By Tim Moran
Observers note that, if you do business in different currencies, you may wish to consider opening one of these multicurrency accounts. With so much uncertainty in the economic climate today, demand for multicurrency accounts—particularly those offering U.S. dollars and euros—have jumped, as businesses look to protect themselves from exchange rate fluctuations.1
Any enterprise—large or small—doing business across borders and having to manage multiple currencies might benefit from having a multicurrency account. This way, for instance, you can get paid by your client in one currency, then pay suppliers or employees in another.
Many believe a multicurrency account is also useful if:
Generally, a multicurrency account allows you to send and receive funds in multiple foreign currencies, potentially changing your current way of processing international payments. Through these multicurrency accounts, funds are either exchanged into U.S. dollars or held in the currency of the transaction until you’re ready to exchange them.3
A major benefit of a multicurrency account is the ability to send and receive funds in different currencies while avoiding an exchange between them. By accepting the foreign currencies you typically work with, you reduce the risk of losing out on the exchange rate spread with each transaction to and from your account. That you can also conduct business in U.S. dollars adds to their flexibility.4
Experts suggest that it’s important to find a multicurrency account that’s flexible enough for your needs by comparing what’s available and weighing factors that include:
In today’s financial market, there a few new players offering multicurrency accounts, but getting one from your current bank could come with side benefits. The most important include:
The main drawbacks of multicurrency accounts with a bank, say experts, are the costs and fees. While most banks will open one for free, almost all of them charge transaction fees, as well as fees for ATM withdrawals. Some banks may also charge annual account management fees and require you to deposit a minimum amount to open the account.7
If your enterprise—small or large—is doing business globally, experts say it might be time to look into setting up a multicurrency account. These are available today from banks and other financial entities, and they offer the promise of avoiding common fees and exchange-rate issues.
Tim Moran is a veteran business-technology journalist. He has most recently been involved in brand publishing startups, including creating CMO.com for Adobe.
1. “Multi currency business bank accounts: A complete guide for UK small business owners,” Startups; https://startups.co.uk/multi-currency-business-bank-account/
3. “Manage your transactions abroad with a foreign currency account,” Finder; https://www.finder.com/savings-accounts/foreign-currency-account
6. “Multicurrency Accounts Must Knows – Before You Sign Up,” TranSumo; http://transumo.com/multicurrency-accounts/