What Is a Multi-Currency Account? Benefits & How to Get One

In the era of global connectivity, international transactions have become very popular among businesses across the world. According to Flow, over 60% of online shoppers prefer to buy products directly from another country.

With these emerging trends, banks and financial tech firms revolutionize their services by offering what is called a 'multi-currency account'.

For businesses engaging in cross-border transactions, a multi-currency account is considered a "game-changer" for managing multiple currencies, or leveraging currency exchange rates, and the best part? Saving you hours of managing multiple bank accounts.

In this post, we'll delve into what a multi-currency account is, how it works, the pros and cons you should be aware of, and finally which multi-currency account is the right fit for your business.

This guide will help you understand all the above aspects to ensure you make an informed decision before opening one.

What is a Multi-Currency Account?

A multi-currency account is a type of account that offers individuals and businesses to effectively manage multiple currencies in a single account, which includes key details such as beneficiary name, account number, and SWIFT code.

Think of it as having one single account with subaccounts in different currencies, so you don’t need to open multiple bank accounts in other countries.

Most traditional banks and financial tech firms offer multi-currency accounts.

For instance, a Statrys Business Account offers 11 currencies including USD, GBP, EUR, HKD, SGD, JPY, AUD, CNY, CHF, NZA, and CAD.

Check out our explainer video below to see how easy it is to use a multi-currency account 👇

How Does a Multi-Currency Account Work?

A multi-currency account has a versatile feature. It works similarly to a bank account, however, you are able to manage various different currencies.

The way this is managed is through three core features - receiving different currencies, holding the currencies, and making payments in different currencies.

With its efficiency, all these features take place in a single account.

To illustrate this, think of an ecommerce business selling its products online. The business can receive payment online from the US and the currency would be in US Dollars. Receiving the payment as a store owner with a multi-currency account based in Hong Kong, the bank account can hold the currency, without the need to convert to Hong Kong Dollars.

As the store owner needs to purchase more products in US Dollars, a payment is then made through the multi-currency account. This will aid the store owner in avoiding exchange rate fluctuations and help to reduce additional charges or fees in the process.

Does your business often deal with payments in multiple currencies? See how you can avoid currency exchange rate risk.

Pros and Cons of a Multi-Currency Account

Some benefits are obvious and easy to grasp. Others require an understanding of how foreign exchange (FX) markets work.

Benefits:

• Manage multiple currencies in a single account, which makes it easier to track your foreign transactions.
• Some providers of multi-currency accounts may offer debit cards. For example, Statrys offers Virtual Prepaid MasterCard.
• Multiple local account details, including bank account number, branch code, or bank code for banks in Hong Kong or others.
• Lower transaction costs that can be avoided, such as maintenance fees, exchange rate fees, and other excess fees.
• Easier for reconciliation and account adjustments, when you need to match invoiced and amounts in different currencies.
• Save money on foreign exchange fees with competitive exchange rates

Disadvantages:

• Some multi-currency account providers can require up to $200,000 as a minimum balance.
• Maintenance fees can be high given it is not a traditional account, and can have annual charges.
• The interest rates may not be as high as standard savings or checking accounts.
• You may be required to pay additional conversion fees for different countries you send money to (depending on the provider of your account)

Which Businesses Can Benefit from Opening a Multi-Currency Account?

You can choose a multi-currency account to help you save time, costs, and effort when sending and receiving payments in several foreign currencies.

Choosing a multi-currency account can be great for your business, but let's look at some of the features which your business will need with a multi-currency account.

If your business deals with more than one currency, a multi-currency account can be useful for the following types of businesses:

1. Trading company - If your business trades internationally; whether it is exporting, importing, or both, using a multi-currency account can make your transactions more flexible while paying fewer fees.
2. E-commerce / Online Store - If you operate an e-commerce store that sells goods or services in multiple currencies, a multi-currency account will help you save more on your transfers when you need to make online purchases for your business.
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.

💡 Tip: Opening a multi-currency business account can be invaluable if you're a small business owner who travels and works in different countries.

How to Open a Multi-Currency Account?

Opening a multi-currency account requires a similar set of information and documents just as when you would open a bank account.

The following items may be required to open a multi-currency account:

• Personal information, including your full name, date of birth, address, contact information, and Social Security number.
• Documents as proof of identity, including government-issued ID (passport, company certificate, work permit, or driver's license)
• Initial deposit in the form of cash or a debit card, along with your bank account details.

This is initial information that is often provided to the bank or your multi-currency account provider, thus more information can be requested.

Some providers may offer you options to open a bank account online, and for some countries, an initial deposit is not required.

Things to Consider Before Opening a Multi-Currency Account

If you're deciding whether a multi-currency account is right for your business, before you make a decision to open one, you may consider these points:

• Are you someone who lives or works outside of a particular country, such as the U.S.? It would be an ideal choice to open a multi-currency account to ensure wherever you go, you can always have access to funds and use them effectively.
• Do you have multiple bank accounts set up in other countries, but want to only maintain one account for all your business needs? For instance, having an offshore bank account in Germany, while your main business operates from Hong Kong.
• Are you planning to expand your business by selling products or services online in multiple different currencies?

📑Pro Tip:
Not sure which business account to choose? Find out with our Business Account Reviews quiz and save hours of research!

List of the Best Multi-Currency Accounts to Consider in Hong Kong:

If you have a business in Hong Kong, there are several multi-currency accounts and other flexible options to help you level up your game in finance.

Below is a curated list of top-notch business account options you can consider:

HSBC

One of the most popular banks in Hong Kong, HSBC offers a seamless multi-currency account, with two options - personal and business - with competitive exchange rates.

Find out more on how you can open an HSBC Business Account.

CitiBank HK

CitiBank focuses on a global scale by integrating versatile financial solutions. The multi-currency accounts offered by CitiBank are designed to empower cross-border transactions for both individuals and businesses.

See what you need to open a CitiBank HK Business Account.

Statrys

Statrys is a fintech company offering a multi-currency account of up to 11 currencies with a single account number, along with other agile financial management tools tailored for SMEs and startups, including international and local payment options, prepaid payment cards, or linking your business account to digital marketplaces, or to payment processors like PayPal or Stripe.

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.