Opening a foreign currency account gives you access to a wide range of features and benefits, particularly if you want to send or receive funds in multiple currencies on a regular basis. While international transfers are traditionally seen as costly and slow, a foreign currency account enables you to make transfers in multiple currencies with ease.
In this article, we take a look at the reasons why so many businesses and individuals are opening a foreign currency account and tell you what steps you’ll need to take to open your own multicurrency account.
What Is a Foreign Currency Account?
A foreign currency account is essentially a ‘borderless’ account that allows you to make transfers in a variety of currencies. Rather than being restricted to making and receiving transfers in GBP, for example, you can transfer funds in EUR, USD, CAD, and many, many more from a single account.
Crucially, opening a foreign currency account gives you access to local account details for every currency that’s included within your account. This effectively localises international transfers and enables you to access a wide variety of benefits, such as faster transactions and lower transfer fees.
What Are the Benefits of Opening a Foreign Currency Account?
Now you know what a foreign currency account is, you’ll want to know why it’s worth having and what benefits it can offer. In fact, there are a wide variety of advantages associated with foreign currency accounts, including:
Faster International Transfers
Although there are various ways of transferring funds internationally, many take hours, days, or even multiple days to complete the transaction. Faster ways of sending cross-border payments can be costly, and these fees soon add up if you’re regularly transferring funds in multiple currencies.
When you open a foreign currency account and have access to local account details for your preferred currencies, it enables you to make faster transfers to recipients (and to receive funds more quickly too). In fact, your international transfers effectively become local transactions, which means they’re more efficient and faster to process.
Reduced Exchange Fees
One of the drawbacks of making an international transfer is the risk of making the transaction when the exchange rate isn’t working in your favour. If the value of the Pound drops, for example, you’ll spend more when sending a specific sum in another currency.
Fortunately, opening a foreign currency account means you’re protected against some of the volatility in the Forex market. Instead of having to accept the exchange rate at the time of the transfer, you can secure an exchange rate in advance via a ‘forward contract’. Not only does this enable you to take advantage of favourable exchange rates, but it also gives you certainty and clarity over your upcoming international transfers.
When you’re using multiple accounts or payment methods to manage multi-currency transactions, it can be tricky to keep up to date with what’s going in and out of your accounts. With a dedicated foreign currency account, however, you can make and receive multi-currency payments via a single account and benefit from centralised reporting. With enhanced visibility over your finances, you can view, monitor, and manage your transfers easily and transparently.
In addition to accessing more favourable exchange rates, a foreign currency account can reduce your expenditure by lowering or eradicating transfer fees too. In some cases, making an international transfer can be expensive but the fees associated with multicurrency accounts are typically much lower.
This is because your funds will be processed via fewer intermediaries when you’re sending or receiving funds via a foreign currency account. As a result, the associated cost of the transfer is reduced, which can add up to a significant saving when you’re making a high volume of multicurrency transactions.
Simplified Organisational Management
For businesses, opening a foreign currency account can transform the way you manage your organisation. If you have employees or teams located in different countries, for example, you can manage your payroll seamlessly by making transfers in individual’s home currency. Similarly, the enhanced visibility over global transactions, combined with optional account sharing and user access, means you can create a custom foreign currency account that matches your organisation’s needs and structure.
Opening a Foreign Currency Account: 5 Simple Steps
If you’re thinking of opening a foreign currency account, be sure to follow these five simple steps:
1. Find the Right Account
Not all foreign currency accounts offer the same terms or even the same currencies, so it’s worth comparing features and fees before you apply. At PayAlly, for example, we offer a whopping 39 currencies via our multicurrency account, along with competitive fees and 1:1 support.
2. Check Your Eligibility
Every bank, financial institutional or electronic money institution (EMI) has their own eligibility criteria when it comes to opening any type of account. Before you begin the application process, take the time to check that you meet the eligibility criteria for your preferred foreign currency account.
3. Get Your Documentation Ready
You’ll be asked to supply some basic information when you apply for a foreign currency account, such as your name and address, but you may also need to prove your identity by submitting or uploading copies of relevant documents. If so, you’ll find it easier to make your application if you obtain and prepare these documents in advance and keep these to hand throughout the application process.
4. Seek Tailored Support
Before you sign up for a foreign currency account, check whether your chosen provider offers support throughout the application process and beyond. At PayAlly, our dedicated Relationship Managers provide 1:1 support whenever it’s needed, so you can be confident that help is always at hand.
Opening a Multicurrency Account with PayAlly
Our multicurrency account is designed to transform international financial transfers into simple, localised transfers. With a wide array of features and functionalities, you can streamline your financial management when you open a multicurrency account with PayAlly. To learn more, get in touch with our expert team now.