US Dollar account in UK

BVI_EXPAT

Greetings to the forum, not posted in a while but always lurking. I'm doing some preparation for my retirement next year. I lived in the British Virgin Islands for 25 years and payed more than enough Social Security to entitle me to a full BVI pension when I retire at 65. I returned to the UK permanently in 2017. Now here's the thing, the BVI Social Security Board will make monthly pension payments to me by BVI to UK bank transfers but only in USD. Not a problem as I intend to open a USD account with Barclays and this will essentially be cash reserve account as I will not need to draw on it regularly as I have other good pensions. My question is, when I do need to daw on it, the bank can sell me GBP at their rate or I can withdraw USD in cash and change it elsewhere when the rate is favourable, I would welcome advice on the best way to do this ?

PRAISETHESUN

I would avoid both those options - either the bank or the cash exchange bureau you use will rip you off with poor rates.

I'd use one of the specialist currency conversion services discussed here: https://www.moneysavingexpert.com/banking/foreign-currency-exchange. I've used Wise and can recommend them. They offer a competitive combination of good exchange rate and low transaction fee that will give you more GBP overall at the end of the transfer.

Exodi

As above, I would avoid this.

Mainstream bank FX charges/rates are usually abysmal.

If it was me personally, I'd open a Wise account.

It even comes with a debit card that can convert in real time, so you wouldn't even need to bother converting it if you didnt want to, just hold the money in your account as USD but pay in GBP in the shops. The icing on the cake? The exchange rate and fees are generally considered one of the best in the market.

EDIT: sorry completely glossed over PRAISETHESUN's recommendation of Wise  - consider me a fan also, have used them for many years.

BVI_EXPAT

PRAISETHESUN said:

I would avoid both those options - either the bank or the cash exchange bureau you use will rip you off with poor rates.

I'd use one of the specialist currency conversion services discussed here: https://www.moneysavingexpert.com/banking/foreign-currency-exchange. I've used Wise and can recommend them. They offer a competitive combination of good exchange rate and low transaction fee that will give you more GBP overall at the end of the transfer.

Thanks for the reply and advice, I will look at Wise for currency conversion. Do you see any problem with having a USD account here in the UK to hold the cash ?

Exodi

BVI_EXPAT said:

PRAISETHESUN said:

I would avoid both those options - either the bank or the cash exchange bureau you use will rip you off with poor rates.

I'd use one of the specialist currency conversion services discussed here: https://www.moneysavingexpert.com/banking/foreign-currency-exchange. I've used Wise and can recommend them. They offer a competitive combination of good exchange rate and low transaction fee that will give you more GBP overall at the end of the transfer.

Thanks for the reply and advice, I will look at Wise for currency conversion. Do you see any problem with having a USD account here in the UK to store the cash ?

On my Wise account at the moment I'm holding a GBP, USD, EUR & PLN balance - so no!

Just for clarity - you can hold the money in Wise also, they can act as an account, not just a conversion service.

BVI_EXPAT

Exodi said:

BVI_EXPAT said:

PRAISETHESUN said:

I would avoid both those options - either the bank or the cash exchange bureau you use will rip you off with poor rates.

I'd use one of the specialist currency conversion services discussed here: https://www.moneysavingexpert.com/banking/foreign-currency-exchange. I've used Wise and can recommend them. They offer a competitive combination of good exchange rate and low transaction fee that will give you more GBP overall at the end of the transfer.

Thanks for the reply and advice, I will look at Wise for currency conversion. Do you see any problem with having a USD account here in the UK to store the cash ?

On my Wise account at the moment I'm holding a GBP, USD, EUR & PLN balance - so no!

Just for clarity - you can hold the money in Wise also, they can act as an account, not just a conversion service.

Thanks, So Wise functions just like a bank ? How safe are they, are they covered by the FSCS £85k ?

Exodi

BVI_EXPAT said:

Exodi said:

BVI_EXPAT said:

PRAISETHESUN said:

I would avoid both those options - either the bank or the cash exchange bureau you use will rip you off with poor rates.

I'd use one of the specialist currency conversion services discussed here: https://www.moneysavingexpert.com/banking/foreign-currency-exchange. I've used Wise and can recommend them. They offer a competitive combination of good exchange rate and low transaction fee that will give you more GBP overall at the end of the transfer.

Thanks for the reply and advice, I will look at Wise for currency conversion. Do you see any problem with having a USD account here in the UK to store the cash ?

On my Wise account at the moment I'm holding a GBP, USD, EUR & PLN balance - so no!

Just for clarity - you can hold the money in Wise also, they can act as an account, not just a conversion service.

Thanks, So Wise functions just like a bank ? How safe are they, are they covered by the FSCS £85k ?

Wise is not a bank (though allows you to hold accounts with them) - as such they are not covered by the FSCS, though they are FCA regulated.

Sorry to answer your 'how safe are they', they transfer billions of pounds per month across 80 countries.

Have a scroll down and a read of their homepage - https://wise.com/

Brie

Not used Wise but have heard lots of recommendations for them.  For protection I would stick to having the Barclays US fund account and transfer over to Wise when you need to access some cash.  I'm assuming there are no or only minor fees on the Barclays account.  

Exodi

Brie said:

Not used Wise but have heard lots of recommendations for them.  For protection I would stick to having the Barclays US fund account and transfer over to Wise when you need to access some cash.  I'm assuming there are no or only minor fees on the Barclays account.  

Having a Barclays business account, they seem to charge us for everything except looking at our account.

I'm not sure if you're able to send USD via the Faster Payment network in the UK. You may find that they charge you for transferring USD > USD (though I have no ideas about the charges on a personal account).

Personally seems like a lot of faff and potential cost to hedge against one of the biggest currency companies going bust, but appreciate that stranger things have happened.

BVI_EXPAT

Excellent, thanks for all the replies, I knew I would find the answer here ! So the way forward then is to hold the bulk of the funds in a FSCS protected Barclays USD account and transfer smaller amounts to Wise if I need cash or spend on the Wise debit card.

eskbanker

BVI_EXPAT said:

Excellent, thanks for all the replies, I knew I would find the answer here ! So the way forward then is to hold the bulk of the funds in a FSCS protected Barclays USD account and transfer smaller amounts to Wise if I need cash or spend on the Wise debit card.

Another option to consider would be to immediately convert each deposit via Wise to a GBP account in your name and pool it with all your other money, taking advantage of interest earned from savings accounts, etc?  The fact that the Barclays USD account is FSCS protected doesn't necessarily mean that it's the best repository for the money, although I don't know if it's cost-effective to have that account without much, or anything at all, in it....