USD account in UK: Which is Right for Your Business?
If you are considering opening a USD account in the UK for your business, you might have a need to:
- Facilitate payments from your US-based clients,
- Pay your overseas workforce or suppliers,
- Test the market without committing to setting up an office in the US,
- Hold a separate balance to mitigate currency fluctuation risks,
- Or have other related requirements.
In all these cases holding a USD-denominated account can be a game-changer for UK-based businesses that deal with the US market. But what exactly are these accounts, and what should you consider before applying for one? Let's dive in and explore the available options.
💡 We understand that this comparison is on a site that competes with traditional banks in the field of international payment services. We aim to give fair and detailed information using our industry knowledge, public data, customer reviews, and feedback from users of similar services. While we highlight our features, encourage you to choose what's best for your financial needs. This content is based on the information as of November 2023.
Market dynamics and current challenges
A recent research conducted by American Express indicates that 51% of UK small and medium enterprises (SMEs) engaging in international business are aiming to explore new global markets within the upcoming year, with the US being a primary target for 20% of these businesses. Despite these ambitious plans, almost half of these companies admit they lack a solid strategy for managing currency fluctuations and the increased costs associated with international operations.
In this context, maintaining a separate balance in USD emerges as a strategic solution. It not only helps in mitigating volatility but also aligns with global business trends that favour quicker payments and a general shift towards lower-fee transaction methods.
What exactly are the benefits of opening a USD account for business?
For UK companies already engaging or just starting business with the US, the benefits of having a US dollar account are pretty straightforward:
Cheaper payments
Payments within the United States can be performed via local payment methods (e.g. ACH, Fedwire) that are much cheaper than standard SWIFT payments. No conversion costs will be applied too. For example, payments at MultiPass start at just £0.50 per payment.
Quicker payments
Local payments within the United States are usually processed within 1 business day, as opposed to standard international transactions that often take up to 7 business days.
Attracting US clients
By providing them with your account details in the US format, you allow your customers to pay you in a way that's easiest for them – in their domestic currency without extra costs on their side.
Currency risk management
By holding a separate balance in USD, the company can avoid the uncertainties and potential losses from fluctuating exchange rates. It can convert the currency to GBP only when necessary and at a time that is financially advantageous.
What options are there?
Foreign currency accounts with traditional banks
Businesses engaged in international trade can benefit from opening a US dollar bank account with one of the traditional banks. These accounts provide a stable platform for managing US dollars and other currencies and are particularly advantageous in reducing the risk associated with currency exchange fluctuations.
However, it's important to note that these accounts are often reserved for high-net-worth businesses and may come with limited support in case of payment issues. While they generally have lower fees for US dollar payments than standard bank accounts, not all traditional banks offer local payouts and account details – it's better to verify these features with the specific bank of your interest. Overall, traditional bank accounts may have higher fees compared to non-bank providers and might not offer the same flexibility in currency options.
Multi-currency accounts with digital banks
Non-bank financial providers often offer multicurrency accounts that allow businesses to transact in multiple currencies, including USD. These accounts are known for their flexibility, often lower fees, and greater accessibility for small and medium-sized businesses, along with quick onboarding and user-friendly online banking interfaces.
They typically provide local account details in numerous countries, simplifying the process of sending and receiving money through local networks. Non-bank providers, while innovative, cannot provide some additional services like high street banks such as interest on foreign currency deposits or overdrafts.
Choosing the best USD account in the UK
Below is a comparative analysis of key features and services of standard foreign currency accounts across the major UK high street banks, focusing on their USD dollar services for businesses. Additionally, the MultiPass Global Plan is also included in this comparison.
| General info | Eligibility | Accept businesses from | Account maintenance fee | Dedicated Account Manager | Receiving USD from USA | Sending USD to USA | Other low-cost local payouts |
|---|---|---|---|---|---|---|---|
|
|
UK, EU/EEA, UAE, Singapore, Hong Kong | from £100 / month | Yes | from 0.15% (min $10) | from 0.15% (min $10) | GBP, EUR, USD, CAD, CZK, DKK, HKD, HUF, IDR, INR, MYR, NOK, PHP, PLN, RON, SEK, SGD |
|
|
UK | £60 / year | Yes | £2-£7 | £13-30 | Separate EUR account available |
|
|
UK | £96-£180 / year | only for businesses with over £100k turnover | £6 | from £17 | EUR |
|
|
UK | might vary by turnover; 45p-64p per transaction handling, charged quarterly | No (separate support phone lines available depending on turnover) | £6 (for payments over £100) | £15 | EUR |
|
|
UK | information publicly unavailable | only for high-net-worth customers | £1-£7 | from £0 | EUR, others might be available |
|
|
UK | information publicly unavailable | No | £5 | from £17 | EUR |
|
|
UK | £5 / month | No | Free | Free | Separate EUR account available |
At MultiPass, dollar accounts are inclusive, welcoming businesses from a broad geographic and industry range. MultiPass multicurrency accounts come with local account details for domestic USD transactions within the USA. In addition, local payouts are available in a diverse range of currencies including GBP, EUR, and CAD, among others.
Traditional banks like Lloyds, HSBC, and Barclays tend to have more restrictive eligibility criteria, and sometimes additional security or a certain level of annual turnover. Having a business current account in British pounds is always a requirement. Their monthly fees and costs for receiving and sending USD vary with some charging for incoming transactions and others offering free services For example monthly fee at Lloyds is just £5, while each incoming USD payment might cost £2 to £7. On another side, some accounts come with additional features such as overdraft facilities (offered by HSBC, Lloyds, NatWest) or separate savings accounts with positive interest on foreign currency deposits applicable (offered by Barclays, Natwest, HSBC).
How to set up a dollar account with MultiPass?
The process is simple – just fill out the online form, attaching the necessary company documents. It will take around 10 minutes to complete. Our professional onboarding team will then take it from here and reach out to you in case any additional information is required.
You can open your MultiPass account online, the account opening process is entirely remote. After the account is opened, you will receive not only virtual USD account details but also sterling and euro account details to accept funds quickly and conveniently. The account comes with an instant FX desk, international payments in 70+ currencies, low-cost payments in over 20 markets and business cards for corporate expenses. You will also get assigned a relationship manager to assist with any questions you may have.
How to set up a dollar account with a bank?
- Choose a bank that fits your needs. Consider fees, interest rates, access to local payment networks and other features.
- Check your eligibility. Ensure you meet the bank's eligibility criteria, which may include residency requirements and minimum balance or turnover limits.
- Reach out to the bank. If you already hold a business current account in pound sterling with them, opening a foreign currency account should not be complicated. If you don't have an existing account, you'll need to go through the standard onboarding and know-your-customer procedure for opening a business account.
- Complete the application. Follow the bank's process for account opening, providing all required information and documentation.
FAQs
Can you put USD into a UK bank account?
Yes, you can deposit USD into a UK bank account, but be aware that the funds will be converted into GBP, incurring hidden currency conversion charges. If you frequently handle US dollar transactions, it might be more cost-effective to open a separate USD currency account to avoid conversion fees.
Can I have a US bank account in the UK?
USD accounts in the UK with traditional banks typically do not come with account details in the US format (such as routing and account numbers used by US banks). Instead, they come with sort codes and account numbers as per the UK banking system. If you need to provide US-format banking details to your American customers, you might require an account with a bank that operates in the US or a non-bank service that offers US details for international clients, such as MultiPass.
Sources:
https://www.barclays.co.uk/business-banking/business-abroad/foreign-currency-accounts/
https://www.business.hsbc.uk/en-gb/products/foreign-currency-account
https://www.lloydsbank.com/business/international/commercial-foreign-currency-account.html
https://www.lloydsbank.com/business/product-terms-and-conditions.html
https://www.natwest.com/business/bank-accounts/business-currency-current-account.html
https://santandertrade.com/en/portal/bank-with-us/united-kingdom/payments-and-collections
https://www.santander.co.uk/content/dam/sites/santander-uk-cb/resources/documents/international/international_current_account_tariff.pdf
https://help.starlingbank.com/business/topics/us-dollar-accounts/
https://www.starlingbank.com/business-account/multi-currency/usd-business-account/