Multi-Currency Account: Why You Need It & 6 Best Brands for Expats

Expats travel extensively around the world and often encounter obstacles. They can experience new cultural clashes and work in different jobs, amongst other things. If all these challenges are easy to overcome, the most difficult and stressful one is the financial aspect. Every country has a different currency, which can cause issues for many expats who are connected to a certain bank account.

Fortunately, there’s a solution to this problem: a multi-currency account. This article will explain all the reasons for opening this type of account, how you can open them, and provide you with a list of the best ones in the game.

What is a Multi-Currency Account?

To describe it simply, multi-currency accounts (MCAs) are specialised bank accounts that various people or businesses can hold, manage, and transact in many currencies. What makes MCAs different from regular bank accounts is that they don’t denominate in a single currency and offer account holders the flexibility to work with different currencies. They also don’t need to convert their funds all the time.

It’s also important to know that foreign currency accounts are not the same as multi-currency ones. Even though they hold and manage funds in foreign currency, unlike your domestic ones, they still can only hold a single currency, whilst MCAs can have many at the same time.

Why do you need this type of account?

MCAs are very valuable, but before starting one, you have to understand the reasons you will use it.

To be sure about why you would need to open a multi-currency bank account, here are all the different reasons for it:

Business Uses

Payment Flexibility: Having a business requires you to make many payments to suppliers, vendors, and employees. The issue that can come your way is that all these people may prefer the amount in their desired currency. With MCAs, these types of payments in various currencies are convenient, avoiding any extra costs.

Cost Efficiency: Speaking of extra costs, one of the big problems with having a regular bank account is that there’s an added exchange rate and fee when paying in foreign currency. MCAs easily eliminate this complication by doing direct transactions in the required currency with zero cost.

Revenue Streamlining: If your business generates revenue and receives payments in different currencies, MCAs can help you make the reconciliation process simple, i.e., verify that your revenue records are accurate and complete.

Risk Management: In recent years, there have been troublesome shifts in currency values, creating many concerns for international businesses. By having a multi-currency account that can hold many currencies at the same time, it mitigates these economic problems and protects their earnings.

Travel Uses

Expense Management: Travelling frequently around the world can get you into many hurdles, one of which is currency conversion at global transaction sites, where you pay extra fees. Setting up an MCA can help you avoid paying those fees and lessen the cost of your trips.

Investment Opportunities: If you’re an expat who also likes to make investments, opening a multi-currency account will help you with such opportunities whilst you travel. It’s a much easier option than opening new accounts at many financial institutions in different countries.

Specialised Uses

Property Ownership: For people who own property in various parts of the world, MCAs help you manage your finances efficiently. They can make all the processes, from receiving rent payments to handling maintenance fees, easy in different currencies.

Foreign Tuition Payments: If you have children who live and study abroad at schools or colleges, MCAs create a smooth process for paying tuition and other fees in the currency of the country where your children reside.

Advantages & Disadvantages

After listing all the reasons why you might open a multi-currency account, it’s important to look at the advantages and disadvantages to determine whether having one will be beneficial or cause obstacles.

Benefits

Convenient Management of Multiple Currencies: Having a multi-currency account can give you access to holding many currencies in just one place. It easily eliminates the main problems of needing to open separate bank accounts for each currency. MCAs help you manage your finances more conveniently than dealing with many other banks.

Mitigation of Currency Conversion Fees: This point is very beneficial for every expat. When travelling around the world with a single-currency account, any payment you make comes with an extra conversion fee that adds up quickly. This can make each purchase more costly. MCAs allow you to switch to any currency you need to pay with, without any fees at all.

Protection from Currency Fluctuations: Fortunately, multi-currency accounts have a built-in mechanism for protecting you against any currency risk. Since the world economy is constantly unstable, currency rates are always changing, causing financial problems for many travellers and businesses. MCAs protect you by allowing you to make and transfer payments in any currency without any devastating effects.

Effective International Transactions: Another problem with financial transactions is the complexities of cross-border transactions and the slower payment processing times. MCAs ease these problems by either eliminating them or making them much easier to overcome.

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Better Financial Planning & Control: MCAs, unlike your regular bank accounts, provide you with a wider, comprehensive overview of all your finances in various currencies across all your transactions and businesses. This is especially beneficial if you want tighter control over financial operations and want to easily track expenses and manage cash flow.

Disadvantages

High Maintenance Fees: As much as MCAs are great tools for managing all your funds, they do come with a big price. Having a multi-currency account requires you to pay higher fees than your standard bank account: maintenance charges, higher transaction fees, and fees for holding balances in certain currencies. Make sure to review the fee structure of any MCA so that you know whether you can afford to financially maintain one.

Complex Management of Multiple Currencies: For many expats, it’s probably a big advantage to have a bank account with many currencies, but it’s not that easy when it comes to managing an MCA. It might be very difficult for some people to track multiple currencies and understand the exchange rates. So, as advice, be sure you have basic knowledge of foreign exchange markets.

Limited Currency Options: Another disadvantage of MCAs is that not every account can hold every currency from around the globe. Each multi-currency account has its own limitations. Before opening any MCA, decide which currencies you will be making transactions in and for what purposes.

Regulatory & Compliance Issues: Opening a business in the international sphere can sometimes raise regulatory and compliance issues, especially if you hold a multi-currency account. Every country has its own unique jurisdiction, so learn about the legal and tax implications of holding and transacting in foreign currency related to your specific circumstances.

List of the Best Multi-Currency Accounts

All these MCAs are great picks for your expat life, but each one can provide different services based on your specific needs. So, be sure to click on one of these links for further information after going through this list.

Wise

Dubbed as the ‘only real provider’ to offer a vast multi-currency account solution for any individual with various uses, from personal to business ones. This online and mobile app has one of the cheapest options for transferring and receiving money, whilst offering an option to pair the account with your debit card. The only downside to using Wise is that it doesn’t offer the ability to cash cheques, set up direct debits, or visit a local branch, like traditional banks.

Revolut

Along with Wise, Revolut is another popular option for travelling around the world. As with the former account, this one can accompany your debit card and offers low fees for international money transfers. The only issue is that Revolut, unlike Wise, doesn’t offer many local accounts for local currency transfers. Also, like Wise, you cannot cash cheques, visit a branch, or set up direct debits.

HSBC Expat

This MCA is an extension of one of the world’s largest banks, HSBC, and thus has a large global banking network with great security. This company specialises in creating offshore accounts to manage finances across multiple countries and regions. However, despite the bank having branches in 62 countries, it doesn’t offer the same products all over the world, and you may not have access to local currency accounts. In addition, high fees and poor exchange rates may also make it not the best traditional choice for some.

Payoneer

This account is solely great for expats who want to do business whilst living abroad. Even though it offers payment services, it’s best known as the best solution for getting paid directly and collecting payments from business partners all around the world. Unfortunately, Payoneer is a type of MCA that’s too narrow for wider use and might not be suitable for non-business accounts.

Moneycorp

Like Payoneer, Moneycorp is another great multi-currency account that primarily deals with business, though it can also serve regular individuals. It supports over 120 currencies, and there are no maintenance fees for accounts. Though it has its problems—its accounts are business-focused, fees are required for any international transaction, and they don’t have local accounts.

Airwallex

Another great MCA if you need to globally manage your business finances. It helps you integrate corporate cards and accept online payments. Also, it offers a good number of local currency accounts. However, it’s also a business-only account with limited offline banking support and a monthly subscription fee to maintain it.

Conclusion

Multi-currency account is a new technology that continues to grow rapidly and is becoming more prominent around the world. They can be used by any expatriate for various purposes to make their travels easy, whilst also managing their finances. So, whether you’re currently an expatriate or will become one soon, be sure not to overlook this technology and improve your life for the better.

If you enjoyed reading this article, please check our other articles on the Babylon Website for more information on moving-in processes and cultural events around the globe.