The world is one small place, thanks to the globalisation of technology. While a video call to the other end of the globe may not be as daunting a task, sending funds to and fro international borders can still be a choppy ride. Things start to become a little rough when you want to send or receive money from abroad, especially if you need to convert INR into other currencies.

Continue reading as we delve deeper into this near-miracle in the realms of remittances, called multi-currency accounts.

What is a Multi-Currency Account?

Just as the name implements, a multi-currency account is a type of bank account that lets you do all your banking operations such as sending, receiving, and holding with multiple currencies via one account.

Rather than having to keep track of multiple bank accounts with different account numbers, a multi-currency account allows you to use a single account for several currencies.

Numerous financial institutions will assist you in opening a multi-currency account.

The most common currencies available to transact via such accounts include the Australian dollar, Chinese yuan, Hong Kong dollar, US dollar, British pound, Singapore dollar, Japanese yen, and other currencies.

With a multi-currency account, you can:

• Transfer funds for easy investment and trades
• Make payments in different currencies from the same account (for example, when travelling).
• Access your account from anywhere in the world.
• Save on conversion fees

How Does a Multi-Currency Account work?

A multi-currency account functions similarly to a standard bank account.

Although the services may vary depending on which organisation you open your account in, you can expect to be able to perform the following account actions:

• Withdrawing funds
• Incoming and outgoing payment transactions
• 24/7 access to all your funds
• Earn interest on your account

Please note that just like a standard account, you will incur fees on a multi-currency account.

The major difference is that the charges, in this case, will be higher than on a standard account in all cases.

Withdrawal fees, open fees, transfer fees, and other charges will be high.

The amount and frequency of these fees will vary, but if you ask the agent before opening your account, you will be able to find out.

Pros and Cons of a Multi-Currency Account

Multi-currency accounts could be very valuable tools for people who need to deal with multiple currencies across international borders.

But it may also have some drawbacks. Let's see both the benefits and drawbacks:

Benefits of a multi-currency account:

• A multi-currency account gives you access to a wider range of currencies in one account
• You can diversify your investments and reduce volatility risk by investing in different currencies.
• Access your account from anywhere in the world
• Save on conversion fees

Drawbacks of a multi-currency account:

• If you have a large amount of money invested, there may be fees associated with the transfer between accounts and currencies. This fee may outweigh the benefits that come from having this type of account.
• High fees/costs on every transaction made. While there are fees included on a standard account, the fees on a multi-currency are much higher. This might not look like much, but this can add up to a lot in the long run.
• Investing options are not generally available in a multi-currency account.
• High maintenance charges.

Currencies Offered under Multi-Currency Accounts

Many different currencies are available under a foreign currency account.

Some of the common currencies include:

1. Australian dollar (AUD)
2. Chinese Yuan (CNY)
3. Hong Kong Dollar (HKD)
4. United States Dollar (USD)
5. British Sterling Pound (GBP)
6. Singapore Dollar (SGD)
7. Japanese Yen (JPY)
8. Malaysian Ringgit (MYR)
9. European Euro (EUR)
10. Canadian Dollar (CAD), and more.

The number of currencies that you can select varies as per your requirement.

It depends upon various factors, such as your financial requirements, risk appetite, and investment horizon, among others.

With a multi-currency account, you can choose any one or more than one currency in case you want to diversify your portfolio across different countries.

The best part is, you don't have to open multiple bank accounts with different banks to get the benefits.

Eligibility Criteria for Multi-Currency Account

A multi-currency account (a.k.a., global currency account) is a type of savings bank account that allows you to deposit funds in multiple currencies.

It's not possible to open such a facility with your local bank branch. So, you'll need to approach an authorised dealer who deals with foreign exchange transactions.

Before opening a multi-foreign currency account, you should make sure that you meet certain eligibility criteria:

• The account should be in the name of a person who is a resident of India
• The person should be 21 years or above.
• A minimum balance of Rs 50,000 is required for opening such an account.

Fees associated with Multi-Currency Accounts

The fees for a multi-currency account are as follows:

• Account opening fee - Nil.
• Charge on every transaction - Rs 100 or 0.2%; whichever is higher.
• Additional maintenance charges, monthly or annually, depending on the service provider

*Some NBFCs may charge other fees for multi-currency accounts. It is always advised to read between the lines on the product description page or ask for clarity from the company regarding applicable fees.

Key Takeaway

You can get a multi-currency account with fintech apps like Jupiter Money or by opening a multi-currency account at your preferred nationalised bank.

To close this kind of account, simply contact the bank and request closure. Additionally, some banks offer different types of accounts for different purposes.

For example, some may allow individuals to open an account designed specifically for businesses; others may allow individuals to open an online banking profile where they can check their accounts from anywhere in the world using their smartphones or laptops; still others may offer both options and more.

FAQs

What are the currencies offered under a multi-currency account?

The exact currencies available will depend on the bank or financial institution offering the account. Generally speaking, most offer popular major currencies such as US dollars, euros, or pounds sterling, along with other less-common ones such as Canadian dollars or Malaysian ringgit. You'll have to check with the specific provider to see which ones they offer.

What are the eligibility criteria for a multi-currency account?

Before opening a multi-currency savings account, you should make sure that you meet certain eligibility criteria:

• The account should be in the name of a person who is a resident of India
• The person should be 21 years or above.
• A minimum balance of USD 500, GBP 250, EUR 500, or INR 50,000 is required for opening such an account.

What is a multi-currency account?

A multi-currency account allows you to hold foreign currencies along with INR on one single platform without any restrictions whatsoever! A multi-currency account offers you the option to invest in currencies of your choice and keep track of them on one single platform. This is especially useful if you have business interests across countries and want to keep track of how each currency performs against others.

How do I open a multi-currency account?

It's relatively easy to open a multi-currency account. You'll need to provide personal information such as name, address, and contact details; proof of identity; proof of residence; and proof of income, if necessary. Once approved by the bank, you can then transfer funds from your existing accounts into the new ones in any of the supported currencies.