Multi-currency account: What it is and how it simplifies global banking
To make managing life or business overseas easier, you can spend and hold multiple currencies with a multi-currency account. You may require a more international account for specific banking requirements if you reside outside of Pakistan or have close ties to someone who does. A multi-currency account can help with that. How foreign currency account works and how to determine if one is right for you are explained here.
A multi-currency account: What is it?
Generally speaking, a multi-currency account is one that allows you to spend, receive, and store various currencies with a bank or financial technology company. With several subaccounts, each in a different currency, it can function similarly to an international checking account. Rather than creating a new bank account abroad, this enables you to handle payments in a foreign currency.
Multicurrency accounts are a more reliable option for foreign payments and transfers, even though credit cards can be used for purchases made overseas.
With international or private banking services offered by banks like JS Bank, the majority of mult-icurrency accounts, also known as foreign currency accounts, are only available to high net worth individuals and organizations. Wise and Revolut, two fintech firms that provide multi-currency accounts for both individuals and corporations, are two noteworthy outliers.
When to select a multi-currency account
1. You don’t reside or work in Pakistan
Avoiding currency conversions each time you make a transaction can be simple with a multi-currency account. This eliminates the cost unpredictability brought on by ongoing exchange rate swings. Multicurrency tends to be more advantageous for expatriates, particularly when it comes to real estate or companies overseas, compared to vacationers.
2. You deal with folks overseas on a regular basis
A multi-currency account may be more practical than wire transfer services if you work with non-Pakistani business clients or have friends or family who live abroad. Delivery times for bank transfers are slower than those for domestic transfers, and there may be significant fees and exchange rate markups.
When not to select an account with multiple currencies
1. You handle currency exchange for sporadic international travel
It’s safe to assume that you don’t require a bank account if you don’t need to transfer or receive money in a foreign currency. Other travel-friendly payment methods are listed below to help you save transaction fees.
2. You send money abroad only once
You can move money overseas with non-bank transfer businesses without having to find a new location for your funds. A multi-currency account can serve as a bridge between U.S. and foreign bank accounts or as a replacement for a bank account in another nation. Either way, this kind of configuration is not appropriate for infrequent transactions.
Fintechs’ multi-currency accounts’ advantages
Multicurrency accounts for individuals and businesses offer distinct benefits and use cases. For their individual accounts, some provide the following:
- Currency rates that are competitive. The firms’ rates are often based on foreign exchange markets with minimal to no rate markups when moving money, converting between currency balances, or making purchases. Although there are additional costs, a conversion’s overall cost is typically far less expensive than what is charged by conventional banks.
- Bank account information for several different currencies: You can receive payments in many currencies by obtaining country-specific bank details
- Debit card and mobile app included: Wise for example provides their debit cards, which are part of the Visa or Mastercard networks, through partnerships with banks.
Other solutions that are convenient for travel
Although using money overseas can be expensive, there are other ways to keep costs down besides using a mult-icurrency account. Here are four things to think about:
- Foreign transaction fee-free credit cards: For regular purchases when using mobile wallets or actual cards is possible. For cash withdrawals, particularly in nations where cash is widely utilized, debit cards with no foreign ATM fees are ideal. In general, there are no international transaction fees associated with these debit cards or the checking accounts they are linked to.
- Your bank’s currency exchange services: For money you’ll carry on your next journey. It’s less expensive than utilizing the airport kiosks, so check to see whether your bank or credit union offers this option.
- Nonbank money transfers for sending wire transfers abroad while in Pakistan: Businesses like JS Bank and Wise provide stand-alone international transfers with low or no fees and reasonable rates.
Final Thoughts
In conclusion, your wallet can suffer the moment you utilize a Pakistani bank account or debit card overseas. ATM and foreign transaction fees could be incurred. Additionally, if your bank is unaware that you are abroad, it may refuse debit card purchases. Thus, as we have discovered, you should have a foreign currency account, if you don’t want those additional charges and smooth transactions abroad.
