Multi currency business bank accounts: A complete guide for UK small business owners
UK business owner working overseas in multiple currencies? You need to know about multi currency accounts; helping you save on fees
If you do business in different currencies, then you should consider opening a multi currency account to avoid paying excess foreign exchange fees and to help you manage your different currencies all in one place.
With uncertainty in the economic climate around issues such as Brexit and Trump, demand for multi currency accounts – particularly those offering Dollars and Euros – have jumped as businesses look to protect themselves from exchange rate fluctuations.
To help you get to grips, we’ve created a comprehensive guide covering everything you need to know.
Here you’ll find information on how a multi currency business bank account works, the advantages and disadvantages, and how to open a multi currency account.
We’ll also help you compare the best multi currency accounts available and viable alternatives.
What is a multi currency business bank account?
A multi currency business bank account allows you to hold multiple currencies within the same account.
For example you can hold Dollars, Euros and Pounds all within a single account and deposit and withdraw money in each of these currencies. It can help make managing multiple currencies much easier as you only have the one account to deal with and can pull off reports for each of your held currencies.
They can also be cheaper to manage than having multiple currency accounts in different countries, where you may be required to pay monthly fees to keep your account open or need to have minimum deposits in each of your currency accounts abroad.
You also won’t need to remember different account details and logins.
As a UK company, you can open a multi currency business account. Most banks and providers typically require that you have an active bank account in Sterling, are a UK resident, and are 18 or over.
Who are multi currency accounts suitable for?
Any business owner doing business across borders and having to manage multiple currencies will benefit from having a multi currency business bank account. You can get paid by your client in one currency and then pay suppliers or employees out in another.
For instance, a multi currency account is useful if:
- Your business trades internationally; be it exporting, importing or both
- You’re an online seller and you sell across several marketplaces, such as Amazon
- You operate an e-commerce store and sell goods or services in multiple currencies
- You employ staff abroad or work with freelancers overseas
- You’re an independent contractor or freelancer that works with international clients regularly
How does a multi currency business bank account work?
Working like a standard checking account, it is a demand deposit account which allows you to draw out payments and receive payments when you need to.
In most cases you can access your funds via your debit card, electronic payments, wire transfer, and cheque. For some, you can also receive different rates of interest dependent on the currency you’re holding.
Similarly to a business bank account, there can be fees associated with transactions made. This could take the shape of a monthly account fee, a charge for depositing or withdrawing payments in currencies above a certain value or to a certain customer, or a charge for deposits or transfers of certain currency notes.
For example, the Barclays multi currency account charges a £6 fee for transfers into any currency account of over £100, while the HSBC multi currency account charges $6/€6 to send Dollars/Euros to a non-HSBC customer.
What are the advantages and disadvantages of having a multi currency business bank account?
Here are some of the key advantages and disadvantages:
|Enables you to easily and swiftly manage multiple currencies in one account wherever you are in the world, removing the hassle of managing different accounts in different currencies in different countries.||No benefits if your business doesn’t move money from other countries or currencies.||May help you save money on the exchange rate when transacting on any of the currencies enabled on your account if you’re sending to a recipient who uses the same banking partner.||Can incur substantial bank fees for transfers, and may come with monthly account fees.||Can help you manage exchange rate risks by holding multiple currencies until rates become more favourable.</font||The account might not offer all the foreign currencies your business requires.||A simple solution if you trade overseas, have international staff, or regularly work with international clients.||The exchange rate that may have been offered might not match up with the best rate available at any given time.||Ultimately, lets you enjoy safe, secure, anytime global access to your money.||You may need to provide an overseas address or local address to make and receive payments.|
However, there is a great alternative to a multi currency business bank account which offers additional advantages for your business and removes some of the disadvantages.
The TransferWise Borderless account comes with no set up fees or monthly charges and costs nothing for receiving payments in the local currency.
It comes with unique international account details in four currencies – USD, GBP, EUR and AUD. This means that you can have all the benefits of having local account details for these currencies without needing to have an overseas address; unlike typical banking providers where it can require a lot of time and paperwork to open up an overseas bank account and can come with hefty charges.
With the TransferWise Borderless account you can receive payments in these four currencies free of charge and can hold and manage money in more than 40 currencies. You can also use money in your Borderless account to send to over 50 countries.
Currency transfers are conducted at the real market exchange rate which makes money transfers with the Borderless account up to eight times cheaper than the banks, who typically add a mark up to the exchange rate they provide.
It’s also a fast means of making foreign currency transfers; 80% of the transfers made by TransferWise from the UK to Europe are completed within one business day, with 25% of their UK to Europe transfers being instant.
Unlike many foreign currency accounts, the TransferWise Borderless account doesn’t require minimum currency deposits or a monthly fee. The only costs you’ll face are a small, upfront fee on the total value of the transfer, with GBP route rates at 0.35% + £0.80.
FCA regulated, and with over three million customers using their service, TransferWise’s Borderless account makes it cheaper and easier for your business to operate internationally.
What is the best multi currency business bank account?
In the table below, you'll find the cost in GBP for sending and receiving money with high street banks in the UK and TransferWise Borderless:
|Compare the costs in GBP||TransferWise Borderless||Barclays Basic||NatWest Select||Lloyds Bank Classic|
|Monthly account fees||Free||Free||Free||Free|
|Send £1,000||AUD: £4.60
|Receive £1,000 equiv. in AUD, EUR, USD multi currency account||Free||AUD: £6.00
|Not possible||Not possible|
While the TransferWise Borderless account is not like a standard bank account, it offers your small business a cheaper, faster alternative and gives you all the benefits of having currency accounts in the countries where you do business.
Banks and other providers often add a mark-up to their exchange rate while advertising low fees, which means your business could be paying up to 5% in hidden charges when sending money abroad.
TransferWise displays its fee upfront and deducts it before conversion, it then uses the mid-market rate, independently provided by Reuters, without any mark-up.
How to open a multi currency business bank account
The process of opening a business multi-currency account with a bank is relatively straightforward.
Barclays requires you to apply in branch if you’re already a customer, while, for the NatWest multi currency account, you’re required to call them if you’re a new customer or contact your relationship manager if you’re an existing customer.
To open a TransferWise Borderless account, the steps to get set up can be done in the matter of a few clicks online:
- Sign up on the website and verify a few details about you and/or your business.
- Activate your account – choose which currencies you want to activate first (you can add more later).
- Add money to your different balances – you can either do this by providing your international account details to clients to pay into, or you can add money into your different currency balances via bank transfer, card payment etc.
- And that’s it: you can start saving money on international money transfers and managing your currencies right away.
Start doing business without borders
By reading this guide, you should now know what a business multi currency account is, how it works, the best accounts available – along with alternatives such as TransferWise’s Borderless account – and how to open it.
With a multi currency account or Borderless account, you can manage your finances anywhere in the world.
So, what’s stopping you? Embrace business without borders today.