the top and don't do a very good job) and income is taxable as normal income. Everything else doesn't pay much.

Register with the above link (it's free) and look in the "Income Tables" list selecting "Preferreds Eligible for 15% Tax Rate" and look for large banks. Then click on the stock symbol and more information will be given for that preferred. At that screen, click on "MW distribution date" and that will indicate the current price and yield. Then you can purchase any of those shares through any discount broker. Since volume is low for preferred shares, always select a "limit price" and you might also want to set AON (All or None) when buying or selling. If you don't set a limit price, some speculator using high frequency trading will sell you shares at a premium or buy your shares at a discount.
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Old Jul 12th 2013, 7:26 pm
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Default Re: How to transfer GBP to a "Pound Sterling" account in US?

Originally Posted by Pulaski View Post
For starters, tread very carefully. Prefs are more risky than bonds, if you are avoiding bonds because you are not comfortable with the risk of holding bonds, then prefs are probably not something you should be investing in. There is a very simple reason prefs are paying more interest than bonds: the risk is higher. Economics 101: risk is proportional to return, so if the return is (much) higher than you expect, it is likely because you don't recognise all the risk(s) you are taking.

BTW When Barings Bank collapsed in 1995, although the bank was substantially owned by the Baring family, and bank "insiders" (whose investment was wiped out), the members of the public whose investment was WIPED OUT, were the owners of the preference shares. They got nothing from the sale of parts of the business, and no compensation as investors or depositors.
I agree that there are always risks but Bearings was not that large of a bank so it didn't have to be saved by the British government. The US government also assumed that that Lehman Brothers was not that big either (although significantly larger than Bearings at $400 billion) but we saw what happened when they failed. All the banks I'm talking about are $2 trillion banks and I don't know of any government that will let that size of bank fail unless the world economy collapses but then insured money in any bank will likely be worthless.

As far as small banks, they fail weekly so I would be adverse to purchasing preferred shares in those. Even regional banks are too small to be considered such as NY Mellon or US Bankcorp.

Last edited by Michael; Jul 12th 2013 at 7:32 pm.
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