Today, when foreign travel is becoming more and more common, and remote work opens up the global market for us, a foreign currency account is no longer a luxury and is becoming a practical financial tool. It avoids high currency conversion costs and makes it easier to manage finances in different currencies. However, choosing the right foreign currency account can be quite a challenge. What to look for to choose the best offer?
Why do you need a foreign currency account? Determine your needs
Before you start comparing bank offers, think about what exactly a foreign currency account will be used for. A person who regularly travels and pays by card abroad will have different needs than a person who receives remuneration in a foreign currency.
The most common uses of foreign currency accounts:
- International travel: Card payments and ATM withdrawals in the local currency with no additional currency conversion fees.
- Work abroad or remotely for a foreign employer: Receiving remuneration in a foreign currency.
- Online shopping in foreign stores: Avoid currency conversion costs when paying online.
- Savings in foreign currency: Diversification of savings and protection against currency fluctuations.
- Investments: Transfers in foreign currency to investment platforms.
- Repayment of the loan in a foreign currency: Avoiding the costs of converting loan installments.
Costs, costs, costs – what to pay attention to?
Bank fees are one of the most important factors to consider when choosing a foreign currency account. Pay attention to:
- Account fees: Does the bank charge a monthly fee for maintaining a foreign currency account? Some banks offer free foreign currency accounts, others charge a fee that can be avoided by meeting certain conditions (e.g. minimal impact on the account, regular transactions).
- Transfer fees: How much does an incoming and outgoing transfer in a foreign currency cost? Does the bank offer free transfers within one currency or to specific countries?
- Card fees: Is there a card issued for a foreign currency account? If so, how much does it cost to issue and operate it? Does the bank offer free card payments abroad?
- ATM withdrawal fees: How much does it cost to withdraw cash from an ATM abroad? Does the bank offer free withdrawals from its own or partner ATMs?
- Currency spread: This is the difference between the buy and sell rates of a currency. The lower the spread, the better it is for you.
Functionalities of a foreign currency account – what do you need?
In addition to the costs, it is also worth paying attention to the functionalities offered by the foreign currency account. Think about which of them are important to you:
- Access to online and mobile banking: This allows you to manage your account from anywhere, anytime.
- Possibility to set up a debit card for the account: It allows for convenient payments and cash withdrawals abroad.
- Online currency exchange: It allows you to exchange currencies at a favorable rate.
- Heading Alerts: They inform you when the currency reaches a certain rate, which makes it easier to make decisions about currency exchange.
- Deposits in foreign currency: They allow you to interest your savings in a foreign currency.
Select your account currency
In which currency do you want to open an account? The most popular currencies are the euro (EUR), the US dollar (USD), and the British pound (GBP). The choice of currency should be dictated by your individual needs. If you travel to the euro area frequently, a euro account is a good option. If you work for a U.S. company, a dollar account will be more practical.
Compare bank offers
Before you make a decision, compare the offers of foreign currency accounts in different banks. Pay attention to all the factors mentioned above: costs, functionalities, and account currency. You can use rankings of foreign currency accounts available on the Internet or financial comparison websites.
Remember that there is no one perfect foreign currency account for everyone. The best account is the one that best suits your individual needs and preferences.
Summary
Choosing a foreign currency account is an important financial decision. Carefully analyze your needs, compare bank offers and choose the account that will be the most beneficial for you.
