Are you looking for seamless ways to process your cross-border payments between you and your clients? A foreign currency business account can be the best solution for your business payment needs.
The foreign currency account allows holders to transact multiple foreign currencies without border limitations. And your business can enjoy low fees for sending, receiving, and converting the funds to your preferred currencies.
However, opening a business account follows strict checks to ensure your business can maintain the bill because it comes at a cost. In addition, you must research to identify which banks in your area have such accounts and what regulations and fees to expect once the account is active.
Aside from that, a business account requires an evaluation of your business needs to determine if it’s a worthy addition. So, consult your banker to get insights into owning such accounts.
Below are seven things to know about opening a foreign currency business account:
- Eligibility
Unlike traditional business accounts, foreign currency account requirements depend on the bank platform. Banks follow banking regulations for opening accounts and may subject you to eligibility checks to evaluate your ability to support the bill.
It’s perfectly normal for a bank portal to ask the following:
- Do you already have an existing account in the bank
- Your business income turnover. It has a range defined by the bank of your choice
- Be a director, sole proprietor, or partner in the business, and 18 years old and above
- Defining the purpose of the foreign currency business account
Those are some of the checks your business must meet to prompt the bank to open an account.
- Costs For Maintaining The Account
Banks charge a maximum of 6% on international transactions and may significantly impact on your income. Your business will incur charges for sending, receiving, and exchanging the funds. Such actions can substantially impact your revenue, which is frustrating for your business.
A foreign currency business account can consolidate the transaction fees to offer low charges. Your business will avoid paying extra for converting the funds sent or received from your international clients. Some foreign currency account platforms like Wise charge as little as 0.75% on international transactions, saving businesses more than 5% on income.
- Exchange Rates Matter
The forex market primarily dictates the exchange rate for most currencies traded worldwide. The effects of forex trickle down to foreign currency accounts, and price fluctuations can significantly impact the value of your business account.
In addition, banks offer inflated exchange rates that can affect your business when trying to process payments. You must constantly look out for lower rates to stay afloat in your industry.
A foreign currency business account will insulate you from currency price fluctuations and manipulations by banks. Also, your business will save time and money by simply processing payments faster.
- Available Currencies
Typically, there are significant currencies such as the Dollar; those other currencies convert by default depending on your business agreement. However, opening a foreign currency account exposes you to 12 more foreign currencies, such as Singapore Dollar, that can benefit your business.
You can simply ask your clients to pay in their preferred currency to your account, and you’ll be able to withdraw from your end. The foreign currency account offers a quick turnaround for international payments.
- Who Can Open The Account
If your business involves international payments, opening a foreign business account might be the best option. The account is an ideal plan for imports and exports business, freelancers, e-commerce business, and paying your staff working abroad. It offers a multi-currency option to simplify your payments while saving some money for other crucial investments.
- Purely Online Application
The foreign currency business account application is online and might take a few minutes to open. But you must meet the criteria mentioned by the banks you choose to use.
However, a bank can ask for a physical visit to their branches or affiliates for identity verification on rare occasions. So, ensure you provide the correct information to support your account opening application.
- Account Features And Benefits
Countries and banks have governing regulations to follow and may influence the opening of a foreign currency business account. In addition, the account features have to align with in-country rules for offering such services.
Ideally, if your business has other types of accounts in the bank, opening a foreign currency account might get additional features like online banking and viewing your transactions.
Final Thoughts
A foreign currency business account can be a strategic component to add to your business operations. It eliminates the cumbersome cross-border payments that can make your business grind to a halt. However, opening such accounts requires research and evaluation of your business needs to determine the best options to process your payments. In addition, it’s crucial to familiarize your company with foreign currency exchange rates to avoid confusion in your transactions.
