Do you require access to a variety of currencies? A foreign currency account is a convenient and hassle-free way to save money on foreign exchange fees and expenses. A foreign currency account, often known as a multi-currency account, allows you to keep multiple currencies at the same time and swap between them as needed. Thus, in today’s blog we will majorly focus on the benefits and other related aspects of a Foreign Currency Business Account in United Arab Emirates. Our experts have carefully devised the below mentioned information which can be used by you to get maximum benefits. So, without any further ado, let’s learn!
What do we understand by a Foreign Currency Business Account?
A foreign currency business account, often known as a multi currency account, is a typical Emirati bank account that allows you to send and receive foreign currency funds. These funds can be exchanged into Dirhams or kept in the currency in which they were received until you are ready to swap them. Accounts in foreign currencies are available in both business and personal versions, and depending on the account, interest may be earned.
You can make deposits and withdrawals at a branch or online, depending on who you have an account with. Keep in mind that some accounts only offer a limited number of currencies that can be withdrawn at a branch. Foreign currency term deposits are also available for customers having an Emirates based account who want to invest in foreign currencies.
What is a Foreign Currency Business Account and how does it work?
A foreign currency business bank account allows you to transfer and receive money in multiple currencies, saving you both time and money. Regular UAE bank accounts will automatically convert funds to and from Dirhams or AED as needed, but what if you wanted to store varying quantities of different currencies without worrying about short-term currency changes influencing your bottom line?
You can deposit several currencies when you utilize a foreign currency business account. Switch between currencies to take advantage of fluctuating exchange rates and send money overseas without incurring additional translation fees (though transfer fees may apply). If you deal with overseas transactions frequently, this is an excellent approach to manage your money.
What are the advantages of having a Foreign Currency Business Account?
One of the most significant advantages of a foreign currency account is the ability to send and receive funds in many currencies without having to exchange them. This is great for anyone who works in the import/export industry. Thus, the benefit of a foreign exchange business account are enumerated below.
Earn Interest in a Variety of Currencies
On certain currencies, many foreign currency accounts will even pay interest. These are frequently available in levels, with better rates being offered on balances with higher amounts. Many banks will offer a variety of currencies, so compare the many institutions and goods on the market to ensure that the currencies you require are available. In general, banks will only offer main currencies with a foreign currency account, so if you plan to work with exotic currencies, you may need to use a competitive international money transfer service and a standard bank account.
Exchange Rate Advantages
As previously said, one of the key advantages of this form of account is that you can retain your money in whichever currency you desire. This is especially true when it comes to currency conversion rates.
A dirham’s value now could be substantially different tomorrow, and these price changes can cost you a lot of money. In fact, depending on worldwide financial markets, the number of Emirati Dirham’s you'll get in exchange for any currency changes every day.
You can keep your money in a foreign currency account until the exchange rate makes it beneficial to transfer it back to Emirati Dirhams. This is especially useful in commercial transactions, which are often much larger than personal transactions and, as a result, tiny changes in rates can result in larger losses.
Overdrafts
Many banks will let you to keep an overdraft in specific currencies if you are unsure about the date of your foreign currency payments. This may make it easier to accommodate late or early payments. Always consider the costs and rates associated with using this type of feature.
What is the best way to compare Foreign Currency Business Accounts?
To guarantee that you get the most out of having a foreign currency business account, you should compare the following aspects among the various banks
- The total number of currencies- Some financial institutions will be able to give you with a variety of currencies, but others may only have two or three.
- Currencies that are supported- Check to see if the currencies you use the most are supported by each of the accounts you're considering.
- A minimum account balance is required- Some banks will demand you to keep a certain amount of money in your account on a monthly basis.
- Account fees are charged on a monthly basis- You could come across some that charge a monthly maintenance fee for a multi-currency account.
- Other charges- Check the fine print to check whether any cash handling fees apply to your transactions. This may or may not be the case depending on the currency and transaction type.
- Charges for currency exchange- Aside from the exchange rate discrepancies, the bank may charge you each time you convert your money to a different currency.
- Amounts are transferred- The maximum amount you can send per transaction and per day varies by bank.
- Types of transfer- You'll find that most international transfers are done through a bank to bank transfer.
- The rate of money transfer- Examine how long it takes to transfer money from your home bank to an international bank with each account.
- Flexibility- You can make transfers, deposits, and withdrawals from select multi-currency accounts over the phone, the internet, or in a branch. Check to see if any of these transactions are restricted or charge additional fees.
What are the Advantages and Disadvantages of having a Foreign Currency Business Account?
ADVANTAGES
- Multiple currencies are available- The biggest advantage of owning one is this. You can deposit foreign currency without having to worry about exchanging your money.
- It is necessary to strike a balance- Australians will not be obliged to maintain a minimum amount in a multi currency account with some banks, such as CBD.
- Rates of exchange- In some cases, you can swap currencies to take advantage of a better exchange rate.
- Fees for accounting services- You'll be able to find multi-currency accounts that don't require any monthly or recurring fees.
DISADVANTAGES
- Fees for cash handling- You might anticipate to be charged specific cash handling costs for some of your transactions.
- Interest rate is low- You will not receive interest payments on your balance with this sort of account.
Conclusion
We can conclude with the fact that Foreign Currency Business Accounts are can be your go to option if you have numerous transactions of your company in foreign currencies. Thus, we hope this blog provided you with incite full information. For more information on other related aspects, feel free to check out our website as well.
