What Is a Multi-Currency Account & Do You Need One? 

For businesses engaging in cross-border transactions, a multi-currency account simplifies these transactions, leverages favourable currency exchange rates, and reduces conversion fees. And the best part? It saves you hours of managing multiple bank accounts.

This article will help you understand more about a multi-currency account, its pros and cons, and how it works. We will also provide you with some top picks in Hong Kong to ensure you choose the best option for your business.

What is a Multi-Currency Account?

A multi-currency account, also known as a foreign currency account, is a type of account that allows you to hold and manage multiple currencies in a single account. Most banks and fintech firms offer this type of account to business clients. 

Typically, it is a current account that lets you withdraw and deposit money on demand. The additional feature is that you can conveniently manage your money across currencies without the need to maintain several local accounts in different countries.

While the supported currencies differ across banks and alternative providers, most multi-currency accounts should at least support major currencies, including:

• US dollar (USD)
• Euro (EUR)
• Pound sterling (GBP)
• Japanese yen (JPY)
• Hong Kong dollar (HKD)
• Singapore dollar (SGD) 
• Canadian dollar (CAD)
• Australian dollar (AUD)
• New Zealand dollar (NZD)

For instance, a Statrys Business Account supports 11 currencies, including HKD, AUD, CAD, CHF, RMB, EUR, GBP, JPY, NZD, SGD, and USD,

A multi-currency account works similarly to a bank account. However, you can hold, send, and receive money in various currencies in one account. 

To illustrate this, imagine you are running an ecommerce business based in Hong Kong that sources products from mainland China, with customers purchasing from the US, Europe, and Australia.
With a multi-currency account, you can pay your suppliers in Chinese yuan and receive payments in US dollars, Australian dollars, and euros without the need for currency conversion.

This setup simplifies international transactions by eliminating the complexity of maintaining separate accounts for each currency and reducing currency exchange rate risks.

Anyone can benefit from a multi-currency account, as long as you transact in multiple currencies or you have plans to. 

Here are some industries that can benefit more from multi-currency accounts: 

1. International Trade: Businesses importing or exporting goods can benefit from flexible international transactions with fewer fees.
2. Ecommerce and Online Store: Global ecommerce stores that sell to international markets can handle payments in different foreign currencies.
3. Company with Branch Offices Abroad: If your company employs staff abroad or works with freelancers overseas, making payments in multiple currencies will be more convenient for your business, as you can save the differences in exchange rate fees compared to wire transfers.

Multi-currency accounts offer the convenience of managing multiple currencies in one place, but it is essential to weigh the benefits against potential drawbacks like fees and exchange rate fluctuations.

Let’s compare the pros and cons of a multi-currency account in detail. 

• Convenience: Manage multiple currencies in a single account, which can simplify transactions and record-keeping.
• Flexibility: Hold and switch between different currencies with ease in one account.
• Reduced Conversion Fees: Minimise transaction fees by limiting the need for frequent currency conversions.
• Reduced Exchange Rate Risk: Secure better exchange rates and mitigate losses from currency fluctuations.
• Simplified Transactions: Receive payments from customers and pay international suppliers in their local currencies, eliminating the need for currency conversion.

• Variable Fees and Terms: Different banks offer different pricing; some might have high monthly maintenance fees, transaction fees, and potential inactive fees.
• Minimum Balance Requirement: Some financial institutions require an initial deposit or a minimum balance, which can be between HKD 10,000 - 200,000 
• Lower Interest Rates: Multi-currency accounts may offer lower interest rates on deposited funds than traditional savings accounts. 
• Additional Charges: Depending on your account provider, you may be required to pay additional conversion fees when sending money to certain countries.

Opening a multi-currency account is a simple and straightforward process. However, there are several things you need to consider before deciding where to open a multi-currency business account, such as the following:

• Fees: Compare monthly maintenance fees, transaction fees, foreign exchange fees, and other bank fees, as they can vary depending on the provider and type of account you choose. 
• Exchange Rates: Look for a provider with competitive exchange rates and transparent pricing structures.
• Supported Currencies: Check that the account supports the currencies you actually need. Not all multi-currency accounts support all foreign currencies. 
• Transfer Options: Consider how easy it is to transfer funds between currencies and to external accounts. 
• Transaction Limits: Check if there are any limitations on how much money you can transfer in and out of your account, both in total and per transaction. This is to avoid any surprises as you scale up. 
• Account Features: Consider what the account offers, such as cash withdrawal limitations, payment tracking, account managers, and debit card availability. 

Additionally, you may consider answering some questions to determine whether your business can benefit from a multi-currency account:

• Do you frequently make transactions in foreign currencies? This could include sending or receiving international payments, shopping online from foreign stores, or paying for suppliers in a foreign currency. 
• Do you have multiple bank accounts set up in other countries? Keeping one account for all currency needs is more cost-efficient than maintaining multiple offshore bank accounts. 
• Are you planning to expand your business globally? A multi-currency account helps you receive payments without losing your profits to conversion fees.

If you answered yes to any of these questions, opening a multi-currency account could be a good option.

Similar to when applying for a bank account, opening a multi-currency account typically involves providing personal and business details, proof of identity, and an application form. 

Each bank and non-bank financial institution has a different application and Know Your Customer (KYC) process, so we recommend checking with your chosen account provider for accuracy. 

Some providers offer options to open an account online, while others require visiting a bank branch. Some providers may also need an initial deposit to activate the account. 

If you have a business in Hong Kong or are doing business in the region, there are several options for multi-currency accounts to streamline your operations.

Depending on your preference, you may opt for traditional banks like HSBC or Citibank for more comprehensive banking services and in-branch support. But if you prioritise digital convenience and a simpler account setup, you might prefer virtual banks like Airstar Bank or fintech companies like Statrys. 

To help you choose, here are our picks for the best multi-currency business accounts in Hong Kong in 2024:

Bottom line

With a multi-currency account, your business can optimize financial transactions that are fast, reliable, and efficient on a global scale.

If your business is dealing with more than one currency, a multi-currency account can streamline your operations and save more costs for your business.

While a multi-currency account offers several benefits, it's important to keep in mind that there are drawbacks. Thus, It is advised that you consider all of the options available to you to ensure you choose the one that fits best with your business.