Digital technology has enabled us to connect, interact and engage in a world of possibilities. The question we have to ask is - why don't we have global banking for a global village?
Answer - Multi-currency accounts. It allows hyperlocal banking for global citizens.
You can purchase a product from another country sitting in the very comfort of your home. Sending money internationally to your family or friends from any part of the globe is possible with just a click or a tap. Exchanging currency through tedious processes and several mediums are the talks of yesterday. Today, opening and operating more than one bank account in different countries is a matter of choice.
If you are a global business or an expat working abroad, you may already have a multi-currency account. If you are uncertain and wondering if you require a multi-currency account, here's what you need to know.
A multi-currency bank, also known as a foreign currency account or borderless account allows you to hold multiple currencies in a single bank account. It allows you to deposit and withdraw money in different currencies. The best feature - it allows you to make transactions in multiple currencies through a single operational bank account, accessible in respective currencies to make payments and receivables.
Most global businesses have a foreign currency or multi-currency account. It makes monetary transactions and finance operations easier with reduced currency exchange fees. It makes managing international transactions in different currencies easy.
Most expats or individuals who frequently travel open a multi-currency account Or carry a multi-currency card to access banking facilities such as making payments, deposits, and transfers in real-time.
Although there are transactional charges, these are comparatively lower than charges levied on transactions made through a normal bank account in your residential country.
This enables saving money in foreign currency possible through a multi-currency account. There are financial institutions other than banks that offer multi-currency accounts to individuals, enabling them to send money or make payments from one country to another and in different currencies.
If you are an individual who travels frequently, or indulges in online purchase of products from different countries, or hires services while abroad or from abroad, then constantly converting currency can be an arduous task.
Here are the advantages of owning a multi-currency account:
Besides these, you also earn an interest depending on the interest rates in the respective countries and eligibility.
While your multi-currency account is accessible through any of the bank branches abroad, it is limited by your bank's payment network such as VISA or Mastercard, and the number of currencies covered. The most common currencies banks cover are Canadian Dollar (CAD), UK Sterling (GBP), US Dollar (USD), Euro (EUR), Australian Dollar (AUD), Hong Kong Dollar (HKD), Japanese Yen (JPY), Singapore Dollar(S$), South African Rand (R), Swedish Krona (SEK), Swiss Franc (CHF), etc.
However, there are certain disadvantages:
Also, the constant fluctuations in the value of money will affect the total balance of your foreign currency account.
There are several such banks with global branches offering multi-currency accounts to not only global businesses and entrepreneurs but also to individuals, such as:
The Citi International Personal Bank offers an offshore banking and multi-currency account including a debit card facility for transfers across 16 different currencies.
To qualify you must maintain a minimum balance of $200,000 USD or currency value equivalent per day. The account offers
Currencies supported by Citi are Euro (EUR), Great British Pound (GBP), Australian Dollars (AUD), Canadian Dollars (CAD), Danish Krone (DKK), Hong Kong Dollars (HKD), Japanese Yen (JPY), New Zealand Dollar (NZD), Norwegian Krone (NOK), Polish Zloty (PLN), Russian Rubles (RUB), United Arab Emirates Dirham (AED), US Dollars (USD), South African Rand (ZAR), Swedish Krona (SEK), Swiss Francs (CHF)
HSBC offers Expat banking accounts, current accounts in three currencies, and linked savings accounts in 19 currencies.
To open a multi-currency account with HSBC, you must be 18 years or above and meet one of the following criteria:
An HSBC Premier client in the U.S must have one of the following:
Currencies supported are Canadian Dollar (CAD), UK Sterling (GBP), US Dollar (USD), Euro (EUR), Australian Dollar (AUD), Czech Koruna (CZK), Danish Krone (DKK), Hong Kong Dollar (HKD), Hungarian Forint (HUF), Israeli Shekel (ILS), Japanese Yen (JPY), New Zealand Dollar (NZD), Chinese Renminbi (CNY), Saudi Arabian Riyal (SAR), South African Rand (ZAR), Swedish Krona (SEK), Swiss Franc (CHF), Singapore Dollar (SGD), Thai Baht (THB), UAE Dirham (AED), Norwegian Krone (NOK), Philippine Peso (PHP), Polish Zloty (PLN)
The TIAA Bank offers transactions in 21 different currencies through the World Currency Access Deposit Account.
To qualify you must have $2,500 to open an account or commit to a $100/month purchase plan.
Supported currencies: Australian Dollar (AUD), Brazilian Real (R$), British Pound (GBP), Canadian Dollar (CAD), Chinese Yuan (CNY), Czech Koruna (CZK), Danish Krone (DKK), Euro (EUR), Hong Kong Dollar (HKD), New Zealand Dollar (NZD), Norwegian Krone (KR), Polish Zloty (Z), Russian Ruble (RUB), Hungarian Forint (HUF), Indian Rupee (INR), Japanese Yen (JPY), Singapore Dollar(S$), South African Rand (R), Swedish Krona (SEK), Swiss Franc (CHF)
The DBS Corporate Multi-Currency Account helps maintain balances and perform transactions in 9 different currencies:
Supported currencies: Singapore Dollar (SGD), US Dollar (USD), Australian Dollar (AUD), Canadian Dollar (CAD), Euro (EUR), Hong Kong Dollar (HKD), British Pound (GBP), Japanese Yen (JPY), Swiss Franc (CHF) and Indian Rupee (INR)
However, every bank has its own policies and regulations subject to the laws of their local land and governance of countries where their branches operate. It is advisable to first learn about the policies and laws prevalent in your home country, followed by the bank of choice and respective countries and their currencies which will vary from country to country. If you are unsure about opening a multi-currency bank account, perhaps try owning a multi-currency debit card, like the Wise multi-currency debit card.
Wise is a mediatory financial institute facilitating multi-currency electronic money accounts. It is not a banking institution. It safeguards your transactions but is not covered by the Financial Services Compensation Scheme (FSCS) or any other protection scheme, unlike a bank account. You cannot get an overdraft or loan, nor earn any interest.
However, the Wise debit card benefits in the following way:
It is currently available for multi-currency account-holder residents in the UK, US, Australia, New Zealand, Singapore, Japan, Switzerland, and EEA.
In conclusion, a multi-currency account is a necessity in a digital world, managing transactions in multiple currencies is cheaper and faster with all your banking needs streamlined in one place. If you are only looking to transfer money internationally, online money transfer companies are likely to give you better rates. Compare before sending money internationally.
Banking regulations vary depending on the countries and local laws. For example, HSBC may offer multi-currency accounts but not in all countries where it operates. Such examples would be specific to countries or eligibilities. Hence, it is important to check with your local branch office if they offer similar services in your countries as regulations vary in each.