What's the best way for a Brit to cash royalty cheques?
November 22, 2011 6:43 AM Subscribe
I'm British and live in the UK, but get paid royalties by US companies (in the order of thousands of pounds). Some wire me the money but others give me cheques, which can take months to cash if the bank is being difficult. What are my most sensible options for getting money from the US?
I have the tax situation sorted out. That's not an issue. It's just about getting money from the US to the UK in the cheapest and most effective way.
I have the tax situation sorted out. That's not an issue. It's just about getting money from the US to the UK in the cheapest and most effective way.
Either (1) get them to stop giving you cheques (remind them that it's not 1986 any more, which may help), or (2) complain or get a better UK bank (a US cheque should take a couple of weeks to clear, not months), or (3) open a dollar checking account at a US bank, deposit the checks you receive in that, and wire the money to yourself.
posted by caek at 6:51 AM on November 22, 2011
posted by caek at 6:51 AM on November 22, 2011
Response by poster: But don't most US checking accounts come with a monthly fee for British people?
posted by humblepigeon at 7:11 AM on November 22, 2011
posted by humblepigeon at 7:11 AM on November 22, 2011
I don't have experience with this personally, but an account like the Currency Savings Instant Access account at HSBC might help. Looks like there's a £5 or currency equivalent monthly fee.
posted by exogenous at 7:13 AM on November 22, 2011
posted by exogenous at 7:13 AM on November 22, 2011
Direct transfer to your bank (find a bank with a good rate for this), or get them to send the money via MoneyBookers. They have good rates/low fees.
posted by devnull at 7:21 AM on November 22, 2011
posted by devnull at 7:21 AM on November 22, 2011
Don't accept cheques ... wire transfers only. Or charge a cheque premium for the inconvenience.
posted by jannw at 7:58 AM on November 22, 2011
posted by jannw at 7:58 AM on November 22, 2011
Wire transfer is the most straightforward option. Have some companies refused to do that?
Is it because they are too big and bureaucratic or too small and intimidated by wire transfers?
If they're too big I'm not sure what your options are. Wire transfers are pretty simple. If they're too small and intimidated, maybe you could use Paypal? It'll take a big chunk of the money, but it'll be quick.
posted by alms at 8:00 AM on November 22, 2011
Is it because they are too big and bureaucratic or too small and intimidated by wire transfers?
If they're too big I'm not sure what your options are. Wire transfers are pretty simple. If they're too small and intimidated, maybe you could use Paypal? It'll take a big chunk of the money, but it'll be quick.
posted by alms at 8:00 AM on November 22, 2011
My understanding is that a dollar-denominated account at a UK bank (such as those offered at UK branches of HSBC and Barclays) won't help clearing cheques drawn on US banks by speeding it up or avoiding clearing fees (although obviously it avoids/postpones currency exchange losses)
posted by caek at 8:12 AM on November 22, 2011
But don't most US checking accounts come with a monthly fee for British people?Possibly, but you're talking about thousands of dollars and months of delay.
posted by caek at 8:12 AM on November 22, 2011
Response by poster: caek, are you saying that an dollar account at HSBC, as mentioned above, won't actually speed-up cheque clearing or avoid charges?
posted by humblepigeon at 8:22 AM on November 22, 2011
posted by humblepigeon at 8:22 AM on November 22, 2011
Citibank's US dollar accounts clear in New York with an ABA routing number (as explained here [pdf]) which cuts down a bit on the delay. I think HSBC might do the same, but that's not necessarily going to speed things up on the cheque side. This previously is from 2007, but might be worth following up for Smile and/or FirstDirect, the latter of which is part of the HSBC behemoth.
posted by holgate at 8:27 AM on November 22, 2011
posted by holgate at 8:27 AM on November 22, 2011
How flexible are these folks who are paying you? I'm assuming that since they won't do wire transfer/ACH that they won't be too flexible about where they deposit the checks either. Is that not the case?
If you have to accept checks and you have to accept them sending them to you in the mail then any solution needs to deal with the fact that you have the checks in your hands, making deposit by mail to a US bank an exercise in even more delay, correct?
In your shoes I think my first stop would be to look for US banks with deposit by photo/scan. My bank, USAA, is targeted at people who will be doing their business remotely (they barely have branches) but their electronic deposit is limited to their top-tier of customers who have military connections. So unless you have immediate family in the US military that does you no good.
This supposedly antiquated page lists places that do check scanning and it links to this replacement page. A lot of the listed banks are actually credit unions which are required by law to have some sort of membership constraint; I don't know if that necessarily rules out non-US citizens but it does make me wonder whether you should be looking at stuff associated with journalists, electronic or otherwise. I don't see any CU listed on the SPJ membership page but who knows what's out there?
My gut instinct is that stuff offered by places like Schwab are going to be the best bet since they're more likely to be world-focused than a regional bank with branches.
If you can cope with some more mail delay and USAA will take non-US members then I can't recommend them highly enough. They're also set up to take deposits by mail and are well experienced with it. Their postage paid envelopes aren't going to do you any good outside the US but if any of those operations paying you were flexible you could get them to just mail them directly to the USAA. They also have the upside that they're accustomed to dealing with people who are living full-time outside the US.
posted by phearlez at 8:30 AM on November 22, 2011
If you have to accept checks and you have to accept them sending them to you in the mail then any solution needs to deal with the fact that you have the checks in your hands, making deposit by mail to a US bank an exercise in even more delay, correct?
In your shoes I think my first stop would be to look for US banks with deposit by photo/scan. My bank, USAA, is targeted at people who will be doing their business remotely (they barely have branches) but their electronic deposit is limited to their top-tier of customers who have military connections. So unless you have immediate family in the US military that does you no good.
This supposedly antiquated page lists places that do check scanning and it links to this replacement page. A lot of the listed banks are actually credit unions which are required by law to have some sort of membership constraint; I don't know if that necessarily rules out non-US citizens but it does make me wonder whether you should be looking at stuff associated with journalists, electronic or otherwise. I don't see any CU listed on the SPJ membership page but who knows what's out there?
My gut instinct is that stuff offered by places like Schwab are going to be the best bet since they're more likely to be world-focused than a regional bank with branches.
If you can cope with some more mail delay and USAA will take non-US members then I can't recommend them highly enough. They're also set up to take deposits by mail and are well experienced with it. Their postage paid envelopes aren't going to do you any good outside the US but if any of those operations paying you were flexible you could get them to just mail them directly to the USAA. They also have the upside that they're accustomed to dealing with people who are living full-time outside the US.
posted by phearlez at 8:30 AM on November 22, 2011
Best answer: Your best bet is probably Citibank UK, which says it will clear most US cheques immediately: http://www.citibank.co.uk/personal/banking/customerinfo/usingyouraccount/movingmoney/deposits.htm?merchant=citi
The background to this is that there are two ways that UK banks clear foreign currency cheques. One is by collection, meaning they get the payment from the foreign bank and pay it on to you. That can take weeks or months.
Otherwise, they can clear by negotiation, which means that the funds are credited to you within days, but on a recourse basis - so if the cheque is dishonoured, they reserve the right to withdraw it from your account again.
Some banks are much better about using the second method than others. And even at those that will usually use negotiation, I believe some cheques will randomly (allegedly) be sent for collection for security purposes.
Personally, I use HSBC and can never remember them taking months to cash a US cheque, but I almost invariably get paid by transfer - other people who cash cheques regularly have had different experiences.
Incidentally, if you want a USD account to save on conversion costs, I think (but am not sure) Citibank offer one with no monthly fees.
Obviously, trying to move all clients to paying by transfer reduces the risk of the cheque subsequently bouncing when you've already counted on it being good and spent it.
posted by Temagami at 8:40 AM on November 22, 2011
The background to this is that there are two ways that UK banks clear foreign currency cheques. One is by collection, meaning they get the payment from the foreign bank and pay it on to you. That can take weeks or months.
Otherwise, they can clear by negotiation, which means that the funds are credited to you within days, but on a recourse basis - so if the cheque is dishonoured, they reserve the right to withdraw it from your account again.
Some banks are much better about using the second method than others. And even at those that will usually use negotiation, I believe some cheques will randomly (allegedly) be sent for collection for security purposes.
Personally, I use HSBC and can never remember them taking months to cash a US cheque, but I almost invariably get paid by transfer - other people who cash cheques regularly have had different experiences.
Incidentally, if you want a USD account to save on conversion costs, I think (but am not sure) Citibank offer one with no monthly fees.
Obviously, trying to move all clients to paying by transfer reduces the risk of the cheque subsequently bouncing when you've already counted on it being good and spent it.
posted by Temagami at 8:40 AM on November 22, 2011
Best answer: I am in the same position -- as an author, around 70% of my income comes from overseas markets, mostly paying royalties in USD via cheque or wire transfer. (Simplified slightly by going through a US literary agent who will merge payments on request.)
In general, US-UK wire transfers seem to cost around USD 30 a pop, so are not recommended except for large or urgent transactions.
For small transactions (under $100) Paypal is fine, however the exchange rate they offer is dreadful. Send more than $200 via Paypal and you're probably handing them a 2-3% commission.
Cheques ... British banks charge to deposit foreign currency cheques. They can be deposited in a Sterling bank account via Negotiation or Settlement (more on this later) or in a US dollar savings account. Charges are higher for transactions that involve currency conversion, so my current strategy is to throw everything at a Barclays US dollar savings account, and periodically transfer a tranche across into my regular sterling Everyday Saver account.
Depositing cheques:
Settlement is the process by which a cheque is sent to an international payment processing centre, couriered in a batch to the originating bank (along with a bunch of other cheques), then settled via a bulk wire transfer to the receiving bank (along with a bunch of other cheques) and the funds finally transferred to the target account. Settlement can take 4-8 weeks, and the funds finally clear into your account at the exchange rate that was in effect on the day the wire transfer was received by your bank. Settlement fees are fairly low (there's usually a floor of around £2, then a percentage commission based on the transaction, up to a ceiling of around £18; it's always cheaper than a direct wire transfer in my experience).
Negotiation is a facility that the bank may provide for customers on request. When you deposit a foreign currency cheque for negotiation they deposit an amount equal to the cheque at the current exchange rate into your account immediately, then send the cheque for settlement. Some weeks later, if the exchange rate has fluctuated in the mean time and the amount received for your cheque is different from the amount initially credited, they may make a balancing withdrawl/deposit to your account. Usually negotiation isn't available for cheques over about $250 unless you arrange a special negotiation limit with your bank; and there may be a higher fee for negotiating cheques. (Back in 1997 I asked for -- and got -- a special $10,000 negotiation limit; not sure if Barclays will do that for regular customers these days.)
Final random stuff: my US dollar deposit account at Barclays took my manager a lot of hunting down -- it's a bit of a rarity -- and doesn't show up via their internet banking interface; I have to do everything in person at a counter. It pays very little interest and doesn't come with a cheque book so I can't pay people in dollars; all it's for is receiving deposits and holding them for bulk transfer to a sterling account. Off-hand the fee for this account is either zero or £12 a year. They also offer US dollar current accounts, but there are monthly fees, a minimum float of around $2000, and it costs $25 to write a cheque. (Also, the fee for making a deposit is higher.)
Next February (when I'm in the US) I'm going to investigate the pros and cons of opening a US bank account, but as a non-citizen with no credit history and an overseas domicile I'm not sure that's going to be an easy work-around.
posted by cstross at 8:45 AM on November 22, 2011 [1 favorite]
In general, US-UK wire transfers seem to cost around USD 30 a pop, so are not recommended except for large or urgent transactions.
For small transactions (under $100) Paypal is fine, however the exchange rate they offer is dreadful. Send more than $200 via Paypal and you're probably handing them a 2-3% commission.
Cheques ... British banks charge to deposit foreign currency cheques. They can be deposited in a Sterling bank account via Negotiation or Settlement (more on this later) or in a US dollar savings account. Charges are higher for transactions that involve currency conversion, so my current strategy is to throw everything at a Barclays US dollar savings account, and periodically transfer a tranche across into my regular sterling Everyday Saver account.
Depositing cheques:
Settlement is the process by which a cheque is sent to an international payment processing centre, couriered in a batch to the originating bank (along with a bunch of other cheques), then settled via a bulk wire transfer to the receiving bank (along with a bunch of other cheques) and the funds finally transferred to the target account. Settlement can take 4-8 weeks, and the funds finally clear into your account at the exchange rate that was in effect on the day the wire transfer was received by your bank. Settlement fees are fairly low (there's usually a floor of around £2, then a percentage commission based on the transaction, up to a ceiling of around £18; it's always cheaper than a direct wire transfer in my experience).
Negotiation is a facility that the bank may provide for customers on request. When you deposit a foreign currency cheque for negotiation they deposit an amount equal to the cheque at the current exchange rate into your account immediately, then send the cheque for settlement. Some weeks later, if the exchange rate has fluctuated in the mean time and the amount received for your cheque is different from the amount initially credited, they may make a balancing withdrawl/deposit to your account. Usually negotiation isn't available for cheques over about $250 unless you arrange a special negotiation limit with your bank; and there may be a higher fee for negotiating cheques. (Back in 1997 I asked for -- and got -- a special $10,000 negotiation limit; not sure if Barclays will do that for regular customers these days.)
Final random stuff: my US dollar deposit account at Barclays took my manager a lot of hunting down -- it's a bit of a rarity -- and doesn't show up via their internet banking interface; I have to do everything in person at a counter. It pays very little interest and doesn't come with a cheque book so I can't pay people in dollars; all it's for is receiving deposits and holding them for bulk transfer to a sterling account. Off-hand the fee for this account is either zero or £12 a year. They also offer US dollar current accounts, but there are monthly fees, a minimum float of around $2000, and it costs $25 to write a cheque. (Also, the fee for making a deposit is higher.)
Next February (when I'm in the US) I'm going to investigate the pros and cons of opening a US bank account, but as a non-citizen with no credit history and an overseas domicile I'm not sure that's going to be an easy work-around.
posted by cstross at 8:45 AM on November 22, 2011 [1 favorite]
Ah ... turns out there's a CitiBank branch in my home town. When I've got time I shall make an appointment.
posted by cstross at 8:51 AM on November 22, 2011
posted by cstross at 8:51 AM on November 22, 2011
Depending on where you live geographically in the US, Citizens Bank (http://www.citizensbank.com/) is owned by Royal Bank of Scotland, and provides some of the same benefits as HSBC. I had the inverse problem - I needed a check cut in UKP, and they made it happen.
posted by scolbath at 9:01 AM on November 22, 2011
posted by scolbath at 9:01 AM on November 22, 2011
are you saying that an dollar account at HSBC, as mentioned above, won't actually speed-up cheque clearing or avoid charges?Not simply by virtue of being dollar-demoninated, no. In practice though, the kind of UK bank that offers dollar denomination will have better systems in place for dealing with payments from the US.
I think your first step should be to ask your current UK bank why they are taking months rather than weeks. cstross seems very well informed on the details of what might be going wrong behind the scenes. All I can add is anecdata that months rather than weeks is not normal in my experience.
posted by caek at 9:37 AM on November 22, 2011
Best answer: Have a chat with the helpful people at World First.
A UK based company authorised by the FSA they were able to set up a $ US account for me with the minimum of fuss and automatically send the money to my £ UK account when it reaches a certain threshold. With healthy pricing and keen exchange rates I have been using them for a year with no problems.
posted by Dr.Pill at 2:26 PM on November 22, 2011
A UK based company authorised by the FSA they were able to set up a $ US account for me with the minimum of fuss and automatically send the money to my £ UK account when it reaches a certain threshold. With healthy pricing and keen exchange rates I have been using them for a year with no problems.
posted by Dr.Pill at 2:26 PM on November 22, 2011
I discussed with my UK bank to be able to send myself US checks and have them negotiated. They won't do this with every check source, but if it's the same few companies and you can convince your UK bank manager the checks have been reliably honored in the past, then no biggie. I think it cost GBP 10 per check, but it was very fast in practice, and I never had any offsets later on to balance exchange rates, etc.
posted by blue_wardrobe at 5:14 PM on November 22, 2011
posted by blue_wardrobe at 5:14 PM on November 22, 2011
This thread is closed to new comments.
posted by humblepigeon at 6:44 AM on November 22, 2011