If you frequently shop on overseas shopping websites, chances are, you’ve wished more than once that you didn’t have to incur the hefty foreign exchanges fees.
And if you travel frequently, you’ve probably tried to monitor the exchange rate at the money changer before travelling, in the hope of getting a good rate. You might even have joined the long queues at Raffles Arcade!
But think of the sheer inconvenience, safety issues, and volatile exchange rates that come with exchanging foreign currency every time you travel.
If you haven’t heard, there is a smarter way, and it’s called a multi-currency account. And here’s what you need to know about it.
What is a multi-currency account?
A multi-currency account is a savings or a current account where you can deposit or withdraw cash in multiple currencies.
Say you are booked on a whirlwind trip across several Asian countries. All you need is one bank account. When you shop till you drop in Hong Kong or Tokyo or Bangkok, just use the debit card associated to your multi-currency account, and the amount will automatically be debited from your HKD, Yen, or THB balance.
The best part? No foreign transaction fee or hidden charges. Be a local and spend like one, wherever you go.
What are the advantages of a multi-currency account?
1. One account for all transactions
Previously, having regular multi-nation transactions meant you needed to open a bank account in each country, check it regularly, and maintain a minimum balance. Thankfully, that’s history. With a multi-currency account, your grocery bills in Singapore and also that pair of shoes in New York can be paid for using the same account, with no forex conversion fees or additional admin fees.
2. Don’t worry about exchange rates
The Australian Dollar has never looked more attractive. But you have no plans to travel there so you decide not to stock up on Australian Dollars at the money changer. A few weeks later, an early bird promotion by Singapore Airlines has a flight to Melbourne going for only S$500! You grab that opportunity, but in the true spirit of Murphy’s Law, the exchange rate for AUD is now highly unfavourable. So much for saving money on the flight. That’s life. But it doesn’t have to be this way when you hold a multi-currency account.
See a good exchange rate? Lock it and use it for your future travel. What’s more, if the currency you hold goes through unforeseen fluctuation, offset it by moving your balance to another currency at no cost or low cost depending on your bank.
Money Changer Tips: You Don’t Have to Be a Math Genius to Read and Compute Rates
3. Save on conversion fees and other charges
Maybe you are not the sort to carry too much cash on you. Using your credit card is an option.
But is it a wise one?
Consider this. A simple foreign transaction will see you attract three layers of charges. First is the currency conversion fee charged by your card association (Visa/Mastercard) which is typically 1%. Then there is the bank admin fee which is usually around 1.5% to 2%.
If you choose to use the Dynamic Currency Conversion service, which means you are opting to pay in your home currency (SGD), you ‘save’ on the bank admin fee, but instead incur a much higher variable fee for using the service. Not an attractive proposition.
Enter multi-currency accounts.
Transfer funds overseas, convert SGD to other currencies, debit from your foreign exchange balance and receive foreign funds – all without extra fees. Some banks even earn you interest on certain currencies. For the DBS Multi-Currency Account, you will earn 0.030% per annum for the first US $10,000. It’s a very low interest rate, hence you shouldn’t be moving all your money from your usual savings accounts over.
Which banks offer multi-currency accounts?
With Singaporeans travelling more frequently, it’s started to make more sense for some of us to open a multi-currency account. Don’t be surprised if you keep seeing advertisements from banks urging you to open a multi-currency account. But which one should you choose? Here are some choices you can consider.
1. DBS Multi-Currency Account
With this account, you can access 12 foreign currencies and the Singapore dollar. Link your multi-currency account with the DBS Visa Debit Card to access up to 11 foreign currencies with no foreign exchange fees. So, you can shop online and travel without worrying about conversion fees. If this is your first account with DBS, you don’t need to make an initial deposit when you sign up for this one. If you hold an existing DBS Autosave Account, you don’t need to open a new one. Simply convert it into a multi-currency account in a couple of easy steps.
For an eMulti-Currency Autosave (eMCA) account holder, there is no monthly charge. For the eMulti-Currency Autosave Plus (eMCA+) account and the Multi-Currency Autosave Plus (MCA+) account, the monthly account fee is S$2 and S$4 respectively.
2. OCBC Global Savings Account
With this account, you can save in 8 currencies and earn interest up to 1% on your savings (other than savings in CAD, EUR, GBP, and HKD). If you already have an OCBC savings account or current account, your Global Savings Account will be opened within 1 business day.
There is no fall below fee that you have to pay, but if your daily balance is less than 5,000 units (for AUD, CNH, CAD, EUR, GBP, NSD, USD) or 50,000 units for HKD, you will not earn any interest on the amount.
3. BOC Multi-Currency Savings Account
BOC’s Multi-Currency Savings Account allows you to save in nine foreign currencies. The account can be operated on your own or as a joint account. This account also lets you enjoy inward and outward telegraphic transfers with China.
You can also access your account with an ATM card or via BOC’s telephone or internet banking service.
The initial deposit amount is S$1,500 and you will be charged S$3 if your monthly average balance falls below this amount.
4. HSBC Multi-Currency Savings Account
Use this account to make transactions in up to 11 different currencies:
Australian Dollar, Canadian Dollar, Euro, Japanese Yen, New Zealand Dollar, Pound Sterling, Singapore Dollar, Swiss Franc, US Dollar, Hong Kong Dollar, and Chinese renminbi.
An interesting feature of this account is the free Online GetRate, which offers you real-time foreign exchange rates whenever you make a transfer. You also have the Global Transfers option to access and operate all your HSBC accounts across 29 countries with one login.
You don’t need to pay a monthly fee but S$2 will be charged if the average daily balance falls below S$2,000 or its equivalent. There is also a S$5 fee per transaction at branches, which is waived for internet banking.
5. UOB MightyFX
With UOB MightyFX, you not only get access to 11 different currencies, but you also get to enjoy one of the most competitive exchange rates in Singapore. Like the DBS Multi-Currency Account, the UOB MightyFX lets you use your UOB Mighty app to convert currencies online and at favourable rates. The amount is immediately deposited into your account once you confirm the amount!
Unlike most other multi-currency accounts, there is no minimum amount you need to deposit to open your account. There also isn’t any minimum balance that you need to maintain. The annual fee on the Mighty FX Debit Card is S$18 and is waived for the first three years.
6. RHB TravelFX Multi-Currency Card
RHB’s TravelFX is a unique ‘multi-currency account’ since all you need to do is download the TravelFX app on your phone, apply for a multi-currency card via the app, and you are good to go!
You can exchange 11 currencies using the application. These currencies include:
- US dollar, Australian dollar, New Zealand dollar, Euro, Sterling Pound, Canadian dollar, Singapore dollar, Japanese Yen, Thai Baht, Hong Kong dollar, and Swiss Franc.
One of the highlights of TravelFX is that you don’t have to maintain an account with the bank. There are no annual fees, top-up fees, or currency conversion fees that you need to pay.
The other benefits include:
- The ability to make purchases in local currency while abroad.
- Make online purchases with the currency of your choice.
- Use the card wallet for foreign currency conversions.
- Withdraw local currency from any Visa or Plus ATMs overseas for free when you have sufficient funds in your card wallet!
As mentioned earlier, there is no annual fee, top-up fee or currency conversion fee. Even ATM withdrawals are not charged if you have a sufficient amount in your card wallet and the currency is one of the 11 supported currencies.
The following fees and charges apply to your transactions:
- If you decide to use a cashier’s order, you will be charged S$20 per order.
- 1.8% of the transaction if the funds in your card wallet are insufficient.
- 2.8% of the transaction amount if you are withdrawing cash that you don’t currently have.
Keep in mind that ATM operator fees may apply to your transactions.
Note: If you are worried about card security, you can lock your card when it is not in use or if it is lost so that no unauthorised transactions can be made!
What’s the catch?
A multi-currency account may be just what you need but don’t forget to read the fine print and take these points into consideration.
- You may get a free debit card when you open your account but do remember that overseas ATM charges apply. Conversion and administrative fees of close to 3% may be applicable. You may also need to pay a flat fee of S$2 – S$5 per cash withdrawal.
- Predicting the movement of foreign exchange especially with so many external factors at play is not an easy one. Market fluctuations, a sudden rise or drop in the currency could play havoc with your balance value.
- Check out the list of currencies offered by banks and make sure to go with the one that covers all the different currencies you plan to transact in.
Are there any other multi-currency accounts you think are worth listing here? Let us know!
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