What it is and how it works

A multicurrency account functions like a checking account, but one that can speak multiple (financial) languages. It helps you to conduct transactions in a range of currencies, all in one place and usually with discounted fees, making it ideal if you travel internationally or receive payment in foreign currency. 

What is a multicurrency account?

A multicurrency account, sometimes called a foreign currency account, is a type of demand deposit account (DDA) — meaning you can make withdrawals and deposits at any time.

The amount and types of foreign currencies supported vary from bank to bank, but commonly supported currencies include:

• Australian dollar (AUD).
• Canadian dollar (CAD).
• Euro (EUR).
• Hong Kong dollar (HKD).
• Japanese yen (JPY).
• New Zealand Dollar (NZD).
• Pound sterling (GBP).
• Russian Rubles (RUB).
• Singapore dollar (SGD).
• United Arab Emirates Dirham (AED).
• U.S. dollar (USD).

Such an account can prevent you from needing to open multiple bank accounts in unfamiliar nations and potentially deal with foreign regulations, high transfer fees, delays and unfavorable exchange rates. Also, by having one U.S.-based account you could avoid a more complicated tax situation. 

How it works

A multicurrency account can serve as your financial home base, allowing you to deposit funds, receive payments, send payments and make withdrawals with multiple currencies. When making transfers, you can choose a currency and an amount. Some financial institutions even offer a debit card to allow for seamless spending.

You can see in your account how much of each currency you have and choose when a currency is converted, potentially holding funds until there’s a more favorable exchange rate. 

Pros and cons of multicurrency accounts

Pros

• Convenience. You can use multiple types of foreign currency with a single bank account designed for that purpose. 
• Cost-effective conversions. Unfavorable exchange rates can be costly. The ability to hold multiple currencies in a single account means you can wait for advantageous exchange rates. 
• Deposit insurance. If you open a U.S.-based account, your funds could be protected by federal deposit insurance. Confirm the financial institution is insured with the Federal Deposit Insurance Corp. or the National Credit Union Administration before opening an account. 
• One set of fees. With just one account to manage, you’ll likely face fewer fees than you would if you were juggling multiple foreign bank accounts. 

Cons

• Limited interest-bearing options. You may not find a multicurrency account that pays an attractive yield. Consider pairing one with a high-yield savings account. 
• Limited account options. Not every bank or credit union offers multicurrency accounts. Unlike the thousands of traditional checking accounts available, you’ll likely have to choose from a small range of options. 
• Service fees. Many multicurrency accounts come with service fees, which can eat into your account balance. Make sure to read the fine print before choosing one. 
• Minimum balance requirements. Some accounts require a high minimum balance earn perks, such as a yield on select currencies.

When to consider a multicurrency account

Businesses that conduct business abroad, or have international employees, as well as individuals who often transact in foreign currencies could benefit from having this type of account.

“It makes sense to open a multicurrency account when dealing with frequent international transactions or for frequent travel,” said Ross Loehr, a certified financial planner based in Atlantic Beach, Fla. 

Besides the convenience of having all your currencies in one wallet, a big benefit of a multicurrency account is the ability to hold or convert your cash on demand, when exchange rates are in your favor.

If you don’t often deal with multiple currencies, however, a high-yield checking account or one with the best debit card perks may be more rewarding.

What banks offer multicurrency accounts?

Not every financial institution offers a multicurrency account and some that do, such as PNC, only offer these accounts to businesses. Here are some financial institutions that offer multicurrency accounts to individuals:

• Citi.
• EverBank.
• HSBC.
• East West Bank.
• Wise.
• Payoneer.

As you explore your foreign currency account options, it’s useful to take a look at the fine print. Like you would with other types of bank accounts, look at the fees and services offered. Also, make sure to check that the account you plan to open supports the currencies you want to use. 

Other options for your money while traveling abroad

A multicurrency account is a useful tool for individuals and businesses who regularly deal with foreign currency. But if you handle foreign currencies only occasionally, other options, like cards without foreign transaction fees, may be better.

Credit and debit cards with no foreign transaction fees

Many travel credit cards and some debit cards offer the perk of no foreign transaction fees. You can swipe these cards to withdraw cash and complete point-of-sale transactions abroad without paying a penalty. 

International wire transfers

If you want to get a bunch of cash in hand and not use an ATM, a wire transfer could do the trick. Most bank accounts allow you to make international wire transfers. 

It can be a quick and easy way to transfer a large amount of money to another country, though you’ll likely face a fee that ranges from $25 to $50 per transaction. Keep in mind that well-known companies specializing in wire transfers, such as MoneyGram and Western Union, may not offer the most competitive pricing.  

Frequently asked questions (FAQs)