The process of selecting a new business bank account and setting it up can seem intimidating. There are many existing options in the market that help business owners manage their money efficiently – all of which have been designed to help you. However, if you do business in different currencies, then you should consider opening a multi-currency account as a way to avoid paying foreign exchange fees and to manage all your currencies in one place.
The current economic climate has prompted businesses to look for ways to protect themselves against currency fluctuations by opening multi-currency accounts – especially those offering Euros and Dollars.
What Is A Multi-Currency Business Bank Account?
With a multi-currency business bank account, you can hold multiple currencies within the same account. As opposed to keeping track of several bank accounts with multiple account numbers, you can instead use a single account number for each currency type.
Using your IBAN (international bank account number), you can accept money from senders in the currency of their choice, pay your staff or clients in multiple currencies, exchange currencies easily and cheaply, make instant/free transfers to other account holders, and withdraw money anywhere in the world. Additionally, they are cheaper to manage than having multiple currency accounts in different countries, where you may be required to pay monthly fees or maintain minimum deposits in each account.
How Does A Multi-Currency Business Bank Account Work?
Generally, a multi-currency account works in the same way as a standard bank account. Though the services will vary depending on where you open an account, you can expect to be able to carry out the standard account actions, including:
- Withdrawing money
- Sending and receiving payments
- Earning interest on your account total (depending on the institution)
- Access to your funds for cheques or electronic transfers
Essentially, it is a standard checking account that you can use to receive payments and to make payments as you need. As with a standard bank account, you may encounter the same types of fees on a global currency account. It is possible to see fees on withdrawals, open fees, transfers, and more. The amount or frequency of these fees will vary, but if you speak to a representative before opening an account, you will be able to find out what they are.
Beyond that, the majority of the services offered will be intuitive and familiar based on your other bank accounts.
Pros Of Using A Multi-Currency Business Bank Account
- Lower transaction fees
A traditional bank account makes it difficult and inconvenient to transfer money across borders and between currencies. A multi-currency account lets you access all currencies you are working with from one account and only pay one account fee.
- Simpler, cheaper foreign exchange
When you have a multi-currency account, you can accept payments in the chosen currency of your client or partner and make payments in your own currency without having to transfer money between foreign currency accounts. Managing all of your currency conversions in one location, for the lowest possible fees, allows you to minimize conversion losses.
- Speed of transactions
Moving money faster reduces your chances of losing money. In traditional bank accounts, cross-border payments are often much slower than domestic transactions. A multi-currency account allows for cross-border payments to be made using local payment networks, which leads to much faster transactions.
- Convenience for your customers
The ability to pay in the currency of the prospective customer is a major factor in customer satisfaction. Customers who can’t pay in their preferred currency will likely find a supplier that does. Multi-currency accounts allow you to change the currency you do business in, based on the region you’re in.