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I am planning on starting my studies in the UK later this year and I will spend roughly three years there (possibly staying on to find work). I would like to open a bank account in the UK from my country of residence, New Zealand, before I leave so my only option seems to be HSBC.

My question is similar to How to open up your first UK bank account without proof of address?, but the issue is that my studies will mainly be funded by a bunch of small scholarships. The relevant organisations will pay me lump sums every year or half-year across three years into a NZ bank account only.

So this forces me to move from my current bank to an HSBC account in both NZ and the UK in order for me to access my funds. It seems like a complicated and expensive process, and I was wondering if expat NZ students have any advice for me such as ... other simpler options, and if you have used them, Travelex and 1stcontact.

  • Can you clarify why you want to open the UK account before you arrive? And also why you can't just use one of the numerous good online currency brokers to move your funds at low cost + low spread from NZ to the UK? – Gagravarr Jan 9 '15 at 8:13
  • @Gagravarr: I thought that it may be more convenient to do this before moving so that I wouldn't have to carry around so much cash while waiting for my UK bank account to be set up. Also, could you please give a few examples of trustworthy and economical online currency brokers for my purposes? – Medulla Oblongata Jan 11 '15 at 19:04
  • Not sure why you'd ever carry more than about 2 days worth of cash around - just withdraw it as needed from a low-FX low-fee card until your UK account is setup. (Will answer the rest later) – Gagravarr Jan 11 '15 at 22:09
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I'd say you're going about this the wrong way!

Even if you did have both GBP and NZD accounts with the same bank, moving money between them isn't "free". All banks I know of offering multi-currency accounts charge a fee or a spread somewhere. Quite a typical rate is about a 3% spread on the currency conversion when moving between the accounts, which is low but non-trivial.

As Gayot pointed out in his answer, it's pretty much impossible to get a regular UK bank to open you an account remotely. You might be able to open a GBP account with your NZ bank, using your New Zealand details, but you'd likely have monthly fees for such an account, plus the spread moving money into it. Some high end (especially offshore) bank accounts might be openable in GBP with only your New Zealand details, but these will certainly have high monthly fees.

Instead, what you should do is just plan to open a regular free GBP account on arrival in the UK. See the How to open up your first UK bank account without proof of address? question for details on how to do that as a new arrival.

Then, before you leave, do two things. Firstly, get yourself a NZ credit/debit card with the lowest overseas fees you can. I don't know the NZ market well enough to know if a "no overseas fee" card is possible (they are in the UK), but get the best you can. You will use this to spend money until your UK account is open. Secondly, open an account with a reputable low fee online currency broker, and setup whatever you need to do to send it money from your NZ account. (If your bank needs to ring you to confirm new online payments, that's much easier to do when in NZ than when you've got to the UK!)

Finally, when your UK account is open, use your currency broker to send + exchange your NZ Dollars in your NZ Account to GBP in your UK account.

In terms of online exchanges / currency brokers, you need to consider a few things. Firstly, reputability and stability - you don't want to wire them money and have them go bust before they exchange + forward! Pick somewhere based in a country with regulations, and someone who's been around a while. Secondly, decide on how often you'll be sending money, and how much. Some brokers charge tiny/no spread on the exchange, but have a fixed fee to send the exchanged money on to the destination bank account. Some charge low spread, but have a variable/% fee on transfers out. Some are poor value and charge high fees for both!

If you're transferring lots rarely, someone with low/no spread on the exchange and moderate onward transfer fees is a good bet. If you're transferring little and often, find someone with % fees which work out less. There's no universal right answer, it'll depend on your situation. (As an example, I've had good service from CurrencyFair, but for small amounts withdrawing cash on a no-FX card when in the destination country has worked out cheaper other times)

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Proof of address is one of the requirements to open a UK bank account. The rules are laid down by the Joint Money Laundering Steering Group, which reports to the Financial Conduct Authority (FCA), which in turn reports to the Home Office. The FCA regulates both wholesale and retail banking.

Invariably, this requirement causes the most frustration for newly arrived immigrants, and admittedly the conditions are fuzzy. Generally, documents meeting this requirement will show the following characteristics:

  • The document is system generated, although tenancy agreements and/or correspondence from a solicitor can also be accepted; also correspondence from an agency in the UK government, such as HMRC can be accepted;
  • The document has a date and is current, usually issued in the last 6 months, but shorter periods may apply in some cases, a TV license for example;
  • The document shows the same name and address as given on the bank account application;
  • The document is from an acceptable source and clearly shows that the person has an account or customer identification registered in their name;
  • The document is not a bill for a mobile telephone; and
  • It is not the same document presented as proof of identity.

There is no discretion on the proof of address requirement. Some banks may want to see heating and electricity bills to see if consumption is in line with a resident. There's more info in an article I wrote on the topic which is here http://www.londonelegance.com/transpondia/other/forms-of-identification

Note that in 2015 they are rolling out the new landlord requirements for immigrants seeking tenancy agreements, so this may make getting a tenancy agreement more difficult. See this for more info.

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