With over 700,000 British expats living in the USA, this is the second most popular destination for Britons. It is mainly because of the exciting US job market, top universities, and a wide choice of beautiful coast-to-coast destinations ranging from the beaches of Florida to the ski mountains of Colorado.
No doubt, sending money to the UK is one of the top priorities for many UK expats living in the US. It can be a business translation or money transfer to their family or friends, while some may have to pay mortgages or loans.
No matter what’s the reason, you need to find the cheapest and the best way to transfer money to the UK from the USA to save money on transaction fees and FX rates.
There are many ways of sending money to the UK from the US, but not all options are cheap, fast, or convenient.
In this guide, we are going to explore the cheapest way to transfer money to the UK from the US. Learn useful tips on how to save money on transaction fees, how to secure a good USD to GBP exchange rate and how to send money to the UK – cheap, fast and safe!
Cheapest Way to Send Money from the US to the UK
If you are looking for the cheapest way to transfer money to the UK from the USA which safe and secure, there are mainly 2 ways:
- High-street US banks: High fees, poor exchange rate and slow delivery
- Specialist money transfer provider: Fast, real exchange rates, and low transparent fees – for example, using Wise (ex TransferWise)
The overall cost to transfer money from the US to the UK through a traditional US bank can be as high as 6% to 10% (of the total transfer amount). Whereas specialist money transfer providers like Wise (ex TransferWise) charge as low as 0.41% (of the total transfer amount).
Keep reading to see the complete cost comparison.
Sending Money to the UK From the US Through A Bank
Before the emergence of specialist money transfer providers, high-street US banks were used predominantly to make international money transfers.
However, sending money to the UK via a high-street US bank is a very expensive option (it can be as high as 10% of the transferred amount).
Traditional US banks use the SWIFT network to make international transfers from bank to bank. The SWIFT network is used by 12,000+ banks around the world, across 200+ countries.
When two banks don’t have a relationship directly via the SWIFT network, a corresponding bank (or intermediary bank) is used to facilitate the transfer – which makes the transfer cost even higher due to the added fees by the intermediary bank.
US banks charge a high fixed fee on international transfers due to 3 reasons
- High fixed transfer fees (for using the service)
- Poor exchange rates by adding hidden markups (profit margin) on USD to GBP exchange rates
- Intermediary bank fees (in some cases)
Some top US banks may attract customers by offering free international money transfers to the UK. But, the hidden markups on the exchange rate offered by the US banks can go as high as 5-7% of the mid-market exchange rate (the “real” rates that you see on Google)
Here are the international transfer fees charged by the top US banks
| US Banks | Fixed Fee |
|---|---|
| Citibank | $35 to $45 depending on the transfer method |
| Bank of America | $35 to US$40 |
| US Bank | $50 |
| Wells Fargo | $30 to $50 depending on the sending currency |
On the other hand, specialist money providers like Wise (ex TransferWise) offers the mid-market exchange rate (which is the real exchange rate that you see on Google) which is the cheapest way to send money to the UK from the USA.
Transfer Money from US to the UK Through a Money Transfer Providers
Best Exchange Rate
Cheapest way to Transfer Money to the UK
Transfer Time
In Seconds
Pay By
Wire Transfer, ACH Transfer card, credit/debit card
Info
£0 Monthly fee
Hold up to 50+ currencies
How to send money from USA to UK using Wise?
- Go to Wise’s website and create a free account.
- After logging in, go to the “Send money” option
- Check Wise fees and exchange rate to transfer USD to GBP
- Select the type of transfer (based on the nature of the transaction)
- Fill in the recipient’s US bank details
- Select your payment option and transfer money from UK to the USA
No Fixed Fees
Fastest (tie)
Fees
No transfer fees
Pay By
Bank Transfer, debit card, credit card
Info
98+ currencies available to transfer to 130+ countries
Specialist online money transfer providers have transformed the way we send money overseas, making it cheaper, faster and easier. These services are much cheaper transfer fees than the traditional banks and offer real market rate (the mid-market rate that you see on Google and other credible places).
A study by Daily Telegraph says that money transfer providers can be 6x to 8x times cheaper than the US banks.
Specialist money transfer providers like Wise and XE offer a cheap and easy option to send money to the UK from the USA. It offers low, transparent fees and offers the real USD to the GBP exchange rate (the mid-market rate).
Wise US Inc. is licensed in the USA as an international money transmitter and registered with the Financial Crimes Enforcement Network (FinCEN).
Money transfer providers are also much faster than US banks. High-street banks take around 3 to 4 days to transfer money from US to the UK, whereas top-rated money transfer providers can transfer in a few minutes.
Remember that there are many international money transfer providers that offer a low-cost international money transfer service with a favourable exchange rate, but not all providers are credible and regulated.
Wise (formerly TransferWise) is a credible and well-regulated provider, licensed under the FCA (Financial Conduct Authority) in the UK and FinCEN in the USA, which guarantees the safety of your money.
According to the guidelines of the FCA, your money is protected in a separate bank account that is NOT a part of the company’s operational account (working capital).
FCA guarantees the safety of your money by “ringfencing” it in a separate bank and ensures a safe and secure delivery of your money to the recipient account in the UK.
Keep reading to find the fastest method and cheapest method to transfer money from US to UK – whichever factor is more important to you.
What is the Best Way to Send Money to the UK from the USA?
Wise (formerly TransferWise)
Wise US Inc. (ex TransferWise) is licensed in the USA as an international money transmitter and registered with the Financial Crimes Enforcement Network (FinCEN).
Wise (ex TransferWise) is an incredible money transfer provider that offers the safest and cheapest way to send money to the UK from the US.
You can transfer money to the UK via Wire transfer, ACH transfer, debit card or credit card from the USA, but the price may vary dispensing on the payment option you choose.
Here is a quick breakdown of Wise fees for USD to GBP transfer (with different payment method)
ACH Transfer
| Amount | Fees (% of total transfer amount) | Recipient Gets* | Transfer Speed |
|---|---|---|---|
| 🇺🇸 1,000 USD | 7.40 USD (0.74%) | 🇬🇧 817 GBP 🏆 | In seconds ⚡⚡ |
| 🇺🇸 2,000 USD | 14 USD (0.7%) | 🇬🇧 1,635 GBP 🏆 | In seconds ⚡⚡ |
| 🇺🇸 5,000 USD | 34.05 USD (0.68%) | 🇬🇧 4,088 GBP | In seconds ⚡⚡ |
| 🇺🇸 10,000 USD | 67.37 USD (0.67%) | 🇬🇧 8,175 GBP | In seconds ⚡⚡ |
| 🇺🇸 25,000 USD | Not possible | Not possible | Not possible |
* 1 USD = 0.823 GBP
Wire Transfer
| Amount | Fees (% of total transfer amount) | Recipient Gets* | Transfer Speed |
|---|---|---|---|
| 🇺🇸 1,000 USD | 8.91 USD (0.89%) | 🇬🇧 816 GBP | 30 Minutes ⚡ |
| 🇺🇸 2,000 USD | 13.59 USD (0.67%) | 🇬🇧 1,635 GBP | 1 Business day |
| 🇺🇸 5,000 USD | 27.62 USD (0.55%) | 🇬🇧 4,093 GBP 🏆 | 1 Business day |
| 🇺🇸 10,000 USD | 51.01 USD (0.51%) | 🇬🇧 8,189 GBP 🏆 | 1 Business day |
| 🇺🇸 25,000 USD | 121.18 USD (0.48%) | 🇬🇧 20,476 GBP 🏆 | 2 Business day |
* 1 USD = 0.823 GBP
Wise is one of the easiest ways to send money to the UK with a simple and straightforward process – you can do it all online or by using a smartphone app, which has a user-friendly interface.
XE Money Transfer
XE Money Transfer is a credible money transfer provider and has been in the business for more than 20 years. With over £115 billion transfers worldwide every year, it is one of the safest, cheapest and fastest money transfer provider in the market.
XE don’t charge fixed transfer fees if send money to the UK (or anywhere worldwide). However, they add a markup on the exchange rate (and the only way they make money).
With zero transfer fees, XE may not always be the cheapest provider to send money because the markups on the FX rates may be anywhere between 0.5% to 2%.
That the total cost to send money to UK from US via XE would be somewhere between 0.5% to 0.8% of the total transfer amount
Another great advantage of using XE is that there is no minimum transfer amount and instant money transfer to the UK from the US.
XE is also the fastest option to send over 10,000 USD to the UK.
How Much Does it Cost to Send Money to the UK from the USA?
The cost to transfer money from the US to the UK totally depends on the amount you want to transfer, the payment method and the method you choose.
If you want to make an international wire transfer via your local US bank account, you have to be careful with the fixed transfer fee and the exchange rate offered by your bank.
A study by NerdWallet shows that the median transfer fee changed by the US banks is 45 USD when making an international transfer. Whereas, the median fee to receive an international payment is 15 USD. And these are just the fixed fees!
Meanwhile, US banks also add an average of 4% markup to the mid-market exchange rate (the actual rates).
The overall cost of a money transfer to the UK through a local US bank can be as high as 6% to 10% of the total transfer amount.
Whereas, specialist money transfer providers like Wise (ex TransferWise) charge only 0.48% of the total transfer amount.
Top US Banks charge high fixed money transfer fees (that can go up to 40 USD) along with a poor exchange rate (by adding a “profit margin” on the actual exchange rate).
On top of that, US banks usually take around 3 to 4 business days to send money to the United Kingdom.
This is why sending money to the UK via a local US bank is an expensive option.
Whereas specialist international money transfer services – like Wise (formerly TransferWise) is one of the cheapest ways to send money to the UK from the US (and the fastest)
What is the cheapest way to send money to the UK from the US?
Wise (ex TransferWise) is one of the cheapest ways to transfer money to the UK from the USA. Wise charges between 0.48% to 0.8% (depending on the amount and the payment method) to send money to the United Kingdom.
Using Wise, if you are sending money up to 2000 USD to the UK, choose the ACH transfer method to get the best possible transfer fees (0.74% of the total transfer amount). The transfer would be transferred to the recipient’s UK bank account in just a few seconds.
If you want to transfer money above 2000 USD to the UK, pick Wire transfer as the payment method (which can be as low as 0.48% on a transfer above 25,000 USD). It takes around 1 to 2 business days to get your money transferred to the recipient’s UK bank account in the UK.
If you want to transfer a large transfer amount (over 10,000 USD) to the UK and don’t want to wait for 1 or 2 business days, XE.com is another great option.
You can make instant money transfer to the UK from the US with no minimum limits and no fixed fees.
What is the fastest way to transfer money from the US to the UK?
The local US banks take around 3-5 business to transfer the money to the recipient’s bank account in the UK. Therefore, things like weekends, public/bank holidays, or working hours may impact the time taken by US banks to send money to the UK from the states.
For example, sending money to the UK with the Chase Bank and Capital One Bank takes around 3–5 business days.
Similarly, Wells Fargo claims to take “a few days” via their premium international money transfer service called ExpressSend.
Money transfer providers like XE.com and Wise offer blazing fast services that can transfer money to the UK in seconds! The transfer speed may vary depending on the transfer amount, but in most cases, it takes around 1 business day to get your money delivered to the recipient’s UK bank account.
Wise (ex TransferWise) is one of the fastest providers to transfer money to the UK from the US
You can send up to 15,000 USD to the UK in just a few seconds via ACH transfer. With a very low transparent fee and mid-market exchange rate (the actual rate that you see on Google)
However, if you want to transfer above 15,000 USD to the UK, you can use XE.com to make instant transfers to the UK with no minimum limits and no fixed fees.
USD-to-GBP exchange rate
US banks and some money transfer companies can set their own exchange rate. This is why the banks add a “profit margin” (also known as hidden makeup) to the exchange rate.
A study by Telegraph shows that the banks add an average markup of 4% to 6% on the mid-market rate.
Read more: How to send money abroad at the mid-market exchange rate
What is a good USD-to-GBP exchange rate?
A strong USD to GBP exchange rate is 0.85 GBP (considering if the USD is performing strongly against the GBP. The above rate is known as the ‘psychological resistance level’.
However, a GBP to USD exchange rate of 0.8 GBP or above is still considered to be strong.
Due to the pandemic, and the inflation due to the war in Ukraine, that impacted the inflation rate and cost of living in the UK. The UK’s unstable political situation added fuel to the fire, pushing the GBP to a record low. Due to this, the USD was performing very strong against GBP, with an exchange rate of 0.9 GBP.
Although the pound has shown signs of recovery in subsequent months. Therefore, any rate above 0.75 GBP is considered to be a fair deal with the current crisis and market conditions.
Source: Telegraph.co.uk
It is no surprise that the exchange rate offered by the US banks is terrible due to the operating cost and the “profit margins” on the FX rate are one of the review sources for the traditional high-street banks.
Money transfer providers offer a better exchange rate than US banks. And in most cases, many providers like Wise (ex TransferWise) offer mid-market exchange rates (the real rates that you see on Google) that can be up to 8x times cheaper than the banks.
If you are sending a very large amount to the UK, Wise also offer special discounted fees (along with the real USD to GBP exchange rate) which is by far the cheapest way to send money from the US to the UK.
How to Send Money to the UK from the USA?
No matter which option or provider you choose, you would need the following things to transfer money to the UK from US
- A valid ID with your full name, address, date of birth (for registration and verification)
- Recipient’s local UK bank details that includes
- Full name of the UK account holder
- UK account number
- UK sort code
- You would also need to choose a payment method – such as wire transfer, ACH transfer, credit/debit card or cash (via banks or Western Union)
How to Send Money to a UK bank account online?
You can send money to the UK online using your online banking or via a money transfer company like Wise (ex TransferWise)
This is how you can send money to the UK via Wise
- Create a free Wise account.
- Enter how much you want to send in USD or how much you want the recipient to receive in GBP.
- See both the exchange rate and the fee.
- Enter the recipient’s UK bank details such as
- Full name of the UK account holder
- UK account number
- UK sort code
- Confirm the transfer.
- Select your preferred payment method.
- Once Wise gets your payment, it will send the money in AUD to your recipient.
What are the Tax Implications to Send Money to the UK from the US?
Disclaimer: MoneyTransferStore does not provide any financial advice or tax-related advice. You should contact a tax advisor for detailed and professional consultation. The information provided on this blog is for the general understanding of the sender and receiver.
Tax implications for the sender in the US
If you are a US citizen, you can gift up to 11.18 million USD in your lifetime without paying any tax. Therefore, when you send money to the UK, you can choose if you want to pay tax on the amount, or use your lifetime tax-free exemption limits.
Moreover, you can send an unlimited amount of money to your spouse tax-free if your spouse is also a US citizen.
Michelle Miley and Ryan Cockerham (finance experts for The Nest).
However, before sending any money to the UK, We would also recommend consulting with a professional account, tax advisor, and/or the IRS, before sending money internationally from the US, if you want to remain fully compliant with the regulations.
Tax implications for the recipient in the UK
Normally, receiving money from the US to a UK bank account should not raise any tax-related issues. If you receive money in your UK account, sent from the US (and is taxed in the US or sent as a gift) then in most cases the money is tax-free in the UK.
Tax-related issues normally occur when a UK resident or a UK tax resident, but not domiciled in the UK, receives money as a form of overseas income (such as rent revenue from the rented property or earning from share market). If you receive these types of earnings in the UK, then it should be declared on your tax return.
If the recipient in the UK is NOT a UK tax resident, they do NOT have to declare the earnings during the tax return. However, they still need to pay tax on income earned within the UK.
Tax experts: Naveed Lasi at Xerxes LLP, and Kenny Macdonald at Turcan Connell.
However, before sending any money to the UK, We would also recommend consulting with a professional account or a tax advisor to remain fully compliant with UK and US laws.
