In the U.S., we had various bank accounts for different financial requirements. It is incredibly easy to open a bank account. What we didn’t realize was how difficult it would be to open a bank account in the U.K. There are very few foreign banks that will actually allow Americans to open bank accounts. This is because of FACTA (Foreign Account Tax Compliance Act). To summarize, any bank who has U.S. citizens as customers have to generate an annual report on foreign assets held by these account holders to the U.S. government. Typically, only large multinational banks such as HSBC and Barclays are willing to accommodate the additional documentation required.
Based on online reviews, we chose HSBC U.K. HSBC also has local branches in Seattle which meant we could also open up an HSBC U.S. account as well. Since we didn’t know the exact procedure for opening a foreign account, we spent a lot of time just trying to understand how the system works. Had we known, we could have eliminated about 50% of the effort we spent trying to figure out how to open a bank account in the U.K.
Things we learned about opening a bank account in the U.K.
Always make an appointment at least 2 weeks before you arrive in the country. There is no such thing as stopping by the bank to open up an account in the U.K. It takes a bit of time and it will require an appointment. Try to make it for the first business day you arrive. We made the mistake of waiting until we arrived in the U.K. thinking we could stop by the bank or could get an appointment within a few days. We were wrong. It took over a week to get an appointment and that was driving to a branch outside of our town. Without a bank account, you can not get a permanent sim card for your mobile phone, set up internet or utilities, or purchase goods without incurring any foreign transaction fees from your home country debit/credit cards.
Documentation. Make sure you bring it ALL because you will need it. Anything you think looks official, just bring it. Opening an account required us to bring the following: lease agreement (the tricky part is that the bank wants you to prove your address by bringing in a utility statement but you can’t get a utility statement until you have a debit card), passports (including visa), residence cards, proof of employment (make sure you ask the bank what is required on the letter because HSBC was very specific about what they needed on our letter), and really any other legal paperwork that you are carrying with you because you never know. The last thing you want is to not be able to open up a bank account after all the effort you put into getting an appointment.
Plan to spend at least 1-2 hours at the bank. Again, another mistake on our part thinking it would take 30 minutes when in reality it took over 2 hours. They are very thorough which we appreciated. We were also set up for online banking at this time as well. What you will notice is that bank security is much more intense in the U.K. with pin numbers, passcodes, etc. If you have children who need to come because you are new to the country and know no one, bring digital devices, coloring, candy, bribes, whatever will keep them busy in a very boring environment.
Debit and Credit Cards. Once you finally open the account, it will typically take another 3-7 business days for them to send out the cards. Your pin will arrive separately. You need a pin to use your debit card in the U.K. A mistake we made when we eagerly tried to go get sim cards and handed over our debit card without knowing our pin.
Checks. We ordered one set of checks. We haven’t written a lot of checks in the U.K. as you can direct deposit money into people’s account but there has been the occasional time when we have needed to use them.
Exchange Rates: HSBC does not charge a “fee” for transferring money between accounts. Be aware though that most banks do not give you the mid-market rate for exchanging money. That is how they make money from you. Make sure you compare the exchange rate they are offering with the mid-market rate. Transferwise has really good reviews for their all around low commission charge.