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Payment & Salary - Mon Oct 31 2022

What is a Multi-Currency Account and How Does it Work?

Getting a multi-currency account is almost a must-have in a world where you can work from anywhere and for any company worldwide. Thanks to all the technological resources available, we can freely get in touch with each other, make international purchases, or quickly send and receive money from one country to another. If you live abroad, it's an accessible option to remove borders while dealing with multiple currencies and avoiding bank fees.

Each country has its currency, which involves conversion fees, extra charges from financial institutions serving as a middleman, and bureaucracy (most of the time). In a few words, it hits the nail on the head when it comes to your wallet. There is no reason for you to lose money through international transactions. So in this article, let's explore how it can optimize your finance routine and what the benefits of a multi-currency account are.

What is a multi-currency account?

An-online-multi-currency-account

When dealing with multiple currencies, you probably already used one of these options: debit and credit cards, currency exchange services, or banks. However, several digital solutions come to life annually to make things even easier for us. Let's take a multi-currency account as an example.

A multi-currency account is an account at a bank or digital platform to send, receive, and hold money using more than one currency. If you are an entrepreneur working in the United States while your employees live in Brazil, how to pay them? You can use this account and manage batch payments to Brazil —send them in USD to be received in BRL.

Freelancers across the globe can receive money from international companies while working remotely. A multi-currency account is not advantageous for business purposes only but also for people who need to send money to family or friends.

Instead of opening a new bank account overseas or holding several bank accounts, you can quickly manage single payments or batches using a foreign currency —all in one place. Plus, the details such as account number, beneficiary name, and SWIFT code remain the same. In short, it helps you save time and money.

What are the benefits of a multi-currency account?

Dealing with multiple currencies in one place, instead of multiple accounts, can optimize your finance routine. There is no need to keep track of different currencies and foreign exchange rates for any conversion when you manage a transaction or extra fees. So convenience is also a benefit of a multi-currency account. Let's see them all summarized for better understanding:

  • Use a single account with multiple currencies to make payments for team members worldwide —from your office, hotel, coffee shop, or home;
  • Send either a unique international remittance or a high volume;
  • Save time for your finance routine and money, by paying lower fees for each transaction and avoiding extra charges (applied by banks) to convert the funds;
  • Acquire convenience to invest more time in your business and less time managing multiple accounts in different countries.

How does a multi-currency account work?

Woman-checking-her-multi-currency-account

A multi-currency account is very similar to any bank account, although some things change. Fees, for instance, are usually lower, while the exchange rates tend to be more attractive. The first step to opening one is choosing a digital platform and filling in some personal information. The whole process when starting your account is online.

Most of your experience will be intuitive since it follows the same standard as the traditional banks —withdraw money, send and receive payments, and manage funds. So whenever you start an international transaction, you need in your hands the usual information required for transfers. It includes the beneficiary name, bank account, and the SWIFT code (or any other number, like IBAN, if necessary).

Pros and cons

pros-and-cons-of-a-multi-currency-account

Creating a multi-currency account can be convenient when you handle payments from different countries. If you run a business, you can save time since a single place to manage many transactions simplifies and optimizes your routine. Plus, you can also protect your wallet by avoiding the fluctuation of foreign exchanges.

Depending on where you open an account, you can come across additional fees. Many traditional banks offer this modality, but they charge per transaction, besides maintenance, including starting your account. These fees might not be high. However, over time they can add up and reflect on your pocket. So keep an eye on this.

It's worth taking some time in the beginning to compare the different services available. Check the charges (or the absence of them) to open a multi-currency account. Ask about the fees per transaction and how the foreign exchange rates work. Seeing how everyone is connected and how remote work is in the spotlight, digital platforms for international transfers are in high demand.

Finally, there are many resources available online for you to keep researching, learning and discovering more easy ways to send and receive money from one country to another with multiple currencies.

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WRITTEN BY
Nexton

Blog Team
Nexton empowers companies connecting them with the strongest engineering talent in LATAM.

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