If you live in the UK you cannot fail to have noticed that the pound has not been doing very well lately. It seems every time Theresa May makes a speech regarding Brexit our currency goes into free fall. There are lots of uncertain times ahead. As a result my husband and I started thinking about whether there could be any alternatives to holding all our money in Sterling. In this post I’ll share what we found out about holding Dollars, Euro, or any other major currency of your choosing within a UK based bank account.
Poorer for having Pounds
Our feeling was that having all our money in pounds may not be the best idea. The pound has already hit record lows in recent weeks. It may bounce back, but equally it may continue to plummet.
Travelling is something that is important to us. As well as visiting family and friends who live abroad, we want our little girl to be able to experience different cultures. We were concerned we would not be able to do this in the future because our money would be worth diddly-squat abroad.
We decided to look into what options were available for us to hold money in other currencies. Unfortunately there weren’t very many, but we did find a way…
The other options: $, €, ¥…
Eventually we came across the currency accounts offered by HSBC. They offer accounts in 14 different currencies. Your money is held within the UK so you have the same UK protection laws as normal bank accounts. The only proviso is that you have to have an HSBC current account (excluding their basic bank account) as well as the currency account. You can open one if you don’t have one already.
We decided to go ahead and open a currency account in Dollars. We chose Dollars over Euro because Dollars are used worldwide and the currency is more stable. Even Donald trump being elected as president barely caused a flutter in its value.
Opening the account
An appointment at the bank enabled us to get everything sorted within an hour. I just had to take along my passport and proof of address. The assistant at the bank got me all set up with online banking in the same appointment. The only thing I found difficult was thinking up endless different passwords for all the security!
In order to transfer money into USD we had two options. The fastest way was to transfer the money from my HSBC current account into the Dollars currency account using HSBC’s conversion rate. However, we were able to get a better rate by using Revolut to convert GBP to USD, then transferring the Dollars directly to the HSBC currency account. Revolut allow you to securely convert your money at a near perfect exchange rate.
Was it worth the effort?
We certainly felt our efforts had been worth it as we watched the Pound take yet another nose dive recently. It gave us reassurance that at least some of our savings were actually going up in value instead of being depleted.
Our plan is that if we want to go away in the future and the value of the Pound makes it expensive to do so, we will use our USD to buy things while abroad. Although the currency account does not come with a card I can transfer the money back to Revolut for a £4 fee. My husband can then use his Revolut card to spend our Dollars as we would with a normal debit/credit card.
Do you need to use Revolut for withdrawals?
Having a Revolut account is not essential to using the HSBC currency account. We just use it to get the best exchange rate. The simplest way to withdraw money from the currency account is to transfer it to the accompanying HSBC current account and let them convert it.
The withdrawal/transfer is free if you do it within HSBC, but their rate is not as good as Revolut. That means that if the amount of money we are withdrawing is large enough, the £4 fee is worth paying because it would cost us more than £4 by exchanging via HSBC’s rate.
Are their any other benefits to having a bank account in Dollars?
Another way I was hoping to use the HSBC currency account was to be able to pay into it the Dollars which I earn from website testing and web search evaluation. My idea was to transfer the USD I had in my Paypal and Payoneer accounts straight into my Dollar currency account.
Unfortunately both companies make it impossible to transfer USD to a UK bank account without converting it to GBP, even if the UK bank account’s currency is USD. I have found this really frustrating and had a lot of arguments with the respective customer service teams.
How I minimise Paypal/Payoneer’s robbing of my earnings
For now I just have to live with the fact that it is not possible and keep my money within Paypal/Payoneer, or accept their crummy exchange rate in order to transfer it out as Pounds. Naturally they like to help themselves to a decent chunk of the money for the privilege of doing this. With Paypal I just leave it in my account until I find something in Dollars I can spend it on.
With Payoneer, I divert any incoming earnings in USD straight to my normal GBP bank account as I don’t have any means of spending money I hold within my Payoneer account. This avoids an extra £3 transfer fee that I would have to pay if my money was paid into my Payoneer account and I withdrew it as a separate transaction. I’m really not a fan of the way Payoneer work, but they are the only payment method Appen offer.
Thank you for reading!
We have tried to think outside the box when it comes to the way we hold our savings. The currency account has given us a bit more of a feeling of security for some of our money, but still allows us easy access to it if we need it. I hope you have found this post useful and maybe you might consider doing the same. if you have any questions about the HSBC currency account, or Revolut, and our experience of using them please feel free to comment below.