The world has become a global village. You can easily do business or buy products from other countries in the comfort of your home or office. However, you will spend a lot of time and money exchanging currencies, which can remove some of the external benefits of sourcing.
A multicurrency account can solve this problem and help you take advantage of better exchange rates and the competitive worldwide market. This account might be perfect for you if you regularly use different foreign currencies.
Table of Contents
What is a Multicurrency Account?
A multi-currency account is just that – a bank account that works with different currencies. The account makes it easier for the account holder to process international transactions without changing from one currency to another. The account is also known as a foreign currency account in some areas. This account is often reserved for high-net-worth businesses and individuals transacting in multiple major currencies.
With a multicurrency account, you can send, hold and receive money in various currencies in one account. It saves you the trouble of opening several foreign accounts. You can make transactions in different currencies using one account number as the account holder.
Most multicurrency accounts can hold dozens of currencies, with some, like the Pay iO multicurrency account holding over 100 currencies. But at minimum, the account should include the following;
- S dollar (USD)
- Canadian dollar (CAD)
- Euro (EUR)
- Australian dollar (AUD)
- Hong Kong dollar (HKD)
- Pound sterling (GBP)
- Singapore dollar (SGD)
- Japanese yen (JPY)
The currencies offered can vary depending on the service or bank you open the account with. So, if you have unique needs, check around and find a service with a multicurrency account offering the currencies you transact in.
How Does a Multicurrency Account Work?
With a multicurrency account, international transactions are quick and inexpensive. It’s the same as a regular bank account but with many more features and currencies. Depending on the type of account, you can make withdrawals, send and receive payments, and earn interest.
You can keep the money you receive in foreign currencies in your multicurrency account or convert it into U.S. dollars or other major currencies, depending on your preference.
The account lets you hold various currencies and convert them when you want or when the exchange rates are favourable. You avoid the fees that come with a regular bank account, like account maintenance fees.
Some of the multicurrency accounts, especially those from fintech companies, even offer you debit cards with the account, which makes transactions easier and more efficient.
When You Should Open a Multicurrency Account
Like every other financial product, multicurrency accounts aren’t perfect for everyone. Before signing up for it, you must assess your situation to determine if this type of account solves your needs. There are several instances when opening a multicurrency account makes a lot of sense:
You live or work outside the U.K.
A multicurrency account can be an easy way to avoid currency conversions every time you make a transaction. You also safeguard your currency from constant exchange rate fluctuations. Multicurrency accounts help you manage your funds when planning a retirement or buying property abroad. It is also ideal for remote workers who earn money in multiple currencies. Instead of managing multiple accounts for each currency, a multicurrency is a much easier alternative to receive payment from clients and employers worldwide.
You make frequent transactions with people abroad
You might be a permanent U.K. citizen who lives and works in the country, but you have business dealings with people, or you have family in other parts of the world. A multi-currency account is convenient for wire transfer services to your business partners or family abroad.
Most bank wire transfers come with steep fees and exchange rate markups, and the delivery isn’t as fast as domestic wires. Multicurrency accounts quickly fix all these problems in one simple account. With a multicurrency account, you can save money on money transfer fees and exchange fees.
What are the Main Features of a Multicurrency Account?
Multicurrency accounts come with various features. The exact features can vary depending on the account provider. But the main ones, which you will find with most multicurrency accounts, are;
Lower fees
Multicurrency accounts have lower fees than running a regular bank account. The money transfer fees are lower, and the currency exchange fees are also lower. Unlike regular accounts, multicurrency accounts don’t have certain charges usually associated with regular accounts. The low operational fees make these accounts ideal if you send and regularly receive from abroad.
Ease of use
Most services that offer multicurrency accounts are fintechs that have mastered technology and use it to its full effect. Everything about the account, from opening one to running one, is easy and well laid out. You can master the ins and outs of the account in a few minutes. Combined with these services’ responsive support, you should have a smooth experience when using the multicurrency account.
Online banking
You get all the features of online banking with your multicurrency account. You can access your account on multiple smart devices like your phone and the web. The apps and websites of these service providers are robust and packed with features that make it easy to run your funds from anywhere in the world. You only need an internet connection.
Benefits of Multicurrency Accounts
You most likely have another bank account working relatively well for you. Why should you consider opening a multicurrency account, and what benefits will it bring? There’re quite a few ways you stand to gain by opening a multicurrency account that distinguish it from a normal bank account;
Reduced transaction costs
Opening and operating separate accounts in different countries and currencies can be expensive. Each bank may charge an account maintenance fee, and the currency exchange rates might not be competitive. Foreign banks also have a minimum balance required to maintain the account.
The accounts are also attached to transaction-level charges, especially for foreign wire transfers. A foreign currency does everything the bank account does without the extra charges. You only need to pay a small single account fee. There are no minimum balance requirements, and the currency exchange rates are extremely competitive.
Manage forex easily
You can use a multicurrency investment account to manage forex volatility by moving your balance to another currency. With a multicurrency account, you can accept payment in any currency and spend the money in the same currency without any exchange costs. You can also use the account as a holding account if your primary currency is going through a storm and wait until the exchange rates are more favourable before changing it into another currency.
Simple and convenient
If you go for a fintech multicurrency account, you’re not subjected to the same requirements and bottlenecks that come with banks. The accounts are easy to open and manage because everything is in one place and easily accessible.
You will also find that your monthly accounting is much easier because you don’t have to juggle between the different banks, and you can quickly track your spending and income. So if you like to keep a tight grip on your finances, a multicurrency account will make it easier for you.
Instant transfers
One of the downsides of bank accounts is wire transfers. International can take days, sometimes even weeks, if you run into challenges.
You can instantly send or receive money in local currency with multicurrency accounts. You eliminate the waiting period and get faster local settlements.
Enjoy the digital banking experience
You can access your multicurrency account from any part of the globe anytime. You can send and receive payments digitally without visiting the bank, get statements, and track your funds. It’s not only time-saving but also convenient. It’s the ultimate digital banking experience!
Who Is Qualified For a Multicurrency Account?
You will need to be 18 years of age to open a multicurrency account, and in most cases, the account is only available to residents of certain countries. You might also be required to have enough money to cover any minimum balance requirements. But this depends on whether the account you choose has such a requirement.
Also, some multicurrency accounts are designed for businesses or high-net-worth individuals and might have steep minimum balance requirements or additional requirements during signup.
You are qualified and might benefit from a multicurrency account if;
- You have a business or contract with people in other countries.
- You have businesses that sell their products or services in various currencies.
- You often transact with people in other countries.
- You’re an expat with expenses in more than one currency or country.
- You’re a freelancer working with clients in other countries.
- You’re a frequent traveller who needs to access money in different currencies.
How to Apply for the Multicurrency Account
Applying for a multicurrency account will be similar to opening any other bank account. Here are some of the documents you will need;
- Personal information; your name, birth date, address and contact information
- Cash, debit card or bank account information to make an initial deposit
- Government-issued identity verification like ID, passport or driver’s license
Depending on the financial institution you select, you can open the account online or present yourself physically to open the account. Some institutions might also have more requirements, especially if the account is for business or a high-net-worth individual. In almost every case, an initial deposit is required to open the account, but this also depends on where you’re banking.
What Fees are Associated with the Multicurrency Account?
Multicurrency accounts are a cost-saving solution, but that’s not to say they are without fees. You may incur some fees with the account, although it depends on the account you choose to have. Some of the fees associated with a multicurrency account may include the following;
- Monthly service fees
- Fees for sending or receiving international payments
- Any markups on the exchange rate
- Fees for domestic transfers
- Overdraft fees
- Account opening fees
Because the fees vary, make sure you ask upfront and weigh the costs of the fees you expect to pay with the benefits the account offers. The goal is to realise value for money.
Which is the Best Multicurrency Account?
There are many multicurrency accounts available. The only question is which among them works best for you. Ideally, the more features and better security the account offers, the better. However, some will be more suited to your needs than others, so you will need to choose from different options to find the best one for you.
Pay iO
Here at Pay iO, we have a revolutionary multicurrency account. It is packed with features that appeal to modern businessmen and businesses looking for a flexible account they can operate from wherever they are. Some of the amazing features that the Pay iO multicurrency account offers include the following;
Over 130 currencies are available
This is one of the few multicurrency accounts to accept such a huge number of currencies. If you’re unsure where your business and travelling will take you and want an account that can receive and send money in almost any currency, this is the perfect account for you. You can exchange and hold money in different currencies depending on your needs. You can access over 130 currencies through the Pay iO phone app, web portal, or your relationship manager.
Access all areas
Pay iO supports payments to over 180 countries. Most payments and money transfers are completed and settled on the same day. The account also has SWIFT and SEPA capabilities which further enhance delivery speed regardless of where you’re sending the money. Whether it’s an emergency or you just want convenience, the Pay iO multicurrency account has everything figured out for you.
Mitigated risks
Don’t get carried away by the features of a multicurrency account and forget to consider the security the provider offers. Pay iO has hedging offerings that help clients mitigate the risk of currency fluctuations negatively impacting their businesses. You can securely hold your currency until it stabilises before exchanging it to maximise its value.
Peace of mind
Pay iO works with trusted partners regulated and authorised by the FCA. The provider is not just liquid but provides peace of mind by working with partners who are vetted and authorised to enhance customer trust.
Currency conversion
Through your Pay iO multicurrency, you can convert and send money daily. Currency conversion can be a major pain point for customers. The process can be expensive and slow. With Pay Io, you can enjoy easy currency swaps through the FCA-authorised partners at competitive exchange rates and low fees.
Rapid onboarding
Have you just heard about Pay iO and would like to join? The signup process is fast and easy. You can get all set up and start processing payments within 24 hours instead of waiting weeks to approve your account.
Wise
Wise is another credible multicurrency account provider. However, unlike Pay iO, which has a robust offering that caters to everyone that would like to open and maintain a multicurrency account, Wise’s option targets expats, travellers and freelancers.
The account supports about 50 foreign currencies and offers instant conversions when moving your money around.
Wise also offers a MasterCard debit card that you can use to make payments like a local in foreign currencies. You can also make free ATM withdrawals of up to £200. Like Pay iO, Wise also has an easy-to-use app that gives you 24/7 access to your account.
Multicurrency accounts are a lifesaver for customers looking to receive or send money and payments abroad. The account offers extensive benefits, but your experience depends on you finding the right provider with the right features that match your needs.
