Converting US dollars in bank account into pound sterling at fair exchange rate?

martinisfab

We have money in a Citibank US dollar account and, even though it is a UK-based account, the money is therefore held in US dollars. Citibank charge a very unfavourable currency exchange rate when making the payment to somebody who needs paying in pound sterling.

I need to transfer a large sum from this account to someone in pound sterling and was wondering if there was a way of making the payment without losing a significant chunk in Citibank's exchange rate?

Could I, for example, transfer the money to a company that converts currencies and then transfer them to the person who I need to pay? Does anybody have recommendations of currency exchange companies that provide the service I'd need?

Thanks in advance for your advice.

Voyager2002

Depends how large an amount you are exchanging. Currency brokers are the obvious answer, and under normal circumstances I would recommend https://www.xe.com. However you need to get the dollars from your account to the currency broker, and the normal methods of making electronic payments do not work from the UK Citibank dollar account. So, see if you can find a currency broker who accepts payments by debit card if your account offers that facility: otherwise you will have to pay the fee for a wire transfer, which is around twenty-five pounds.

martinisfab

You are very knowledgeable. Thank you.

Yes, I just rang Citibank earlier and they confirmed that it costs £25.00 to transfer money out, and there is no free method. Very unfair I think.

But the bigger way they make money is on their exchange rate. I'll check out xe.com's rate. Is there anybody else anybody would recommend please?

Archi_Bald

Exchange rates and charges change on a daily, or even hourly or faster basis.....best deals can be had from specialist money transfer outfits/ Look here: http://www.fxcompared.com/ - - but there are other comparison engines out there, so a bit of googling might find you something better.

BeachNut

How about opening a GBP account with citi (hold the minimum balance). When you want to exchange from USD to GBP have the funds credited to your GBP account, then you should be able to use faster payments to make payments onwards to other UK GBP accounts.

Citi do have lousy exchange rates but their interest rate on USD's, although not the best, ain't too bad...

browser

*I'm assuming you will be in the fee-free range of most FX brokers (>5000GBP)*

I use UKForex who I found had the best exchange rate when I compared XE/CurrenciesDirect/MoneyCorp/etc. I still check every now and then but UKForex always seems to come out on top (I just checked again and that fxcompare site is wrong)

I recently found TransferWise which does charge a fee and doesn't lock in your rate. However, the rate is very very good and even with fees may beat UKForex.

So in short...UKForex is my current top pick...but that may switch to TransferWise

atypical

browser wrote: »

So in short...UKForex is my current top pick...but that may switch to TransferWise

OP's issue is that they can't tansfer money to a broker any way other than using a debit card which most brokers don't accept. Presume Citibank does this intentionally to lock you into using them for conversion.

Transferwise allows debit card payments but they don't convert from USD to GBP, only vice versa.

Paypal charges 2.5% for the conversion and 3.4% + 20p for using a debit card to deposit funds.

browser

OP's issue is that they can't tansfer money to a broker any way other than using a debit card which most brokers don't accept. Presume Citibank does this intentionally to lock you into using them for conversion.

For the large sum that is being discussed (i don't know the exact value) but I assumed the £25 wire fee was worth paying for the increased payout via FX broker. (even a 0.01 exchange difference makes it worthwhile on 10k USD)

Thanks for the info on TransferWise. I've only used them for GBP-> USD so far...didn't realise that was their limit! Strange because I thought the way they worked was by matching your request to a request going the other way...but anyway, that's off topic...

edit: TransferWise do USD to GBP just with a higher fee - you have to email them to add the feature to your account. There may be uncertainty in intermediate fees though since their USD account is in Europe.

blinko

So am I right in thinking that Citi only give you a debit card on the account and this is the only access to your money

and no option to BACS transfer to other accounts?

If this is a the case another possible way would be to open an USD account with another bank and transfer the currency across via debit card (there shouldn't be any charge for this_) then to a broker