Funding a $ trading a/c from a UK bank

[timcannell]

I have just successfully opened a TS8 account and am about to fund it from my high street bank account - without having looked into this what is the most efficient way in terms of exchange rate ? If I just go ahead and wire the money at what point and at what rate will it be converted into dollars ?

 

[awoodj]

My experience

If you have to wire in US$ then you will likely get the tourist rate from your bank, there will be a huge spread and it will cost your dearly. Firstly I would check with your branch and verify if this is the case and if so look elsewhere. There are a number of sites on the Internet offering conversions at far better rates but as i have not used them I would not like to give any recommendations.

I have just successfully opened a TS8 account and am about to fund it from my high street bank account - without having looked into this what is the most efficient way in terms of exchange rate ? If I just go ahead and wire the money at what point and at what rate will it be converted into dollars ?

 

[ardhill]

I have a Tradestation Account and simply wired money over (It's called a SWIFT transfer in the UK).

There were no problems and all went fairly simply.

When I transfered the money, I was given an estimated conversion rate. A few hours later, I was told the actual rate that it was processed.

When transferring the money I was asked if I wanted to transfer in US$ or £Sterling eg. do I want to transfer $30,000 or £20,000, I choose the dollar amount. By choosing this, I didn't know exactly how much it would cost me for a few hours, make sure that there is a bit of room in your account for fluctuations if you do it this way.

I transfered the money at about 9.30 am and it was in my Tradestation account by later on that night. The bank told me it would be much longer so I was happy 🙂

 

[BBB]

The UK bank will have to convert the money to USD first. If you are transferring largish sums I would try and negotiate a better rate than they will typically quote - likely to be the tourist rate.

When I opened my first account (all those years ago), I phoned round the banks to find the lowest rate. I then approached my bank and insisted they match the lowest rate, or I I would move my business elsewhere. Believe me - when I consider the saving it was worth it! I got something like an extra 7c to the pound.

When transferring money from USD to GBP I have found most US brokers offer a better rate than any UK high street bank - of course, some US brokers dont offer this facility. This means you are at the mercy of the high street bank again as your position for negotiation is diminished, as to transfer the money to the bank with the best rate could well mean having to open another account elsewhere. If the broker can only wire money in USD you will be slapped with another charge by your bank to transfer the money again back to GBP.

Word to the wise (lesson I learnt) - think about hedging your exposure to USD falling through the floor if your account is significant. I've lost quite a bit over the years when I think about it. Its surprising how much it all adds up!

 

[timcannell]

Many thanks BBB, awoodj and ardhill - I have just phoned HSBC and their spread is 1.8609 - 2.0653 ( 2044 pips ! ). Im going to lose > 5c for every pound this way ( currently trading at 1.9195 ) - on £20K thats £1000. And changing back into sterling is a joke at this rate. What spreads do other people pay currently ? - given that at some point in the future I hope to draw a wage from my account the most important thing to me is a tight spread...

 

[timcannell]

I have just contacted http://www.icnforex.com/ and they will convert my pounds @ 1.8950, at least for £20K worth - given that the rate is currently 1.9169, this is getting on for a 4 cent improvement; this looks pretty good 🙂

 

[MartinD]

tell your bank they suck and see if they will match that rate. I did actually get a decent commercial fx rate from Natwest when i funded my TS account

 

[Sledgehammer]

This probably doesn't help, but:

I funded my broker account (Ffasttrade, part of MAN group) by using my NatWest online to send them GBP to their bank account at Bank of America in London. Usual sort code etc.

I only trade FTSE etc, so my core balance remains in GBP but I rack up commission in USD. That then accumulates over a period of time into a fairly large negative figure, in a column in my statement.

The other day I cleared that, by emailing them. They "bought" USD at 11.00 EST the next day (which is their set time for that procedure), and cleared my USD column, with a reduction in my GBP column. I think they just used the bid price at 11.00. It was 1.9432 and no commission.

All fairly painless.

Maybe TS8 can do the same thing if they have a GBP account in Blighty.

 

[ardhill]

I have just contacted http://www.icnforex.com/ and they will convert my pounds @ 1.8950, at least for $20K worth - given that the rate is currently 1.9169, this is getting on for a 4 cent improvement; this looks pretty good 🙂

I would be interested to know how it goes if you go that route.

Do us a favour and tell us if it went well and was accepted by TS. If they can beat the high street banks and the process is simple enough, then I am sure a few people would be interest in knowing about the service.

Of course, I hope not to need to put any more money into my TS account - it's bring it back home from the US to the UK that would be good to get a decent rate for 😀

Thanks

 

[timcannell]

I just got HSBC to give me 1.90 for £20K -- this is almost as good as icnforex ( 1.9017 ) - current rate is ~1.9250 so Ive gone with my bank for convenience sake

 

[timcannell]

I just got HSBC to give me 1.90 for £20K -- this is almost as good as icnforex ( 1.9017 ) - current rate is ~1.9250 so Ive gone with my bank for convenience sake

... but having said that I did lose £135 closing out the spot forex contract I had already entered into with icnforex. I guess the learning process with real cash starts here

 

[samtron]

Can anyone recommend the best approach for someone resident in the UK to take when a USA broker offers both USA$ and GBP denominated accounts. Would having a GBP denominated account save all the hassle of conversion?