Thank you for pointing this out. I've seen Interactive Brokers mentioned as a brokerage that will deal with US persons, but hadn't had the chance to look into it further. I've been poking around their website, but still have some questions, if you would be so kind to humor me....interactive brokers (ibkr). IBKR is expat-friendly, in many countries, and when forex works, it's 10x cheaper than wise (which itself is 10x cheaper than forex through a bank). Just read up about withdrawal restrictions in some currencies, and be careful to push money into IBKR rather than pull money from IBKR. If you use them for forex ($2 / 100K), be sure to hold investments with them too, which is probably a good idea anyways.
Could I push money from Vanguard then to Interactive Brokers, use Interactive Brokers to perform the currency exchange, and then just have it sit there earning some interest for me while I wait to move over? Presumably I can then open a UK bank account once I'm physically present, and transfer from Interactive Brokers to UK Bank as needed for my daily expenses.
Am I missing something here?
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Hopefully yes. You can definitely wire the money to IBKR and then convert to GBP there. You can earn interest on the funds. This says 3.2% or 2.2% for amounts over $8000, but the first $8000 don't earn interest. It's also worth pointing out that sometimes the interest rate can become negative. Look into the level of insurance and protection -- I suspect SIPC doesn't cover foreign currency holdings.
The big issue is withdrawal. For some currencies/customers, they won't let you withdraw. Going from USD to NZD, I ran into this problem. A month later, their policy on NZD had changed and I was able to withdraw in NZD. So when it works, it's unbeatably cheap ($20 per million!), but there's a risk that you won't be able to pull it out in the foreign currency. Remember that they're targeting forex traders, not currency converters.
If moving large funds, don't be surprised if they ask you to provide proof of the funds' source, and proof that you own the withdrawal GBP account. They're serious about KYC/AML compliance requirements (Know Your Customer / Anti-Money Laundering).
Statistics: Posted by aspiring_kiwi — Thu Feb 06, 2025 6:40 pm