Best Option for an International Student

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1

Hello!

I am an International Student moving (very) soon to the UK and I am hoping to bank with Monzo, as I have heard a lot of good things about it from friends and family. I am a dual UK-US citizen, so I shouldn’t have any issues with accounts in that regard, but I am struggling with the best option for international transfers. My primary issue is that the majority of the money I will be using to pay for tuition and rent is based out of the US (and in USD). After reading several threads on this community board (and others on Wise, etc) it looks like I have a couple of options to try and minimize my fees:
-Create a UK Monzo account in GBP, and transfer money through Wise when necessary.
-Create a UK Monzo account in GBP, and another bank account that does accept international currency transfers (I heard NatWest being mentioned in a thread).
-Create a US Monzo account in USD, keep all of my money in USD and take advantage of Monzo’s no-international-fee card to convert money at the moment I spend it.

I was hoping to gain more insight into the pros and cons of some of these options (or other options that I may have missed). I have attempted to do my own research, but getting concrete numbers on the fees can be somewhat difficult. This means that I can’t do the math as easily on things like the cost of constantly transferring small amounts of money vs occasionally transferring more.

Thank you all so much for your help!

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Monzo is a good option for your UK Inbound and outbound domestic transfers and general spending.

For International Transfers I would recommend the HSBC International Student Account.

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I would definitely do this, though I wouldn’t transfer lots of small amounts, I’d use Wise to transfer a chunk of money into your UK Monzo account, use it, and then do another transfer when necessary. Wise is really slick, easy to use, and gives excellent rates. It can pull money directly from your US bank account and transfer into Monzo instantly. And you get US account details if someone in the US wants to send you money.

For day-to-day spending, having money in your UK Monzo account is best. It makes it easy to transfer money to friends if you’re splitting costs on something, you can set up direct debits, and a standing order for your rent (or direct debit for that too if they require it).

I suspect this will be more expensive than using Wise. Wise’s rates really are hard to beat, and coupled with the fact that the website and app are easy to use, and it all happens instantly, I personally wouldn’t go this route. Also, the UK Monzo account can receive international currency transfers, so you wouldn’t need a separate account if you decide to go this route.

I definitely wouldn’t do this. It’s much more useful to have a proper UK bank account for reasons mentioned above (transferring to/from other people, bill payments, direct debits, etc). Also, if you had a US Monzo account and lost your card/it gets stolen or damaged, they would send it to your US address. I think this would be more hassle than it’s worth, and the savings would be minimal. For instance, right now to get £1,000 using Wise would cost you $1,325.83 and if you spend the same amount on a US Monzo card it would cost you $1,318.40. So having a US Monzo account and card would theoretically cost $7 less, but I think you will end up with issues that are a lot more ‘expensive’ by not having an actual UK bank account when living here.

(You can check what a Wise transfer costs and compare with the MasterCard rates Monzo uses for its debit cards.)

I’m curious why you would recommend this @mastercardnevervisa? Looking at the page on HSBC’s website, the only advantage seems to be that they are more likely to accept non-UK citizens than with a normal student account. They don’t mention anything about free international transfers, and using the debit card abroad costs 2.75%, withdrawing cash abroad costs 4.75%!

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Wise is the way to go. To transfer USD in, it’s a US domestic transfer i.e. no international charges.

You can convert in Wise to GBP fairly cheap and I’ve heard of people using it as a UK account.

Other plus point is that you can open it in the US now i.e. no UK proof of address required. For any UK accounts, you’re going to need a UK proof of address, but your UK uni will be able to sort that for you.

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You will find that many UK financial institutions will not want you as a customer as you are a US citizen - even though you are a dual national.

This has been the case, ever since the Americaian government passed the Foreign Account Tax Compliance Act (FATCA).

It is easier for many financial institutions to avoid having any US citizens (including dual nationals) as customers then to comply with this law - which is one reason HSBC might be a good option as they operate in both countries and you can usually open an account before you arrive in the UK.

As a side note, you also still have to file annual tax returns with the IRS despite living overseas.

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I’m not sure where things are currently at with Wise, but getting a USD account set up with them hasn’t been simple with folks being put on a waitlist.

I get RSUs so have to deal with incoming USD fairly regularly. For my latest vest I used HSBC Global Money rather than Wise. It was fairly straightforward and the costs were very close to and sometimes beat Wise, so that’s definitely an option that should be on the table.

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This is true but isn’t an issue with mainstream banks specifically (including Monzo & Starling) which are set up to deal with this as part of their standard processes.

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Thank you for the breakdown. I was leaning towards using Monzo+Wise, and it’s great to know that there are aren’t any critical unforeseen issues with this plan. Those hyperlinks in the article were great in directing me to where I can find further information. The points about direct-debit going through Monzo was also something I hadn’t considered, and it brings up some good points.

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I hadn’t realized that being a dual citizen might make UK institutions unwilling to bank with me, thanks for pointing that out. I am aware that I am required to file taxes through the IRS despite living abroad, but are there other significant financial responsibilities beyond that?

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Thanks for making me aware of this. From what I understand, Wise and Monzo are partnered in some respects to streamline the process of transferring money. Is there a significant increase in difficulty in transferring between other institutions like HSBC and Monzo, rather than Wise?

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Not that I am aware of - though it is also worth noting that some tax free accounts in the UK like Individual Savings Accounts (ISAs) are not recognised as such in the USA.

You may want to check some UK/US expat forums.

No. You will find the UK banking system substantially more advanced than that in the US with same day/immediate payments being standard and much less reliant on cheques…

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They are to an extent, but I’d absolutely recommend just downloading the Wise app and dealing with them directly rather than via a third party (Monzo).

It’s funny because the entire concept of Cashapp and similar services literally doesn’t exist here because it’s widely accepted that standard money transfers even between banks are free and instant.

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Also worth noting that there are specific student accounts which offer a range of benefits. Your uni will have a page for international students covering that and similar issues.

What uni are you going to?

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Interesting service, I hadn’t come across them before. However it’s completely unsuited to @DylanM’s needs, as Atlantic Money only supports sending from the UK or EU and the sending currency has to be GBP or EUR. @DylanM needs to send from the US with sending currency USD (to be received in the UK in GBP).

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I was just about to highlight Atlantic money too - Anything over roughly £600ish, it becomes better value to use Atlantic Money as they charge a £3 flat fee. For anything under £600ish, I’d use Wise. they have a helpful calculator on their website which transparently shows how much their service costs vs competitors (Mainly Wise as there is some beef between these 2 companies). But definitely don’t do any FX transfers through a major bank, they will crucify you with fees!

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Thanks for pointing this out. As I understand, many currency transfer services based out of the UK focus on compatibility with the Euro, and other European currencies. That’s one of the primary reasons I leaned towards Wise. I will still give the service another look though!

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I’m studying at Cardiff University, through the International Study Center. I didn’t see specific options available on the site, but I hadn’t fully considered that they may present special options.

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My son is at Keele and they have a bunch of stuff on the website specifically for international students. Other son was born in France so quite often gets pointed towards that information re university.