How to transfer money to a US bank account cheaply from UK and Europe

Emigrating to the USA from a foreign country throws up many unexpected problems.  One of them, I found, is what to do with all my bank savings, more specifically how to transfer money to a US bank account cheaply from UK and Europe, without having large chunks of it taken off you in banking fees or by ridiculously low exchange rates.  I was living in the UK at the time and I cannot vouch that my experience of tackling this problem will be the same for everyone in the world, but I suspect it will be pretty similar for many people.  Anyway, here is a list of some of the problems I had and how I decided to resolve them, or get around them and in the end looking at using foreign exchange sites.

Should I open a US Bank account before I send money to USA?

I did not have a US bank account at the time I wanted to transfer money.  I did consider opening a US bank account, but I decided in the end to wait until I arrived in the US to do that.  As I found out later, opening a US bank account as a non US citizen can be a total pain, so it was probably a good thing that I didn’t even attempt it.  Instead I opted to transfer money to a bank account that my wife (fiancee at the time) had.  This definitely simplified things, although I would still have to go through the trouble of opening a US bank account later when I began living here (I will post more about that later), it made it easier for me to send money to USA at the time.

The Options if you want to transfer money to a bank account in the USA

There are a whole range of methods of transferring money around.  In this article, however, I am talking specifically about transferring my savings, that’s to say that I am aiming this at people who want to transfer money to a bank account from UK and Europe and the amount of money is in the thousands, rather than hundreds.  I have visited the US a number of times and just got my bank to change some pounds into dollars that I have later used for spending on the trip and I haven’t been too concerned if the bank has taken some money off me in charges and through lower exchange rates.

You can’t carry large amounts of cash into the USA, even if you wanted to, as it is illegal, I believe.  What you need in order to transfer money to a US bank account is a service that will both convert your money to dollars and deliver it the US bank account of your choice and do it as cheaply as possible for you.

Option 1

The first main option is to just use your own bank to send money to the USA.  I had used my own bank before, when I sent my wife some money to pay for the I-129 petition fees.  My bank were able to transfer money relatively quickly (within 5 days) and it was easy to do over the internet, I had discovered – the only problem was that it was pretty expensive when you worked out all the costs and the costs became bigger and bigger, the more money was being transferred, I realized, due to the low exchange rate being offered.

Option 2

I did some research on the internet and came up with a second option.  This was to use a Foreign Exchange site to do the transfer.  They specialize in foreign exchanges of currency and offer way better rates than the everyday banks, or ‘high street banks’, as we call them in the UK.  They normally have minimum rates that they will consider transferring (£300 - £500 is fairly typical) but if you have more than that, like me, then you are okay.  I looked up some of the companied and compared rates, either by getting quotes over the internet directly from the companies, or by using price comparison websites, of which there were quite a few for foreign exchange sites.  I also read about other people’s experiences via the internet.

In the end I narrowed the field down to two companies, XE.com and HIFX.com.  I must admit that one reason why I went with these companies was just that that they were big and popular.  I was nervous about transferring thousands of pounds to a company that my only contact with was filling out forms on the internet and I felt a little safer with a big company!

The actual transfer to a US bank account

In the end I went with XE.com.  I can’t say that they are the best.  They are one of many Foreign Exchange sites out there.  All I can say is that I have used them twice without there being any trouble with the money transfers.  The same thing would probably have happened if I had used HIFX or one of the other Foreign Exchange sites.  Anyway, the money transfer arrived in my wife’s (fiancee at the time) account five days later.  I saved about a hundred pounds doing it this way, which makes it worth the hassle in my opinion.