I am trying to work out the best way to transfer circa $500k to the UK as I am moving permanently. What are the best options to save on Forex fees?
Transferring Large Sum to the UK
Comments
Thanks!
Is it easy/possible to transfer it as a lump sum to a UK bank account? There are no fees?
Approx $2k fees on $500k which is lower than anywhere else that's reputable and far far far lower than asking your bank to do it directly. You usually want to pay reasonable fees rather than having somewhere with no fees but rips you off on the conversion rate (whereby you lose more). 0.53 AUD to GBP exchange rate is as good as it gets but definitely cross-shop anyway.
https://files.ozbargain.com.au/upload/255280/103290/wise.png
Strongly suggest a trial run, say just $1,000 and see how that goes. Then maybe break it up into batches to reduce potential risk.
The issue is likely to be the UK. A sum suddenly coming in that large will most definitely trigger some alarms. From taxation to money laundry checks.
I would speak to Natwest/Barclays/whomever and let them know what you're planning to do so their anti-fraud team note your account and/or advise further. You may need to provide evidence of payslips or property sale etc.
I painstakingly manually transferred £10,000 a day for weeks (Natwest online limit). Worked fine for me and had no issues.
Just confirming, my steps would be.. go to the bank branch to transfer $500k to wise before I leave, then drip the money into a UK bank account
from wise once I've set one up?@jm7: 1) Setup a Wise account and link AU and UK bank accounts.
2) Transfer an initial $1,000 as a test run to understand the transfer process and ensure all goes smooth and setup correctly.
3) Decide if you want to transfer $499k balance in one go (not advisable) or do $25k a day or something in between.
3A) For another over $25k (or whatever your AU bank limit is) you'll need to go into a branch and ask for a large transfer (they will usually cite ID). At this point recommend you contact UK bank and advise them what's coming.
3B) If you're happier to do manual smaller batches over time, then you can do so yourself via online banking. Safer but tedious.
4) When you do the transfer, you have a choice of either transferring the funds to a Wise digital account (not for me) or directly to your UK bank account (my preference). If the latter, nothing further required, money will go directly into UK account. If the former, then extra steps of transferring Wise account to UK account.Start a small transfer and just follow the process, it'll become clearer.
@jm7: Then all this is moot right now unless you're happy to transfer everything to a Wise digital account. I would not be personally, but I'm sure many have just fine. Your call.
Plan B is go to HSBC to setup a local account with linked international account based in UK. You can setup a UK account from here with them. They have some special product that allows you to transfer between them but no idea the rates or fees. Worth an ask I suppose.
https://www.hsbc.com.au/international/overseas-account-openi…
@Hybroid: I wonder if I can transfer from wise into the HSBC UK account I create here to save on fees 🤔
@jm7: You can, but if you transfer it into wise (and hold it in wise) then you will pay more fees than if you just use Wise to move it from bank to bank (as you will pay them a small fee again when you "withdraw" it from wise). Also Wise charge you a fee to hold large amounts of money with them - because they are not a bank and are required to hold assets to offset any UK/EU funds - so they charge their customers a fee if they hold a large amount of money in wise (like a negative interest rate really!).
You won't earn interest while it is with wise, and as they are not a bank you do not have full protection if something happens. Not an issue if you are just using them for days and know you will have HSBC open in days I guess.
For a large amount I would only advise to use them to TRANSFER the money (not actually hold it in wise). Also beware that you need to be on top of them. I know people who have done large transfers that get stopped for checks and Wise never contact you to actually do the check - its only when you chase why the money has gone missing that they actually start to do the checks.That said - the exchange rate is currently going the wrong way for you?! Your going to get less than almost any point over the last few years if you do forex Aus>GBP right now.
@Webber000: Thanks for this! I could hold off transferring it for a year or so (and get interest in the meantime) but I won't be in Australia to go to the branch to organise the transfer. I wonder if it's possible to do it over the phone? My money is currently with BOQ but I could move it to another aus bank if I need to. Will probably just use ING for purchases in the UK in the meantime, and maybe ANZ for cash withdrawals in the short-term (I think their fee is cheapest for overseas ATM withdrawals? 🤔)
@jm7: While we can never guess what the rules may be in a years time, I don't see why there should be a big problem as you would just go on BOQ internet banking and do the transfer. I guess it COULD be better if you set up Wise now and do a small transfer now so that BOQ would then know in a years time it is someone you have used before so you are less likely going to get stopped by security checks.
Who knows what the forex will be in a year - but personally I would hold off like you suggest if you don't have needs for the money now as my guess is the rate will be better for you next year! It does appear to be climbing slowly especially the last 2 months.
You mentioned HSBC earlier. Just wanted to flag that you can open a HSBC Australia "everyday global account" and they give you FREE cash withdrawals at most HSBC cashpoints worldwide, but that account also has the ability to transfer money into other currencies at quite good rates (they fix the rate daily so its not quite live and have a fixed fee so depending on what you are doing it can be cheaper than wise potentially) and they also offer you the ability to open an account in that currency (so sort of like having a GBP£ account with HSBC Australia that also uses your same debit card - like wise does really). I don't know the full details and it is a lot more limited in currencies than wise but it may be an option for you?
per wise 500k is currently showing as 263,005.77.
per IBKR its 264,061, I can't see the brokerage as I need to have that many funds in my account first for it to calculate it.
I also use OFX.
Yes, me too, but it's worth it to call them, I got a 7.5 pip spread on a big transfer, after calling them.
Thanks for the suggestion. I will definitely look at wise and ofx 🙂
crypto
Crypto could be an option, but a little bit of volatility could work for or against you.
There could also be some liquidity issues, which could increase slippage.
Well worth a look into though.
Most you could possibly save is around £2000, so is it worth the risk / hassle?Wise appears to give the best conversion currently (wise.com).
I have also used CurrencyFair previously, but wise.com gives slightly better conversion rates.
OFX is a bit behind the above in terms of conversion rates.Thanks! This is really helpful
Remember to do a trial transfer first of maybe $50….
Thanks for the tip 🙂
a must! ^
One way that you could explore is to open a trading account with Interactive Brokers. Link your AU bank account for transferring the funds to IBKR, Buy GBP at spot rate, there will be a brokerage, in my experience the brokerage is less than fees charged by other operators like Wise.
You need to have your GBP account setup, and should be in the same name as IBKR.
IBKR usually allows one free withdrawal/ month based on my experience in using this route for USD. GBP might be different
But if you keen to save some coin, find out more about this route as this lets you buy FX at spot rate.I did exactly this in 2019 but the other way round GBP into AUD, using Wise (then Transferwise). No hitches. But it did take 48 hours to clear due to additional checks imposed on large sum.
Was only asked about the source of the money by Wise, both the UK & AU clearing banks never spoke to me. In my case it was also a property sale.
Find someone you can trust who wants to transfer pounds to Australia. Send your Aussie dollars to their account and have them transfer their British pounds into your account.
Unfortunately I don't know anyone that is trying to convert GBP to AUD
www.wise.com
$500,000 nets you £263,957.66 right now which I don't believe is beatable.
You will need to go into bank branch for larger than $25k transfers or split it into batches.