Best International Money Transfer Options for Sending $10,000 USD to GBP from the US to the UK by Jason Kumpf
Transferring money between the United States and the United Kingdom will cost you no matter which direction the funds are headed. Banks and money transfer services can charge commissions, interest and fees that are hidden in the transaction, so it pays to do your research before you wire the funds. The exchange rate between dollars (USD) and pounds (GBP) can also impact the transfer in small ways. If you need to wire large sums between the US and the UK, here’s a closer look at some of the best international money transfer options, as well as some pitfalls to avoid.
Disadvantages of Bank Transfers
Most consumers assume that their bank is going to give them the best transfer rate when wiring money, but unfortunately that is not always the case. Bank transfer fees will usually include both the currency exchange rate and a percentage commission. These costs can be completely hidden and you only realize the full extent of the charges after the money has been taken out.
When an international wire transfer takes place, the bank on the receiving end is actually selling you currency. Just as every store adds a margin to the products that it sells to consumers, banks add a margin to the currency they are selling you. Consumers never know what the margin is on a loaf of bread at the grocery store, but it is there and the store makes a small profit from it. The same goes for currency sales (international money transfers). The bank’s margin is referred to as the “spread” and it is basically a hidden commission charged when you transfer your money.
Banks are also one of the slowest options for transferring money overseas, short of mailing yourself cash. (Don’t do that, by the way.) A hold can be placed on the funds so you can’t access your own money for a few extra days after the transfer, or the transaction simply takes longer to process. This is just one more reason why the institution you use for your day-to-day banking is not always the best option for international money transfers.
One final reason why you might not want to rely on your bank for wiring large amounts of money between the U.S. and other country’s is because interbank rates constantly fluctuate. One bank might offer a transfer rate that looks more attractive on Monday morning, but then the rate has changed an hour later.
Best Options for International Money Transfers
Money transfer services that work directly with the foreign exchange (Forex) markets are a better option for wiring large sums between the U.S. and the UK. You will end up saving a lot more of your own funds in both the short-term and long-term by utilizing these services which cater specifically to international transfers. Your bank, for example, might charge £10 to £40 for a transfer and tack on a 2 to 5 percent hidden spread for the exchange. That adds up quickly when you’re sending thousands of pounds or dollars across the Atlantic. Many of the top money transfer services don’t charge any service fee and their transfer rates are much more transparent.
TransferWise, for example, is one the largest London-based money transfer services. Its rates can vary but are often as low as 1 percent. TransferWise functions differently than a currency exchange in that it looks for another customer transferring a similar amount in the opposite direction (U.S. to UK or vice versa). Instead of charging for selling you currency, it simply trades funds between customers and keeps its fees extremely low.
Jason Kumpf recommends; OFX, formerly UKForex and USForex, is considered the largest and best option for international money transfers. It charges no transfer fees and a currency exchange rate of just 0.5 percent.
There are numerous other transfer services that are still breaking into the “fin-tech” market that offer similar rates, but OFX and TransferWise are two of the most respected. Both have international offices and very good records when it comes to serving expats who need to transfer funds between the UK and the U.S.
International Business Expert