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If you own a business that operates in multiple countries, travel a lot, or send money to family overseas, you’ve probably thought about streamlining your financial transactions by opening a multi-currency account. But you may be surprised to learn just how easy it is to do this, and how much time and money it can save you over the long term.
To help you understand the options available to Canadians who deal in multiple currencies, here we have broken down the what, where, how and why of multi-currency cards and accounts. For starters, take a look at the table below, which highlights some of the best multi-currency accounts from some of the most reputable providers in the country. You can compare and contrast options here, and if you find an account you like the look of, you can easily apply by clicking the “Apply” button.
Alternatively, pre-apply here to connect with our Smarter Loans experts, and get help finding the right product for you. And read on to find out everything you need to know about how multiple currency accounts work.
Multi-currency accounts are accounts that can hold multiple currencies - in contrast to standard accounts, which only allow one currency. In Canada, the vast majority of accounts and cards are Canadian dollar based, but multi-currency accounts allow their users to send, receive and withdraw money in two or more currencies, both more quickly and more cheaply than with a bank's exchange services.
This is extremely useful for those who frequently perform international transactions or deal in foreign currencies, whether in their personal or business life.
Common reasons for needing a multi-currency account include:
One of the benefits of a multi-currency account is that it works just like a regular account, allowing you to make deposits, withdraw funds, perform transfers, and so on. The only difference is that the funds in the account and related to your transactions can be held in different currencies.
For example, if you have an account that allows both CAD and USD funds, if you receive payments in USD, you can choose to leave them as USD, or convert them to CAD. You may hold both currencies at the same time, and pick and choose when to convert funds from one currency to the other - meaning you may take advantage of favourable exchange rates at your leisure.
Many multi-currency accounts allow more than two currencies; the currencies available to you will depend on what is supported by your chosen provider, but should include any commonly traded currencies, including:
Some accounts offer a debit card to allow the account holder to treat the account just like a regular bank account. Some providers even have local account details (such as IBANs) so that funds can be treated as if they're held in a local bank in a foreign country.
All of this means that transactions can happen much more quickly than if you were transferring funds between foreign entities or currencies via international transfers. In fact, speed is one of the primary reasons people use these accounts. Accessible online and via mobile devices, people can access their money and send it abroad or convert it to another currency much faster than via any other method.
Another of the major advantages of a multi-currency account is cost savings; typically those who want to convert currencies have to pay foreign exchange fees, and must accept whatever exchange rate their bank is offering. The rates offered by banks are often not very competitive, and include a healthy margin for the bank's profit (as well as fees). The same is true when performing a one time international transfer - you are at the mercy of your financial institution's fees and exchange rates.
But multi-currency accounts offer cheaper currency conversions via lower, more transparent fees and better exchange rates. Depending on the size and frequency of foreign transactions, these savings can quickly add up, allowing both businesses and individuals to manage money in multiple currencies without spending a fortune on foreign transaction fees.
It's important to note that different providers have different fee structures and offer different exchange rates, so finding one that is competitive for your specific currency and your expected number of transactions is key. Not every solution will be right for every customer. Possible fees you may encounter include:
There are multi-currency account options for people and businesses in a wide range of situations.
For those seeking a multi-currency account for personal use (for example, expats who have expenses in more than one country, those sending money to family abroad, or those making international payments often), the only criteria for opening an account is being over the age of 18 and being able to complete their chosen provider's application form. Most providers require documentation to verify identity and address, but not much beyond this.
Some - but by no means all - multi-currency accounts for individuals have minimum balance requirements; this is especially true of accounts offered via private banking services for high net worth individuals. If you're seeking this kind of account, you won't be able to find it at your local brick-and-mortar bank; instead you'll need to be a customer (or become a customer) with a private banking service that is likely to require detailed financial statements that prove you meet their stringent eligibility requirements.
Businesses that operate, trade or frequently travel to other countries can also get multi-currency accounts, and have more choice of providers. Most high street banks do not offer bank accounts that cater to different currencies to individuals, instead reserving them for business customers. This means that business owners can shop around the banks and the many online financial institutions that offer accounts to find the best deal.
For businesses, although many online platforms have the built-in ability to accept and make payments in numerous currencies, the conversion rate offered is usually not competitive, and it can be overall more cost-effective to use a multi-currency vehicle to accept and make payments rather than relying on an all-in-one platform (e.g. Amazon) to do so for you.
Choosing the best multi-currency account for you is a matter of need. Answer the following questions before you start shopping around:
Once you have answered these questions and understood how you will use the account, you can determine which is the right one for you.
The process of applying will depend on the account details and provider you choose. Many application processes can be completed online, but how much data you need to provide varies widely.
Basic accounts for individuals need relatively little documentation and can be opened very quickly, with just the following:
Business accounts and accounts with private banking services need more supporting information (such as proof of funds for a minimum balance) and take longer to complete.
Pros
Cons
Not every situation warrants a multi-currency account. If you don't deal in different currencies routinely, don't make frequent international payments or receive payments in another currency, perform international transfers, or manage multiple currencies for any other reason, then a multi-currency account is unnecessary.
Traditional banks and other financial institutions will be able to help you out with sporadic currency-related needs, via tools such as:
A multi-currency account is only appropriate if a person or business needs to frequently transact in multiple different currencies and wishes to do so via one account. If for book-keeping reasons it's not necessary to perform all your transactions via one account, then using multiple accounts may be better for you.
If you only conduct business, travel to, or send money to one country outside of Canada, then you may be better served by a single currency solution, such as USD-only credit cards or bank accounts. The currencies these solutions are available in vary, and they are not necessarily cheaper than a multi-currency solution. But they do exist and can be helpful in certain situations - especially as some of the products available (e.g. credit cards) come with additional benefits, such as rewards programs, that may end up being worth more to you than forex savings.
If you are a Canadian resident looking to perform international transactions frequently using a range of currencies, a multicurrency account is a great idea; however, most high street financial institutions - including the big Canadian banks - do not offer these types of bank accounts to everyday consumers. You may be able to get a multicurrency account at your local bank if you are a business, but your best bet is a specialist online provider.
Online multicurrency accounts provide the ability to convert currency, complete money transfers, send money overseas, and so on, all from an account online, and crucially via just one account rather than multiple. Some even offer a debit card. All of this means online providers can offer more functionality than a traditional financial institution, and those dealing in a variety of currencies do not have to bear the burden of managing multiple accounts. The bottom line: multicurrency accounts are much more convenient.
The best multicurrency account for you depends on your needs. For example, how often will you use the account? Which currencies do you need access to? How much are you prepared to pay in transaction fees, and are you willing to pay monthly fees for the account? Will you be able to meet the high minimum balances that some multicurrency accounts require? Will your needs be hampered by a transaction limit?
Answering these questions will help you determine which of the available multicurrency accounts can meet your needs; you can then compare costs and find the best one for you.
Multicurrency accounts are often cheaper to use over the long term than paying for each foreign transaction separately via your bank; this is one of their big benefits.
The exact cost will vary, however, based on the account type and provider you choose, as well as how you use the account. To understand how much each option will cost you, consider how often you are likely to perform each type of transaction (withdrawals, payments, transfers, etc.), and their size, and then look at the fees each provider charges. Also take a look at the margin they use for forex transactions.
Many providers only charge fees on a per transaction basis, but some have monthly fees, overdraft fees, conversion fees, and so on. Do your research to find the most competitive solution for you.
A multicurrency account is an account that can hold more than one currency; in contrast to this, accounts that hold a single foreign currency are only useful to those who want one vehicle for conducting business in one other country.
For example, businesses in Canada have access to USD-based accounts and credit cards. These accounts and cards are useful for those who do cross border business, do not encounter other currencies, and wish to separate their American transactions from their Canadian transactions.
Some banks in Canada, and many online providers, offer businesses and individuals the ability to open accounts that deal in currencies other than CAD. But it's important to note that a single currency account, for any currency, will only allow you to perform transactions in that one currency.
To hold a US bank account, a business must be registered in the US - it cannot open one with a US bank as a foreign entity. This is one reason many Canadian businesses who make cross border payments choose multicurrency accounts; it allows the flexibility to deal in American and Canadian dollars, perform international transfers with ease, and if necessary, provides local account details for US transactions.
A multicurrency account will allow you to get paid - and make payments - in a range of currencies. And holding a balance in a range of currencies can be helpful if you deal with international suppliers, or if any of your team are based abroad.
Some multicurrency accounts come with debit Visa cards; these cards allow the user to treat the account just like any other, paying for items and withdrawing ATM funds, while seamlessly switching between currencies. For those who travel often, or who purchase items online from other countries frequently, this can be really helpful.
