Bank account to receive wages in USD

Sutty

Hi

My company have started paying my wages in US Dollars. What's the best way to get good exchange rates and minimal charges when I get paid? A few people at work are opening US Dollar bank accounts to receive their wages. Is anyone else in a similar situation that can offer advice.

Many thanks in advance, Chris

le_loup

My advice would be to fight it.
Assuming you are employed in the UK, paying UK tax and insurance, buying your housing, food and travelling in the UK, it is then unreasonable that you should be paid in anything other than your native currency.

Sutty

It's an opt-in thing so I wouldn't fight it. It works out as a substantial payrise to take the dollar option. I work internationally for an international company. I'm just keen on keeping the bank charges to a minimum.

le_loup

Erm, you know it's a substantial pay rise but you don't know the cost of conversion or the pound/dollar relationship tomorrow?

Sutty

Yeah, that's pretty much it. I don't mind taking the hit and getting it paid into my UK bank account at their rate of exchange and commission but if I can find a cheaper way of doing it then why not? More cash in my pocket then.

mauriphonic

Ask your bank first if they do foreign currency accounts, and then see if you can speak to forex/treasury to obtain better rates for the conversions. I used to do this whilst overseas, but couldn't say for sure if it would work the same here - probably not in all honesty unless you're talking 5 figure amounts each time. It saved a fortune in transfer fees by making it fee free internal transfers, and the conversion rates we obtained by speaking to the forex/treasury dpt were significantly better than counter rates, and in some cases better than we would have obtained using services such as xe.com - Custom House, which is a good starting point for your conversions when you have secured a USD account if the above isn't an option. I I'm pretty sure HSBC do them, else I'd expect Citibank would, though I have no experience of this. A lot may depend on the amounts you are changing but it is well worth doing your homework on. Its possible to add quite a bit to takehome pay this way, but you can also get hammered when the exchange rates go the wrong way. I lost a third of my salary when the pound took a dive in 2008!

JacksterD

How substantial is the pay rise? You know the reason they want you to accept this deal is because it will transfer the risk of dealing in foreign currencies from their books to yours? Give this some serious though before you accept it.

RetiredInThailand

Just make sure that when you do your exchange it is at a booked rate. You only get the booked rate by asking for it. If you dont ask for it you wont get it. It could amount to as much as 2% or 3% and in my experience makes the High Street bank rates just as good as the foreign exchange brokers' rates.

And if you do your exchange with a High Street bank you probably wont lose anything if they go belly-up during the process, unlike the brokers who have no deposit protection at all.

Sutty

It's about a 17% payrise. I'll take a look at some of the options above when I get a minute. Thanks to all for the replies.

le_loup

Under the last Conservative government, the Pound ranged from one to the dollar to two to the dollar.
17% could look sick in some circumstances. Look at the people who retired to Spain and now have to live on euros but get pensions in pounds.
How about the Polish people who had mortgages in Swiss francs.
The whole notion of getting salary in one currency but living in another is fraught ... but makes perfect sense for your employer!