13 November 2020

How to Open a UK Personal Bank Account as an American

How to open a UK bank account as an American

Chicken or the egg? That's the perfect description on how I felt when trying to figure out how to get a UK bank account. Banks want your name on bills, but you don't have bills yet. Even the bank I applied to asked for another UK bank account's information to prove my address. What?!

As a newly arrived British resident, I obviously have very little established presence in my new home country. And under a fiancée visa and much irritation to my independent feminist leanings, I'm not allowed to work in the UK and am beholden to Mr. B for the roof over my head, food on the table, and heat in those distinctly British radiators. (My immigration application literally asked not one question about my ability to support myself. They only cared about Mr. B's job, house, and relationship to me. I get it, but I didn't like it. More on that another time.). 

Some financial institutions also required my being in the country for 180+ days before allowing me to be added onto my British partner's accounts. There had to be another much easier way. I'm not money laundering or sending millions of dollars into secret accounts to pay off blackmailers or illicit businesses. I just wanted a simple checking account without exorbitant foreign transaction fees so I can buy Percy Pigs or pay a wedding invoice or two. (Both equally important.)
So I researched, filtered through expat Facebook groups, and googled until my fingers and nerves needed a break. But triumph is here because the answer is yes! An American can open a UK bank account and not have to sign away her life. There is a happily ever after when it comes to becoming British in the banking way.

[As a disclaimer, this article is not touching on anything related to U.S./UK taxes, investments, et cetera as those topics are a whole chapter in of themselves that I have yet to experience yet. This information is only related to simple everyday personal current accounts.]

The Legal Implications of Having a UK Bank Account

Unfortunately being an American will affect your entire immigrant life in other countries forever (unless you renounce your U.S. citizenship), and that includes having a simple British bank account that you use to pay for groceries or utility bills.

Herein enters FBAR, an acronym you must know but probably aren't told about when moving to the UK. FBAR stands for Foreign Bank Account Report, also known as the FinCEN Form 114, and you must complete this form every single year if the total of all of your UK/foreign bank accounts exceed $10,000 USD at any given day in a calendar year. 

Reached $11,000 with UK-made income but then spent $1,500 on car repairs the next month? Yep, you'll have to report. Consistently had no more than $500 all year from some cash transferred from your U.S. bank account? You don't need to file. Opening a joint bank account with your British partner, and it has a USD equivalent of $15,000? Yes, you have to file because that account has an American co-owner. Have one UK bank account that has a balance of $3,000 and a second UK bank account of $8,000? You have to file because the total combined balance of all of your accounts is over the threshold. 

While not originally meant for the everyday middle class American living overseas, the FBAR exists to combat tax evasion. Remember those news stories about millionaires squirreling away money in foreign banks to do illegal things? Yeah, they are why we have to file this form out. 

Unlike your typical tax filings with the IRS, the FBAR is overseen by the U.S. Treasury Department's Financial Crimes and Enforcement Network (FinCEN), a government department you probably had no idea existed until now like me. FinCEN is the one who processes your annual filing, not the IRS.

Thankfully, there are no additional U.S. fees/taxes involved with filing (since, sad reminder note, you still have to file your annual standard federal (and state if relevant) tax return as long as you have American citizenship). The FBAR is just a simple report of your foreign bank accounts' balances. By law due to a transatlantic treaty to make it easier for Americans to open up foreign bank accounts, your UK bank has to report when they have American account holders, so it's prudent to report when applicable to avoid penalties and being on their naughty list. For the most up-to-date information about FBAR, the government website is your best resource.

How to open a UK bank account as an American

What You Need to Open a UK Bank Account

It's not impossible, but it can be a headache to gather up the necessary documents to open a UK personal account, particularly if you have just moved to Great Britain and don't have many bills in your name yet.

Without a doubt, the modern, progressive online banks have paved the way for easier access to banking for all. Before these types of banks came along, it felt like you had to sell your soul on the dotted line to open any kind of money-related account as an American. Thankfully their influence has affected the traditional brick-and-mortar banks, and the process is becoming somewhat standardized on what is needed to open a current account, the UK equivalent of a checking account.

As a non-British citizen, most banks will ask for you to proof your identity and your UK address before they accept your application for a bank account. 

Proof of identity examples can be:
• A U.S. passport
• A UK driver's license
• A UK BRP (Biometric Residence Permit)
• Or anything that is a government-issued photo ID

For proof of address, your evidence must have your name and current UK address together. It can be:
• Gas/electric bill
• Council tax bill
• Water bill
• Internet bill
• TV license bill
• Tenancy agreement (if renting)

Personal Experience: When I applied for a Starling Bank personal account via their app, my HMRC/government-issued Transfer of Residence approval letter was not acceptable (despite Starling stating government-issued/HMRC letters as a proof of address example). Because of my being on a fiancée visa and already needing to add me onto bills for my upcoming spouse visa application, the easiest "proof of address" document for me to acquire was Mr. B adding me to his water utility bill with South East Water. He did this directly in his online account on their website... it took all of 2 seconds!

American-Friendly British Banks

Now which British banks will actually allow an American to even have a UK bank account?  Good news, most do. Not so good news, the application process widely varies, and some banks make it downright difficult. Good news again, you get to choose who you want to bank with as a new British resident! 

Questions to consider before choosing the right bank for you... 

- Does the bank have good customer service (which will be a constant reminder you're not in the States anymore because, bluntly, British customer service is not created equal)? 
- Are accounts easy to access with your preference of banking (e.g., online, brick-and-mortar, multiple convenient locations, traveling abroad, etc)? 
- Does it make the application process clear for American applicants? 
- Does it have a good reputation with other foreign nationals? 
- Does your current U.S. bank have a reciprocal relationship with a UK bank (e.g., this could make opening an account before your UK arrival easier)?
- Are there any related monthly fees for your personal current account?
- Is its application process online or in-branch only?

Banks with an asterisk (*) below mean that the noted bank has overwhelmingly been recommended by fellow Americans in the UK from internet blog posts, community groups, and anywhere else we gather online. 

Online-Only UK Banks for American Expats

• Monzo *
• TransferWise 
• Starling Bank *
• Revolut

Personal Experience: I chose Starling Bank for my first British bank account because it reminded me a lot of my Capital One U.S. banking experiences. Starling is very similar to its competitor Monzo in terms of offerings, but what sold it for me was that I could make cash deposits at any Royal Mail Post Office and have zero travel fees when using the card abroad (no ATM withdraw fees or no transaction fees). Starling also made it rather easy to apply and be approved with exception to the HMRC letter inconsistency. (Double bonus is that Starling is an older woman-founded bank that was built to disrupt a broken banking system in a forward-thinking way.) When the exchange rate is favorable, I also use Wise (formerly Transferwise) to wire money from my U.S. bank account to my UK one. 
If you are needing to transfer your U.S. dollars to your new British bank account, you can get your first transfer free with Wise through my referral link or code chelseal117. A little bonus for both of us!

Traditional UK Banks for American Expats

• HSBC *
• Lloyds *
• Royal Bank of Scotland
• Barclays 
• Santander
• NatWest *
• Nationwide *

How to open a UK bank account as an American

After Your Bank Account Success

One of the best parts about having a UK bank account is the ability to now do free bank transfers. From paying utility bills to paying back friends for a round, bank transfers are a way of life in Great Britain. Since it's not at all a thing in the States, the closest similarity I can compare it to is the concept of Venmo or PayPal, but without the third party service and the associated fees. It's a bank-to-bank money transfer process that will make you question your American heritage and why we aren't doing it back at home. (Especially when your British friend is really confused on why they have to pay you in cash for the communal gift you purchased for the group.) With a sort code and account number, it's literally as easy as giving someone your Instagram handle.

Another UK bank benefit is contactless payments with your debit card (which is way better for pandemic safety in retail stores anyways). American banks tend to always be behind the financial times (at least from what I've experienced in the 15+ years of traveling abroad), and as of now, not every American bank has contactless capabilities embedded in their check/debit cards. Not so here! Contactless is as common as sliced bread. Tap tap away! 

Little Endnote Disclaimer

Like anything else on the internet, please do your research in which British bank is best for you and your needs. Bank reputations, products, and service change for the good and the worse, so use this article as a mere starting point. The moral of this financial story: There is hope. You can find a UK bank when you move here.

If You Wish to Donate a Thank You

I wrote this guide because immigration is complicated enough without adding onto the whole bank account element. Every little helping hand can be a breath of fresh air -- I know I wish I had it! 

It took quite some time to put all of this information together, so if you're able and found this guide helpful for your own journey, treating me to a fizzy carbonated beverage certainly won't be turned away and would be greatly appreciated!

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