Lowest fee for transferring from GBP to USD HSBC Accounts

[jwl83]

Hello all,

I run a small business which involves paying some of my suppliers in USD. My business is an LTD in the UK and my main business account is in GBP. Until now each USD payment has been an individual transaction made via HSBC online banking.

My assessment is the GBPUSD rate is likely to worsen (I appreciate not everyone will agree). I make 50k~100k USD payments annually and I think it would be beneficial to transfer some of the business GBP to USD now to delay the burden of worsening GBPUSD rates. I have a separate HSBC USD account for the business which I never use. HSBC charge a very poor rate to transfer GBP to this USD account.

Can anyone suggest lower fee ways of doing this? Should I be looking at TransferWise or similar? I don't know if they apply given the money is being transferred between the same business and not leaving the UK?

Thanks in advance for any advice!

John

[richfool]

Hello all,
I run a small business which involves paying some of my suppliers in USD. My business is an LTD in the UK and my main business account is in GBP. Until now each USD payment has been an individual transaction made via HSBC online banking.

My assessment is the GBPUSD rate is likely to worsen (I appreciate not everyone will agree). I make 50k~100k USD payments annually and I think it would be beneficial to transfer some of the business GBP to USD now to delay the burden of worsening GBPUSD rates. I have a separate HSBC USD account for the business which I never use. HSBC charge a very poor rate to transfer GBP to this USD account.

Can anyone suggest lower fee ways of doing this? Should I be looking at TransferWise or similar? I don't know if they apply given the money is being transferred between the same business and not leaving the UK?

Thanks in advance for any advice!

John

I'm not sure of any implications of you running a business account, but yes I would look at a TransferWise account.

I hold a TransferWise account and within that hold a number of foreign currencies, that I can draw on if I wish to transfer funds to people in other countries. I tell TransferWise how much I want to pay in and in which currency and they tell me how much to send from my bank (or by debit card). Their fees and exchange rates are very good. Just Google them.

[GrahamPlatt]

I have long prosetylised TransferWise. Still use them. But then heard of Fineco - see viewtopic.php?f=9&t=24990&p=335939&hilit=transferwise#p335912 (thread for which I've just searched out). It just pips TW (you'll see I replied on that page).

[Maylix]

Hello all,

I run a small business which involves paying some of my suppliers in USD. My business is an LTD in the UK and my main business account is in GBP. Until now each USD payment has been an individual transaction made via HSBC online banking.

My assessment is the GBPUSD rate is likely to worsen (I appreciate not everyone will agree). I make 50k~100k USD payments annually and I think it would be beneficial to transfer some of the business GBP to USD now to delay the burden of worsening GBPUSD rates. I have a separate HSBC USD account for the business which I never use. HSBC charge a very poor rate to transfer GBP to this USD account.

Can anyone suggest lower fee ways of doing this? Should I be looking at TransferWise or similar? I don't know if they apply given the money is being transferred between the same business and not leaving the UK?

Thanks in advance for any advice!

John

Hi John, I've used Transferwise a couple of times (a year apart) and have been very impressed. You should be able to do what you want quite easily. You could also have the money sit in your transferwise USD account and just make payments to your suppliers direct from there.
HTH
Maylix

[GoSeigen]

Can anyone suggest lower fee ways of doing this? Should I be looking at TransferWise or similar? I don't know if they apply given the money is being transferred between the same business and not leaving the UK?

Thanks in advance for any advice!

John

Another vote for TransferWise and an honourable mention for HIFX/XE who have served me well over the years and once swallowed a £25 charge HSBC made because they (HSBC) decided to route my USD payment to a UK entity via New York. Entirely HSBC's fault and to my reading contrary to their T&Cs, but do be aware that this may happen.


GS

[dealtn]

Can anyone suggest lower fee ways of doing this? Should I be looking at TransferWise or similar? I don't know if they apply given the money is being transferred between the same business and not leaving the UK?

Thanks in advance for any advice!

John

You don't need to do it now.

As a comparison ask your bank for a quote for a forward FX transaction. You could also ask other banks/institutions. You would only need to "settle" the contract at the future settlement date, leaving the £ in your working capital rather than have $ sitting in a bank account.

[jwl83]

Thank you all for the advice. It's good to know that TransferWise (and similar services) are a viable tool for this.

As a comparison ask your bank for a quote for a forward FX transaction. You could also ask other banks/institutions. You would only need to "settle" the contract at the future settlement date, leaving the £ in your working capital rather than have $ sitting in a bank account.

Thank you dealtn for this suggestion. Until now I'd assumed futures were for "bigger fish" than me. I'll check with HSBC about this. Do you recommend any other organisations that may provide good options for businesses with the kind of requirements I have (50k~100k USD annually)?

[dealtn]

Thank you all for the advice. It's good to know that TransferWise (and similar services) are a viable tool for this.

As a comparison ask your bank for a quote for a forward FX transaction. You could also ask other banks/institutions. You would only need to "settle" the contract at the future settlement date, leaving the £ in your working capital rather than have $ sitting in a bank account.

Thank you dealtn for this suggestion. Until now I'd assumed futures were for "bigger fish" than me. I'll check with HSBC about this. Do you recommend any other organisations that may provide good options for businesses with the kind of requirements I have (50k~100k USD annually)?

Just to be clear these aren't "futures" in the normal sense. This is simply a FX transaction with a settlement date that isn't "spot", but some date in the future. It is very common to do this for periods of up to a year (you can do it beyond but far less liquid and customers cash flows and requirements are less known).

In its simplest terms you get to transact at "today's" exchange rate, but settle on some future date, with the transaction adjusted for the interest rate differential between the 2 currencies.

My experience is on the other side of the fence. I've never done one as a customer (but many 1,000s as the provider - my first trading job in the City!). The downside is if you are being offered poor "normal" FX terms then the Forward terms will be just as poor, since the main driver is the bank's normal FX rate. I just offer it as an alternative, but you should find a "better" FX provider first.