[MartinW]

Some UK banks offer foreign currency accounts, so you can have a UK bank account but in NZ dollars (current or deposit account).

Has anyone taken this approach to converting money ahead of making the move? Would you recommend a particular bank?

Or would we be better going for a NZ bank?

Thanks.

[YouMeAndThree]

Sorry, can't answer that for you. We do however have a £ sterling account with our NZ bank (National Bank), but have never used it ........... yet.

Lx

[2371]

U might want to avoid at any price to do larger transfers from your GBP A/C in the UK to an NZD A/C in NZ as they might kill you once converting the cash, as this exchange would be out of your control.

If the amount is large, you will be in a position to negotiate the exchange rate spread with your bank. So yes, it might be a good thing - to either open a NZD a/c at your UK bank, do the wire transfer in NZD to your NZ bank, or to open a GBP in NZ and wire GBP to NZ and to the transfer there. So, just talk to your bankers on both side of the pond.

BTW, tomorrow NZD will cut the rates by 1% (assembly) so kiwi dollar might weaken on this a bit more…

[victoria24]

BTW, tomorrow NZD will cut the rates by 1% (assembly) so kiwi dollar might weaken on this a bit more…

i love a good exchange rate :)

[Red Devil]

i love a good exchange rate :)

Me too, I'm hoping for 2.85 over the next few days :D

[MartinW]

Maybe we're blazing new ground here :)

From more digging it looks like there aren't that many banks that offer accounts in $NZ (at least not very visibly).

I know Co-op Bank, Barclays and Lloyds TSB do. Probably some others. Although it looks like generally you need to have a £UK current account with that bank too.

Anyone got one?

[Ramo]

Hi Martin,

there are recent threads regarding the conversion of Sterling into NZ$, definitely worth a peek at those.

Out of interest, why would you want to hold NZ$ at a UK bank? I'd be very surprised if the exchange rate was at all competitive exchanging money this way (but don't quote me on that!), as it's not a high volume business for them - unlike NZ banks themselves or specialist FX companies.

Also once you move to NZ, to get access to your money, you'll more than likely have to move the money from your UK to your NZ bank?

I'd be interested on your thoughts as I'll need to move my money soon!

Ramo

[MartinW]

Thanks Ramo, I did see the other threads but couldn't find any discussing UK foreign currency accounts.

Hmm, why?

I'm not sure we want to :)

But that's why I was asking really. For someone in the know re: best accounts, charges, exchange rates, and anything else to watch out for.

We don't have a fixed date to move so we want flexibility, and to move money across in lumps when favourable (to spread the risk).

(We could do that to a NZ account. But my concerns are with time limits on arriving in NZ to activate the account, restrictions on number of transfers, and the ability to transfer money back the other way if we wanted.)

Yes, with this approach you would still need a NZ bank account later. But it would then be a straight bank transfer with no exchange rates involved.

So if anyone has (or had) a UK foreign currency account, please tell us, was it a good or bad idea?

[Steve_B]

I think in theory that this is a good idea as it would allow you to decide when to exchange stirling for NZ$. Hoping for the right exchange rate at exactly the same time you emigrate is probably asking too much unless you're extraordinarily lucky. I remember in 2008 when the rate was $3 per £1 and I felt then that we were probably missing a great opportunity. I spoke to HiFX some time later and it appears that they have no problem in paying your exchanged $ currency in to any account you so desire.

Having said that, what about the interest on those savings....would it be paid in $? If so, then potentially I can see a major problem with bank charges for converting your interest back into stirling. Not a problem if you only have to do this for a few months but any longer and you may see any gains quickly evaporate. Interest probably isn't a major factor now with the UK interest rates being so low but doing it this way does end up asking as many questions as it answers particularly if you don't actually emigrate for another 12 months or so after you've done the currency exchange.

[MartinW]

Having said that, what about the interest on those savings....would it be paid in $? If so, then potentially I can see a major problem with bank charges for converting your interest back into stirling. Not a problem if you only have to do this for a few months but any longer and you may see any gains quickly evaporate.

Hmm, I would have thought interest would just be credited to the account in $NZ. (Not sure why you want to convert it back).

But still hoping someone who knows better than we do happens along soon :)

I talked to my local Co-Op branch. They said they didn't do them. So I pointed out where on their website it says they do... and will talk to their foreign department on Monday.

But if anyone has or had one of these elusive beasts, please do tell?

[Ramo]

Sounds like an interesting conundrum. FYI, I'm going to open an NZ account from the UK (ASB), but it will be a NZ of course. I then have two options to get my Sterling into NZD before I go over:

a) use a Forex company like HiFX or XE.com to convert my Sterling into NZD and then I put it in my ASB account. These type of companies typically offer the best exchange rates since this is all they do - this includes the fees they charge on top of the exchange rate they offer.

or

b) ASB can also open a UK account which accepts Sterling, and you can convert that Sterling directly into NZD and place it into your NZ account. I believe the rates they charge is pretty competitive too - the only downside is that you are charged £30 each time you put some Sterling into your ASB account, so better to put it all in one lump sum (the £30 is bypassed if you put over £20k I think in, in one go)

Both these alternatives above should serve your needs MartinW. The idea of using a UK based account sounds reasonable enough, though my only reservation would be on the exchange rates they offer - which they'll probably gouge you!

Ramo

[IanW99]

...
the only downside is that you are charged £30 each time you put some Sterling into your ASB account, so better to put it all in one lump sum (the £30 is bypassed if you put over £20k I think in, in one go)
...


Close but it is actually "all remittances in excess of £30,000 are exempt from our normal transfer charge of £15."

It should be noted that most transfer companies also charge a "transfer charge" e.g. XE.com it's £10 (approx) and Transzfers.com it's £7.

One thing that I like about using the services of your own bank e.g. ASB is that your money is kept in one of your own accounts all the time and should there be a problem then it is very easy to sort out. If you do use an intermediary then it can make any problems a little bit more stressful especially if they both pass the buck so to speak.

Ian

[MartinW]

FYI, I'm going to open an NZ account from the UK (ASB)...

....


Both these alternatives above should serve your needs MartinW. The idea of using a UK based account sounds reasonable enough, though my only reservation would be on the exchange rates they offer - which they'll probably gouge you!

Ramo

We may well go the same route in the end. Just not sure yet if the concerns I mentioned in my earlier post are an issue or not, i.e.

"... my concerns are with time limits on arriving in NZ to activate the account, restrictions on number of transfers, and the ability to transfer money back the other way if we wanted."

According to ASB:-

The money in your New Zealand account will not be accessible until all parties have been formally identified in person at the appropriate branch in New Zealand.

That would be the same eventually on moving money to NZ from a UK foreign currency account. But until the point funds seem far more accessible?

[Ramo]

I guess in the eventuality that you don't ever arrive in NZ, then having your NZD in a UK bank account would be advantageous. Though given the relative state of the UK banking system against NZ banks, you're taking a small gamble on any UK bank.

Good luck on whatever route you decide to take :nice1

[James 1077]

I looked it at as part of my idea to convert our pounds into dollars but keep them offshore so that the interest was tax-free.

I know that one of the Irish Banks has an Isle of Man tax-free account in NZ dollars with similar NZ Dollar interest rates.

I couldn't see the point of doing it with a UK based account though as then you have to go through the effort of claiming tax back from the UK and still have to pay some withholding tax as well.

In the end we decided that it wasn't worth the bother so have transferred the money to our NZ account.

But if we were still in the UK I would look into it further.

[Ramo]

I couldn't see the point of doing it with a UK based account though as then you have to go through the effort of claiming tax back from the UK and still have to pay some withholding tax as well.



I actually called the Inland Revenue recently and it's possible to get a form from them, filled in and passed onto your bank, which will stop the Bank taking tax from you bank account. However, according to the IR guy, this is not mandatory for the Bank to do this, so it's a bit hit and miss!

As for withholding tax, as it was explained to me, you still get your tax free allowance of around £6.7k before you start paying any tax (assuming you're a UK citizenship) - but remember this comes from all sources of income from the UK, even if you're not resident here.

Ramo

ps the guy at the Inland Revenue was amazingly helpful over the phone. If you have any tax queries, I wouldn't hesitate giving them a call! Big thumbs up for their service :nice1