House sale proceeds

[laf 46]

We are in the process of selling our house ready to move to Sydney.  Can anyone advise where we can deposit a one-off lump sum for the best interest rate.  I'm not finding it very easy to compare savings rates.  We'll need to rent for as long as it takes to buy a property.

[Ausvisitor 752]

5 hours ago, laf said:

We are in the process of selling our house ready to move to Sydney.  Can anyone advise where we can deposit a one-off lump sum for the best interest rate.  I'm not finding it very easy to compare savings rates.  We'll need to rent for as long as it takes to buy a property.

Well that depends on where you are coming from.

I will assume the UK (given the forum name).

The interest rate on savings in AUS and UK is broadly the same right now, half of absolutely nothing! So it makes no difference which country you leave the cash in.

What does make a difference though is the exchange rate right now it is 17c to the pound worse than it was in February.

So if you had £500k from a house sale and you moved it now you would get $865k but if you had done it in Feb (or when it next touches 1.9 to the pound) you would get $950k

Nearly $100k difference for choosing the right time to exchange cash, now $100k is a big chunk of change - enough to pay for 2-3 years of rent.

If you wanted an interest rate that could net you that sort of difference in 6 months it would need to be about 25% (once you've paid tax on the interest)

 

So whilst you can never tell the best time to exchange pounds for dollars, this is almost certainly not it - for the last 5 years this is about as low as it has been 

[Parley 7,204]

2.85% at Ubank if you make a $200 per month deposit. https://www.ubank.com.au/

Rates are going up so will probably be over 3% within the next 1 to 2 months.

[laf 46]

Thanks for your reply.  Yes I am in the UK, moving from the London area. 

Thanks for confirming the interest rates are similar to the UK and it looks like many institutions only pay the advertised rates up to a certain balance, lower than the amount we will be depositing.

Unfortunately the exchange rate is out of our control.  I'm constantly monitoring it and the outlook looks bleak.  It will be the biggest gamble ever deciding whether to move it straight away.  We can only hope for a further downturn in property prices to offset our exchange rate loss.  

[laf 46]

15 minutes ago, Parley said:

2.85% at Ubank if you make a $200 per month deposit. https://www.ubank.com.au/

Rates are going up so will probably be over 3% within the next 1 to 2 months.

This appears to be only for balances up to $250k.
At least rates are moving upwards. Not good for mortgage holders of course.

[can1983 278]

3 hours ago, laf said:

Thanks for your reply.  Yes I am in the UK, moving from the London area. 

Thanks for confirming the interest rates are similar to the UK and it looks like many institutions only pay the advertised rates up to a certain balance, lower than the amount we will be depositing.

Unfortunately the exchange rate is out of our control.  I'm constantly monitoring it and the outlook looks bleak.  It will be the biggest gamble ever deciding whether to move it straight away.  We can only hope for a further downturn in property prices to offset our exchange rate loss.  

Interest rates are not directly in your control of course but they do go up and down so unless you have to move it i wouldn't

We got 1.70 in November 2018 because we had to move it to buy. Ours was in the order of GBP250k

People could say that rate was rubbish but we brought a house with it that's gone up 30% since which more than compensates for the exchange rate on the deposit  being less than ideal. And we have had a home for our family in the meantime

It gave me sleepless nights for 6 months at the time so I do sympathize

[Alan Collett 3,382]

5 hours ago, laf said:

Thanks for your reply.  Yes I am in the UK, moving from the London area. 

Thanks for confirming the interest rates are similar to the UK and it looks like many institutions only pay the advertised rates up to a certain balance, lower than the amount we will be depositing.

Unfortunately the exchange rate is out of our control.  I'm constantly monitoring it and the outlook looks bleak.  It will be the biggest gamble ever deciding whether to move it straight away.  We can only hope for a further downturn in property prices to offset our exchange rate loss.  

Are you speaking with the private client desk at one or more of the specialist forex companies?

If you'd like a name and contact details please send a private message to me (click on my name to the left of this post).

Best regards.

[Ken 1,527]

10 hours ago, laf said:

Thanks for your reply.  Yes I am in the UK, moving from the London area. 

Thanks for confirming the interest rates are similar to the UK and it looks like many institutions only pay the advertised rates up to a certain balance, lower than the amount we will be depositing.

Unfortunately the exchange rate is out of our control.  I'm constantly monitoring it and the outlook looks bleak.  It will be the biggest gamble ever deciding whether to move it straight away.  We can only hope for a further downturn in property prices to offset our exchange rate loss.  

You do of course have the option to deposit your money in more than one place (and even in more than one country/currency) if they'll only give you the maximum rate on a smaller balance and if you are concerned about what's going to happen to exchange rates.

[laf 46]

22 hours ago, can1983 said:

Interest rates are not directly in your control of course but they do go up and down so unless you have to move it i wouldn't

We got 1.70 in November 2018 because we had to move it to buy. Ours was in the order of GBP250k

People could say that rate was rubbish but we brought a house with it that's gone up 30% since which more than compensates for the exchange rate on the deposit  being less than ideal. And we have had a home for our family in the meantime

It gave me sleepless nights for 6 months at the time so I do sympathize

I think my sleepless nights have already begun before we even have to make these decisions, apart from the stress of the physical move. 

We definitely have the option to wait and rent while house prices aren't increasing.  If they take off again in the spring we'll have to weigh up the exchange rate compared to the price rises.

[Ausvisitor 752]

Overnight the exchange rate rose by 2c to the pound so had you changed £500k yesterday you would have gotten $850k, do it today and you would get $862k

My prediction (and who knows what might happen between now and then to throw this off) is that by the start of October we will be back at 1.8 to the pound (or 900k for £500k)

This is because money markets hate unknowns and right now the UK has a power vacuum. Once Liz is installed as PM it will settle down (it will be Liz, Rishi has no chance with the Tory wrinkles), unless she immediately calls an election.

Money markets hate unknowns, they don't care who is in charge just that they know who is in charge. At the moment you can't make investment decisions in the UK because you don't know if we are going to have more of the same (Rishi) or move to a low tax world (Liz)

[Ken 1,527]

7 hours ago, Ausvisitor said:

Overnight the exchange rate rose by 2c to the pound so had you changed £500k yesterday you would have gotten $850k, do it today and you would get $862k

My prediction (and who knows what might happen between now and then to throw this off) is that by the start of October we will be back at 1.8 to the pound (or 900k for £500k)

This is because money markets hate unknowns and right now the UK has a power vacuum. Once Liz is installed as PM it will settle down (it will be Liz, Rishi has no chance with the Tory wrinkles), unless she immediately calls an election.

Money markets hate unknowns, they don't care who is in charge just that they know who is in charge. At the moment you can't make investment decisions in the UK because you don't know if we are going to have more of the same (Rishi) or move to a low tax world (Liz)

With Liz Truss' famous grasp of geography the markets may need to worry about where in the world (or even which world) she's moving the UK to.

[laf 46]

Thanks so much for the tips. Rate moved from the low of 1.70 last week to 1.74 today. 

At least the stock market is improving and our investments are now out of the red. 

Australia's problems seem to be mirroring ours albeit maybe not as serious. 

As you say hurry up new PM whoever it is as Ukraine doesn't look like it'll be ending any time soon.

[Cath.C 1]

On 09/08/2022 at 23:36, Ausvisitor said:

 

So whilst you can never tell the best time to exchange pounds for dollars, this is almost certainly not it - for the last 5 years this is about as low as it has been 

Sorry, just read your further post.  Do you think that European energy prices and the Ukraine was won't continue to drive down the pound (along with the Euro)?

Edited August 30, 2022 by Cath.C

[Ausvisitor 752]

20 hours ago, Cath.C said:

Sorry, just read your further post.  Do you think that European energy prices and the Ukraine was won't continue to drive down the pound (along with the Euro)?

No, the Liz truss honeymoon period (feels yucky to write that) will cause a jump in the pound

[Jon the Hat 1,072]

44 minutes ago, Ausvisitor said:

No, the Liz truss honeymoon period (feels yucky to write that) will cause a jump in the pound

I really hope so!  Need to move some cash before the end of the year and this is bloody depressing.

[CurrawongSong 1]

9 hours ago, Ausvisitor said:

No, the Liz truss honeymoon period (feels yucky to write that) will cause a jump in the pound

I just moved my savings over to Aus (moving back before the end of the year), knowing that it's not a good time but I thought it may be better than say six months time, when things are forecast to be pretty tough in the UK with the energy bills and cost of living etc (which will be worse than in Sydney). What do you think, does that kind of thing not weigh on the pound?

[Cobs_Ahoy 75]

We are in a similar position, house sale is looming and wondering how to manage the equity in regards to moving down under.
 

My husband has a HSBC account, who (if you you have enough in savings) offer a premier account that comes with few-free instant transfers between international accounts, and the ability to hold money in different currencies in one account. So I was wondering whether opening one of those accounts and having the sale  proceeds paid in there might be a good plan. I’ve seen HSBC recommended on these forums because they are a global bank, but does anyone have any experience of transferring money between U.K. and Oz HSBC accounts? It seems like an easy way to manage money in two countries, but not sure if I’m missing something. 

[Marisawright 10,066]

53 minutes ago, Cobs_Ahoy said:

I’ve seen HSBC recommended on these forums because they are a global bank, but does anyone have any experience of transferring money between U.K. and Oz HSBC accounts? It seems like an easy way to manage money in two countries, but not sure if I’m missing something. 

They are a global bank, but if your oh opens an account in Australian dollars, that account will still be held in the UK.  Like most of the big banks, they will open an Australian account for you before you arrive, and allow you to pay money into it, but you won't be allowed to actually use the account (i.e. withdraw/transfer money from it) until you arrive and do the ID checks required by Australian law.

[Alan Collett 3,382]

Maybe have a chat with one or two of the specialist currency transfer firms - feel able to ping an email to me (see below) if you would like contact details.

These firms usually have an entry into the banks in Australia.

Unfortunately the big 4 Aus banks have now closed their operations in the UK; it used to be possible to open a bank account by speaking to someone in the right time zone before you departed for Australia.

Maybe speak with Westpac?  That's who I bank with and I've found them as good as any.

Here are contact details where I believe you can open a bank account:

 

Best regards.

Edited September 6, 2022 by Alan Collett

[Marisawright 10,066]

1 hour ago, Alan Collett said:

Maybe speak with Westpac? 

I can't imagine why he'd bother if he's already got a UK account with HSBC.  

[Alan Collett 3,382]

Just now, Marisawright said:

I can't imagine why he'd bother if he's already got a UK account with HSBC.  

Because Westpac is in Australia, has a significantly higher presence in Australia. and more relevant banking solutions for someone living in Australia than a bank in the UK?

I've got a NatWest account in the UK and can operate an AUD denominated account with them - but I don't because it doesn't provide me with service offerings that are relevant to me as an Australian resident.

Best regards.

 

[Marisawright 10,066]

7 minutes ago, Alan Collett said:

Because Westpac is in Australia, has a significantly higher presence in Australia. and more relevant banking solutions for someone living in Australia than a bank in the UK?

True, but so does HSBC and he already has a relationship with them in the UK.  Personally, I wouldn't touch any of the Big 4 with a bargepole after the rorts turned up in the Royal Commission.  The other banks usually have better deals on just about everything from interest on savings to mortgages and loans. 

[Alan Collett 3,382]

2 minutes ago, Marisawright said:

True, but so does HSBC and he already has a relationship with them in the UK.  Personally, I wouldn't touch any of the Big 4 with a bargepole after the rorts turned up in the Royal Commission.  The other banks usually have better deals on just about everything from interest on savings to mortgages and loans. 

I doubt that a relationship with HSBC will count for anything in Australia.

At a personal level I've never had a major issue with Westpac - nor with CBA before that.

Agreed though that the second tier banks can be worth a look - though these are owned by the big 4 these days.

I perceive that most migrants are just looking for a transactional banking facility at first, which includes internet banking and a debit card attaching to the bank account.   

So to the OP: yes, try your existing bank, but I'd also explore one of the big 4 if you need a BSB ( = sort code) and an account number so you can transfer your funds to Australia from the UK.

Best regards

[Parley 7,204]

Not sure if it helps in this case but i heard HSBC in Australia are the only bank that will still accept an international cheque in a foreign currency for deposit to an Australia account.

Nothing wrong with the big 4 for banking services. They are the best.

[deanblb 19]

If it helps HSBC were very good when I moved to Australia. It took a bit of convincing them, reminding them that they advertise themselves as an international bank, and finding the right person to talk to. They set me up with an Australian HSBC account and an everyday global account in sterling and savings accounts in sterling and Australian dollars. I used the A$ saving account for the money from our UK house sale as the interest rate for a few months was competitive. However, I never used HSBC to transfer funds as the exchange rate was better using Wise or XE. I had been a customer of HSBC for many years in the UK. They did accept a UK cheque from HMRC a few months ago but it took about 4 Weeks to clear and they had to send the cheque to Sydney from Brisbane, so was not an easy process. I still use HBSC current account in Australia and in the UK but alongside other accounts here in Australia.