Most, if not all, offshore banks offer qualifying customers the option of having a combination of foreign currency accounts held under one single account number. Such a product is a multi-currency offshore bank account.
Another way of looking at it is: a multi-currency account is a savings or a current account that allows you to make deposits and withdrawals in a range of currencies. In other words, as a multi-currency account holder you can hold cash in multiple currencies within a single account. You can deposit cash in any of the currencies enabled on this account; while withdrawing, you will need to specify the currency in which you wish to withdraw.
Pros of holding a multi-currency account at an offshore bank
Easy FX management – With more and more people indulging in and needing to manage their global mobility, transacting in multiple currencies and managing foreign exchange become highly important. Here, we will look at how an offshore multi-currency account can help make things easier:
You can deposit or receive foreign currency directly into your multi-currency account. You can easily move money between currencies. Make savings on exchange conversion fees when transacting in, including sending money overseas, any of the currencies enabled on the account. You can use a multi-currency account to protect yourself against unfavorable foreign exchange fluctuations. For instance, you can choose to move your holdings from one currency to another at no cost/very low cost or you can elect to pre-book a forward currency exchange with your bank. You get one online overview and one bank statement covering all transactions, movements, exchanges and currencies within your multi-currency account – which makes it very easy to monitor and manage your money.
Optimizing earnings
Many multi-currency savings accounts enable you to earn interest on your currency holdings. You could also earn interest in foreign currency terms. Interest rates may be built on a tiered structure where higher holdings enable you to earn higher rates of interest. Banks often offer different interest rates on different currencies and so it may be possible to offset a currency’s negative movement and another’s weak interest rate offering by diversifying across those currencies doing better and offering more – once again, you can do all this transparently under one account number. Get access to other multi-currency earning products like multi-currency term deposits and multi-currency call deposits.
Other Benefits
If you had been struggling with the paperwork and the time/effort needed to monitor and manage various accounts across countries moving to a multi-currency account will help you cut short on the paperwork and the time/effort required to manage your various accounts. Get access to financing options in different currencies. You can also get access to overdraft facilities and credit cards with multiple currencies enabled on them. You can also get to transact using foreign-currency denominated cheques.
Cons of holding a multi-currency account at an offshore bank
It is extremely difficult to accurately predict a currency’s movement in relation to another currency, and using a multi-currency account to take advantage of such movements may not be the smartest of moves on your part.
Not all banks offer the currencies you may wish to have in your multi-currency account – check before signing up.
You may need to keep an eye not only on a currency’s value in relation to another currency, but also the interest rate your bank is offering on that currency in order to ensure that your account balance is correctly and ideally divided between the better returning currencies.
Despite their flexibility and many benefits multi-currency accounts can be more work to manage effectively than a straightforward single currency account.
Fairly high account fees and minimum balances usually apply.
You still may not get the most preferential rates of exchange or fees if you compare with dedicated foreign exchange companies’ offerings.
Not all accounts are as flexible as others – for example, your so-called fee-free transfers and transactions may only apply if you’re moving money between accounts in different countries/currencies that are all held in your name – so do check the small print.
What are multi-currency accounts?
A multi-currency account is a savings or a current account that allows you to make deposits and withdrawals in a range of currencies. In other words, as a multi-currency account holder you can hold cash in multiple currencies within a single account. You can deposit cash in any of the currencies enabled on this account; while withdrawing, you will need to specify the currency in which you wish to withdraw.
Why do you need to diversify out of the dollar?
Holding all your investments in a single currency – whether it is the Singapore Dollar, the Canadian Dollar or the United States Dollar, or for that any other national currency – exposes you to currency risks.
As an aspiring global citizen, an international traveller, an expatriate or simply someone who wishes to preserve and grow his/her wealth while minimizing risks, you will need a strategy that helps you reduce the impact of loss in the value of your currency holdings. Even as a local businessman requiring a steady supply of imports, you will feel the pinch if your dollar’s value takes a hit, as your imports become costlier.
What are the advantages of multi-currency accounts?
Improve foreign exchange management
Receive foreign currency deposits directly into your account Make international payments or funds transfers while saving on currency exchange fees Your bank may also permit you to go overdrawn in one particular currency, provided your overall balance is in the black Take advantage of exchange rate market opportunities by appropriately converting currencies Hedge against foreign currency fluctuations by pre-booking forward exchanges
Consolidation of multiple accounts:
If you had been struggling with the paperwork and the time/effort needed to monitor and manage various accounts across countries moving to a multi-currency account will help you cut short on the paperwork and the time/effort required to manage your various accounts.
Earn interest on your savings:
Many multi-currency savings accounts enable you to earn interest on your currency holdings. You could also earn interest in foreign currency terms. Interest rates may be built on a tiered structure where higher holdings enable you to earn higher rates of interest.
Obtain access to other multi-currency products
You can have credit cards and checks linked to your main multi-currency account. Checks can usually be drawn in any currency. For credit cards, you may have to choose one particular currency balance that will be debited.
Multi-currency banking products like multi-currency savings accounts, multi-currency checking accounts, multi-currency time deposits and multi-currency call deposits enable customers to conduct banking transactions in multiple currencies. For instance, multi-currency savings accounts and multi-currency checking / current accounts enable customers to make deposits and withdrawals into these accounts in a range of currencies.
The biggest advantage of multi-currency products is that they give you the convenience to conduct transactions in various currencies without having to worry about conversion or foreign exchange fees. Here, we will try and explore another, not so well known benefit of multi-currency products – their capacity to earn you interest:
Multi-currency current accounts
Multi-currency current accounts, as their name implies, allow you to make unlimited or a high number of deposits and withdrawals into this account and consequently do not generally pay any interest on the amount on deposit. There are exceptions, like the UOB’s Global Currency Account that is available in 10 different currencies and also provides daily interest on certain currencies.
Multi-currency savings accounts
These accounts usually have deposit and maintenance balances for the various currencies enabled on them. Most multi-currency savings accounts do pay interest on the deposit balances. Products like HSBC’s Multi Currency Savings Account (up to 11 different currencies) and DBS’ DBS Multi-Currency Autosave (MCA; up to 13 different currencies) provide a tiered interest earning rate depending upon the deposit amount available in that currency; interest rates also vary according to currency.
Multi-currency term deposits
When it comes to term or fixed deposits, you will need to deposit your money for a fixed period of time during which time it earns a guaranteed rate of interest. An example of such a product is Citibank’s Multi-Currency Time Deposit through which you can deposit money in 10 different currencies for tenors ranging from one week to 12 months.
You can also make partial withdrawals, switch between currencies with no penalty fees, enjoy an overdraft facility with your deposit as collateral and also opt for the automatic rollover facility to ensure your deposits earn interest continuously.
Multi-currency call deposits
These are interest-bearing transaction accounts wherein a deposit (in the available list of currencies) is placed with the bank for an unspecified period of time. These accounts do not have cheque books or debit cards and funds can be withdrawn usually through demand drafts, remittances, standing instructions, payment orders or through withdrawals at a branch. Deposits are made through cash, cheque or incoming remittances.
The Multi-Currency Call Deposit from the National Australia Bank is one such product. A minimum deposit amount of USD 20,000 or equivalent is applicable.
A multi-currency account is a savings or current account that allows you to make deposits and withdrawals in a range of foreign currencies. Alternatively, you can make deposits in Singapore dollars and then access the funds in your account in the range of currency options provided.
Pros of multi-currency global accounts
There are a number of advantage of having a multi-currency accountespecially one associated with a global bank or offshore banking account. Let’s look at some of the main advantages:
You can deposit or receive foreign currency directly into your multi-currency account. You can also transact easily in major currencies of the world. You can move money swiftly, easily and at low cost between countries and currencies. Leave behind the hassles of having to manage different accounts in different currencies in different countries. You can also enjoy safe, secure, anytime global access to your money. Make savings on exchange conversion fees when transacting in, including sending money overseas, any of the currencies enabled on the account. You can use a multi-currency account to protect yourself against unfavorable foreign exchange fluctuations. For instance, you can choose to move your holdings from one currency to another at no cost/very low cost or you can elect to pre-book a forward currency exchange with your bank. Grow and protect your money in a stable offshore jurisdiction.
Cons of multi-currency global bank accounts
You may not get all the currency/currencies that you wish to be included in your multi-currency account. The preferential rate of exchange or discounted fees that may have been offered may not match with the best of what is being offered by dedicated foreign exchange companies’ offerings. Multi-currency accounts especially with offshore banks may have relatively higher opening and maintenance deposits associated with them. Check and take the time to understand what “fee-free” services are all about. Take international transfers for instance. Such transfers may only be free when you make transfers to someone with an account with the same bank overseas or only between accounts, in different countries, that are in your own name.
Consider the following scenarios
You are working abroad and you need to send money home to pay for mortgages, your children’s education and your family’s needs. Everytime you transfer funds to your loved ones you need to pay hefty international transfer fees. And, your family will need to pay exchange conversion fees before they are able to use the funds sent. You are on a split payroll and are getting your salary credited into two different accounts in two different countries in two currencies. As both the countries are on radically different time zones you are finding it difficult to sync both your accounts. As someone who travels overseas frequently on short-term assignments you are finding it difficult to make meaningful long-term investment plans in the country of your residence.
Answer
A multi-currency account at a global offshore bank. Such multi-currency savings or current accounts enable you to deposit and withdraw cash in a number of currencies (enabled on this account). Such accounts generally have 8 to 12 currencies enabled on them.
For instance, the Global Online Account from Digital Bank, Citibank International Personal Bank, Singapore allows you to transact in ten different currencies: USD, SGD, AUD, NZD, EUR, GBP, CAD, HKD, JPY and CHF.
A few more examples include HSBC Singapore’s Multi Currency Savings Account that allows you to transact in up to 11 different currencies, DBS Bank’s Multi-Currency Autosave (MCA) that enables you to deposit/withdraw in thirteen different currencies and Standard Chartered Bank’s Foreign Currency Current Account that is available in USD, GBP, EUR, AUD, NZD, CHF and HKD.
Advantages
Transact easily in major currencies of the world. Deposit or receive foreign currency directly into your multi-currency account. Move money swiftly, easily and at low cost between countries and currencies. Manage all your accounts easily and conveniently through a single login / viewport. Enjoy safe, secure, anytime global access to your money. Hedge your finances from exchange rate fluctuations. Grow and protect your money in a stable offshore jurisdiction. Leave behind the hassles of having to manage different accounts in different currencies in different countries. Get access to a range of multi-currency products like savings accounts, current accounts, debit and credit cards, time and call deposits.
You are a frequent international traveler. Or, you are an expatriate working and receiving a salary in a different country while meeting financial commitments in your home country. You may also be receiving dividend payouts from your international investments and having to pay bills relating to your international property(ies)/services. Dealing with different currencies is almost a way of life with you.
However, currency conversion and related costs and logistics can be quite an irritant. Multi-currency accounts can help you overcome such hassles with ease. Lets explore this a bit deeper:
What are multi-currency savings accounts?
Multi-currency savings accounts enable you to deposit and withdraw cash in a number of currencies (enabled on this account). Such accounts generally have 8 to 12 currencies enabled on them.
For instance, the Global Online Account from Digital Bank, Citibank International Personal Bank, Singapore allows you to transact in ten different currencies: USD, SGD, AUD, NZD, EUR, GBP, CAD, HKD, JPY and CHF.
DBS Bank’s Multi-Currency Autosave (MCA) allows you to deposit/withdraw in thirteen currencies: SGD, AUD, CAD, CNH, EUR, HKD, JPY, NZD, NOK, GBP, SEK, THB and USD.
What are the benefits of multi-currency savings accounts?
A multi-currency savings account helps you improve management of your foreign exchange exposure:
Receive foreign currency deposits directly into your account Make international payments or funds transfers while saving on currency exchange fees Take advantage of exchange rate market opportunities by appropriately converting currencies Hedge against foreign currency fluctuations by pre-booking forward exchanges
Consolidation of multiple accounts:
If you had been struggling with the paperwork and the time/effort needed to monitor and manage various accounts across countries moving to a multi-currency account will help you cut short on the paperwork and the time/effort required to manage your various accounts.
Earn interest on your savings:
Many multi-currency savings accounts enable you to earn interest on your currency holdings. You could also earn interest in foreign currency terms. Interest rates may be built on a tiered structure where higher holdings enable you to earn higher rates of interest.
Obtain access to other multi-currency products:
You can also easily obtain access to other multi-currency products especially those associated with your multi-currency savings account. These could include ATM, debit and credit cards and also other products like current accounts, overdraft facilities, term deposits and call deposits.
A multi-currency account is a savings or current account that allows you to make deposits and withdrawals in a range of foreign currencies. Alternatively, you can make deposits in Singapore dollars and then access the funds in your account in the range of currency options provided.
There are a number of advantage of having a multi-currency account especially one associated with a premier banking or offshore banking account. Let’s look at some of the main advantages:
Making foreign exchange management easy
You can deposit or receive foreign currency directly into your multi-currency account. You can easily move money between currencies. Make savings on exchange conversion fees when transacting in, including sending money overseas, any of the currencies enabled on the account.
Hedge against foreign exchange fluctuations
You can use a multi-currency account to protect yourself against unfavorable foreign exchange fluctuations. For instance, you can choose to move your holdings from one currency to another at no cost/very low cost or you can elect to pre-book a forward currency exchange with your bank.
Advantages vis–à–vis multiple currency accounts
You may have different accounts in different countries with each account in a different currency. Whenever, you wish to move money between these accounts you will become liable for transfer fees and exchange conversion fees. Holding and operating multiple accounts will lead to higher paperwork, logistical problems and higher banking expenses as an aggregate of expenses associated with each account. A multi-currency account would lead to lesser paperwork, lesser hassles in managing your money and cost savings due to reduction in banking expenses.
Advantages accrued through offshore / private banking
In addition, when you hold a multi-currency account with an offshore / private banking entity like Citibank International Personal Bank (IPB) Singapore, you also get to enjoy a variety of benefits through your offshore account, for example:
Manage your banking and multi-currency needs through multiple channels including ATMs, Internet banking, through checks, by using Debit and Credit cards and through phone banking and mobile banking. View and manage all your Citibank accounts worldwide through a single platform and make instant transfers to your other Citi accounts worldwide. Make foreign currency deposits and also obtain overdraft facilities against your foreign currency deposits. Get a USD-denominated check book. You can use your multi-currency offshore account to help you buy property overseas, pay for overseas property maintenance, make mortgage payments, pay bills or school fees without exchange and other related costs. You can avail of loan products in a range of currencies. You can build an international investment portfolio.
A multi-currency account enables account holders to hold cash in multiple currencies within a single account. Account holders can deposit cash in any of the currencies enabled on the account; while withdrawing, they just need to specify the currency in which they wish to withdraw. Some of the benefits of having a multi-currency account are:
Foreign exchange management made easy
* Account holders can deposit or receive foreign currency directly into their multi-currency account.
* They can save on exchange conversion fees when sending money overseas or simply sending money in any of the currencies enabled on the account.
* Multi-currency accounts also make it easier to move money between currencies.
Multi-channel transactions
Many multi-currency accounts enable holders to transact via multiple channels including ATMs, Internet banking, phone banking, through cheques, bankers’ cheques and through Debit cards at merchant outlets.
Hedge against foreign exchange fluctuations
A multi-currency account allows holders to get greater control and certainty against foreign exchange fluctuations by pre-booking a forward exchange with the bank.
Multi-currency vs multiple currency accounts
* A customer may have different accounts in different countries (multiple currency accounts). However, every time the customer wishes to move cash between countries he/she will have to face exchange conversion fees and transfer fees. Moreover, opening and holding multiple accounts will lead to a higher amount of paperwork and banking expenses associated with each account.
* A multi-currency account would mean lesser paperwork, lesser hassle in managing money and cost savings due to holding just one account.
There are different types of multi-currency accounts available in Singapore. These include:
– Multi-currency savings accounts
– Multi-currency current accounts with cheque facilities for those making frequent payments/transfers including drawing cheques in one or more currencies.
Multi-currency savings and current accounts usually provide account holders an ATM / Debit card. This, however, needs to be checked with the individual bank.
– Multi-currency term deposits that let deposit holders lock in an interest rate for a fixed period of time.
For instance, the Multi-Currency Time Deposit offered by Citibank International Personal Bank Singapore, the offshore arm of Citibank Singapore, allows account holders to open a deposit in any of ten currencies for tenors ranging from 1 week to 12 months, the freedom to switch between the ten currencies with no penalties, an overdraft facility against the deposit, an auto rollover facility that ensures that the deposit gets automatically renewed (on prevailing interest rates) on maturity and an “unfixed” feature that allows partial withdrawals.
