I travel to the USA frequently, both for conferences and for business\/meetings. On each occasion, I spend anything from a few hundred dollars to a few thousand (sometimes the hotels are paid in dollars, sometimes part of the airfares, plus all the spending for the duration of the visit).<\/p>\n
Over the years, I occasionally received payment from USA companies, although in the past year this has become more frequent. Obviously, it’s stupid for me to pay the exchange rate premium twice (once in each direction) AND pay commision (twice!) AND pay any bank-specific charges for the priviledge – when I’m actually guranteed to spend those dollars sooner or later as actual dollars.<\/p>\n
I asked my UK bank (Halifax) about opening a dollar account. They claimed to have never heard of such a thing, and had the temerity to open a browswer window and go surfing on Google to try and find out if it’s a service they offer (they offer at least three different services along those lines – Halifax’s head office should probably put a call through to the Brighton branch-manager and ask why they have untrained staff manning the branch at the moment).<\/p>\n
So I went looking into the alternatives myself. The main things I need are:<\/p>\n
<\/p>\n
Cash withdrawal: 3%
\nCash deposit: 3.4% (2.9% if you take > $25,000 per annum)
\nCash deposit own currency: 3%
\nTransfer to other person: free
\nAnnual fee: \u00a32.50\/year surcharge for owning a debit card (the credit card is “free”)<\/p>\n
Total: 6.4%-12.5% + \u00a32.50 per year is taken by PayPal<\/p>\n
Verdict: PayPal is a rip-off. They carefully hide their true overall charges. You should avoid them like the plague. Bear in mind that – in total – that’s one eighth of ALL your money that you’re “gifting” to PayPal in reutnr for, well, nothing really.<\/p>\n
Minimum cash in account: \u00a31500 (NB: their website claims otherwise, but the website is wrong)
\nAnnual fee: \u00a390.00
\nCash withdrawal: 1.5%
\nCash deposit own currency: \u00a310 + 2% (min: \u00a313 fee per deposit)
\nTransfer to other person: 0.25% (min: \u00a313 fee per transfer)
\nTransfer from other person: \u00a37
\nCheque deposit: \u00a32 per cheque<\/p>\n
Total: 1.5%-3.5% + \u00a317 (or more) + \u00a390 per year is taken by Lloyds<\/p>\n
Verdict: as the Lloyds website asks “Why bank in other currencies?” Why, indeed – the bank is going to rape you for all you’ve got, and do its best to take more money from you than your government takes in taxes. It’s also worth noting that although Lloyds has a page dedicated to comparing their service to their competitors, it’s incorrect both about their services and their competitors; generally, I’m used to such false claims being illegal. Oh well. I certainly wouldn’t trust anything else they say having seen that.<\/p>\n
PS: their pre-tax profits in 2008? $3.5 billion. I wonder why?<\/p>\n
Halifax refuses to provide any information on their website.<\/p>\n
Verdict: why do they keep this secret? Would they rather rip you off, and have you find out how much money they’re going to take from you only after you’ve actually paid it (which sounds pretty immoral to me)?<\/p>\n
As noted above, the branches are unaware of their own services, and are effectively useless here.<\/p>\n
Short of snail mail, and waiting months for an answer, the only way you can find out is to phone a pay-by-the-minute premium phone number and go through an automated system. Yes, you have to pay for the priviledge of finding out how much they’re going to charge you. Forget it.<\/p>\n
Annual fee: \u00a3240 (or “free” if you have over \u00a325,000 with HSBC)
\nCheque deposit: \u00a330 per annum
\nCash withdrawal: 2% (min fee $3) (NB: you have to pay this even from HSBC’s own cash machines!)
\nCash deposit own currency: free (I think?)
\nTransfer to other person: \u00a315 (to HSBC bank), \u00a325 (any other bank)<\/p>\n
Total: 2% + \u00a325-\u00a330 (or more) + \u00a3240 per year<\/p>\n
Verdict: HSBC is a major bank in both the UK and the USA. There is no excuse for them double-dipping and charging UK customers punitive fees for USA transactions (e.g. they will charge you to use an HSBC cash machine, in the USA, to withdraw dollars from a dollar account!). It’s particularly amazing that they charge you \u00a315 (approx $20) just to do a funds transfer to anyone else who has an account WITH THE SAME BANK.<\/p>\n
Annaul fee: free
\nCheque deposit: ? (HSBC website refuses to say)
\nCash withdrawal: Unknown, almost certainly “punitively high” (HSBC website refuses to say) + 2%
\nTransfer to other person: ? (HSBC website refuses to say)<\/p>\n
Total: (guesstimate): 5% + \u00a325 (or more) is taken by HSBC<\/p>\n
Verdict: the “Internet Banking” service claims to come with commission-free currency transfers. Except that you won’t be allowed to do cash-withdrawals from an Internet Banking account – and it’s anyone’s guess what they charge. Given they double-dip their own customers on the “intended for people wanting to pay in dollars” account, you can safely assume that the charges for doing payments this way will be high; bear in mind there is an *additional* 2% charge on top of whatever else they charge you.<\/p>\n
I thought that post 9\/11 “open a USA bank account, in the USA, as a non-resident” would be effectively impossible.<\/p>\n
Apparently, it’s more straightforward than most of the existing options for people who already have accounts with their own banks. The only tricky part is filling out W8-BEN forms to do with tax withholding and\/or obtaining ITIN numbers (that the USA government issues to foreign nationals so that they exist inside the USA taxation system).<\/p>\n
If you’re an iPhone developer like me, then this is a pain you have already been through, and you’re something of an expert on it (it’s necessary for any non-USA based new iPhone developers if they want to sell iPhone apps). So, actually, that doesn’t intimidate me.<\/p>\n
Essentially, you just need to download and process the application form here (*full* details on what is required are included inside the form itself):<\/p>\n