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Guide to Essential Money Tools
Banking Tools
Accounts for global cash
A step-by-step approach for expatriates looking to set up a multi-currency account.
A multi-currency account is simply an umbrella bank account, under which various sub-accounts can be maintained in different currencies according to an expat’s personal needs.
Most overseas employees are away for a predetermined period, intending to return home, and as a consequence many retain a financial commitment in their base currency (sterling), for example a life policy, mortgage payments, or school fees.
In simple terms, a multi-currency account gives an expatriate the ability to receive his or her overseas income in a foreign currency, say US dollars, and, where required, also gives the means to make payments out of the account in sterling.
When receiving income in a foreign currency, the most important aspect is the management of any foreign exchange exposure, perceived or actual. The best way to monitor ongoing exposure is to be aware of exchange fluctuations. The internet is a good source of ‘live’ information on market trends relative to various currencies. Most large institutions and brokers have foreign exchange sites which carry useful commentary and information on exchange rate movements.
If you have regular commitments to settle in your base currency, it makes sense to set these up in the form of a standing order. Most offshore banks allow for a set number of free standing orders, usually up to five. Again, by comparing the facilities offered by various banks you will be able to see which provider best suits your needs.