Andy M. asked: ‘How could one transfer approximately $100,000 in British Pounds (in London) into a US dollar denominated bank account (in NY) at the least expensive rate? I can’t find any way to do it that doesn’t cost an arm and a leg. Lloyds bank, for example, offer me a $1.76 exchange rate when the actual spot rate of the $ / GBP is close to $1.86! I figured your readers in their brilliance might have a suggestion for how people do this.’

In your brilliance, you replied:

Jay Glynn: Two options for transferring the $100,000: 1) Have both a sterling account and a dollar account at Citibank in London. They quote competitive spot rates for transfers. 2) Alternatively, Citibank Global Transfers allows the instant transfer of funds between Citibank accounts, even in different currencies. I transferred a small amount (less than $1,000) from dollars to pounds in early February and got a rate of $1.861. The spot rate was around $1.83. The English banks are notorious for ripping off retail customers for large transfers. They tend to have a higher minimum transfer to qualify for spot rates. The American banks are more reasonable.’

Jack Kouloheris (ever ingenious): ‘What about this: Avoid the banks. Use the pounds to buy some stable, highly liquid security for which the spread and daily movement will be limited (Treasury money market shares?), then journal the shares over to a US brokerage account and sell. Deposit in a US bank.’

Paul: ‘I live in Switzerland and would like to know of any good answers to Andy M’s question. The best I’ve heard of so far for doing a transfer from Europe to the US is the following I saw on a Swiss consumer bulletin board:

24-Jul-03 Keith kwpinwdc My partner and I had the same problem, as bank fees were becoming way too expensive to transfer money to/from the States. But we’ve found a free method that’s completely electronic. . . . Sign up for Paypal. This works best if you have electronic banking with both your Swiss and U.S. banks. There are a few steps to get started [grayed, because most readers will skip them]:

Sign-up as a Swiss resident (, using your Swiss address. You will then need to add the details of your Swiss bank account. Important: Choose the option for a Personal account, not the Premier account. With the Premier account, you can earn interest on your Paypal balance and you get an ATM/debit card, but then you will also be charged a % fee on all funds received. There are no fees with the Personal account.

Additionally, add the details of your United States checking account. Paypal will deposit two small amounts into your checking account (like 49 cents and 23 cents for example). This is how they verify that you are the account owner. You then login to Paypal and enter these amounts from your statement (easier if you have online access to your statements) to have the account included.

Your Swiss address needs to be verified in a similar manner. You have to have a Swiss credit card and a small amount is credited to the credit card. Once you have this amount from the statement, you enter it online to become verified.

You can then add funds to your Paypal account from either your U.S. or Swiss bank accounts. It’s a bit easier from the United States account. All you have to do is choose to add funds from the account and the funds will appear in your Paypal account within 2-3 days. To add funds to Paypal from the Swiss account, you will need to order a bank transfer from the Swiss Account to the Paypal bank account (which is Bank of America in Geneva). You have to enter a unique code into the memo section of the transfer to be sure they can credit the correct Paypal Account. This code is generated on Paypal when you request to add money from a Swiss account. We do the transfer online through our bank (Basler Kantonalbank) and the transfer is free of charge.

Once you have funds in your Paypal account, you can add them to either your Swiss or U.S. bank accounts. The funds will be transferred within 3-4 days. So the money transfer works either direction. There is a 50 cent charge to add money to a Swiss bank account, but it’s free to add to a U.S. account.

So, it takes about 5 days to get money from one point to another, but if you’re not in too much of a hurry, there are no fees (other than 50 cents). And the exchange rate that Paypal uses is the same, if not better than any bank’s.

Brad Hurley: ‘A couple of friends of mine have reported good experiences with the online currency exchange service XeTrade. However, my brother found the best way of all to convert pounds to dollars. A few years ago, when my brother was trying to lose some weight, his boss came up with a plan: instead of giving him a end-of-the-year bonus, he offered my brother $20 for every pound he could lose during the year. If he gained the weight back, he’d have to pay back the money. My brother lost 40 pounds and kept it off, and made $800.’

Tomorrow: Betting on Bush


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